Who should comply with the competency requirements?

Any member of CPA Australia seeking to conduct a review engagement must comply with the Competency Requirements for Assurance Practitioners Undertaking Review Engagements (PDF). However, the document does not introduce any new requirements for CPA Australia members. It updates the previous competency requirements to cover all review engagements, including those required for second-tier companies limited by guarantee. 

Why have the updated competency requirements been published?

Since 2010, when changes were made to the Corporations Act 2001 to introduce a review requirement for second-tier companies limited by guarantee, a number of other statutory requirements have been introduced requiring a similar review of financial statements of entities that meet certain criteria (for example, tier two charities registered with the Australian Charities and Not-for-profits Commission (ACNC)). The updated document is intended to ensure that CPA Australia members conducting review engagements under different statutory or other requirements have the appropriate competencies before undertaking such engagements. 

What is a review engagement? 

The Framework for Assurance Engagements issued by the Auditing and Assurance Standards Board (AUASB) defines a limited assurance engagement: 

"A limited assurance engagement means an assurance engagement where the assurance practitioner’s objective is a reduction in assurance engagement risk to a level that is acceptable in the circumstances of the assurance engagement, but where that risk is greater than for a reasonable assurance engagement, as the basis for a negative form of expression of the assurance practitioner’s conclusion. A limited assurance engagement is commonly referred to as a review."

Regardless of the terminology used by applicable regulations, legislation or the client’s request for a review, the member should assess whether the characteristics of the engagement fall within the above definition in determining whether the engagement is a review and hence the competency requirements apply. 

Should a member always hold a Public Practice Certificate or Limited Practice Certificate in order to conduct a review engagement? 

Not always. 

Information on CPA Australia’s requirements to hold a Public Practice Certificate or Limited Practice Certificate are provided in Summary of the regulation of public accounting services in Australia (PDF). 

In addition, members should make themselves aware of the relevant statutory requirements as to what qualifications are required for the conduct of a specific review engagement. The CPA Australia guide, Incorporated Associations: Reporting and Auditing Obligations (PDF), provides information on qualification requirements stipulated in legislation or regulations for incorporated associations. 

What assurance or review standards should the member follow in conducting the review engagement? 

The competency requirements document sets out the professional and ethical standards the member must comply with when conducting review engagements. In addition to compliance with the requirements of Accounting Professional and Ethical Standard (APES) 110 Code of Ethics for Professional Accountants, members are also required to comply with the requirements of APES 210 Conformity with Auditing and Assurance Standards. 

APES 210 requires that unless legislation or other government authority requires a departure from Auditing and Assurance Standards issued by the AUASB, the member shall comply with the Auditing and Assurance Standards issued by the AUASB. Accordingly, members conducting review engagements must apply ASRE 2415 Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation, which prescribes the use of either:

The choice of ASRE 2400 or ASRE 2410 will depend on whether the member conducting the review engagement was also the auditor of the company or entity.