Quiz: Is your practice up to speed?

Content Summary

26 Aug 2025

3 min read time

Professional standards

Blue background with question mark blocks

The article is relevant to members in Australia and New Zealand and was current at the time of publication.

1. In which of the following circumstances are you required to disclose non-compliance with laws and regulations to an appropriate authority?

When there is a legal obligation for me to do so, and when non-compliance may have wider public interest implications in terms of causing potentially substantial harm.
When there is a breach of confidentiality on the part of my client.
When the non-compliance is related to my client’s personal misconduct but unrelated to the business activities.
When I have a client who is above the law.

2. At a minimum, how often should you review your Quality Management Manual?

Every 10 years.
Every two years.
Annually.
When I have my CPA Australia Best Practice assessment.

3. Which of these is a deficiency in a system of quality management?

Failure to maintain a current system of quality management.
Client satisfaction with my services.
Failure to use the CPA Australia Quality Control Management Tool.
Keeping records as evidence of monitoring policies and procedures.

4. Which of these can result in key risks to a practice?

Not disclosing the use of outsourced services, including location.
Not retaining an accepted “terms of engagement” on client files.
Not taking my client’s child on as an unpaid intern.
All the above except C.

5. Where must you disclose your participation in a professional standards scheme? (AU only)

Letterheads, formal letters, newsletters, website.
Letterheads, formal letters, newsletters, website, terms of engagement.
Letterheads, formal letters, newsletters, website, terms of engagement, fees or invoices if unaccompanied by a separate disclosure document, or any other promotional material.
On a jumbotron at a Coldplay concert.

Answers

1. A

Under the APES 110 Code of Ethics for Professional Accountants (including Independence Standards), professional accountants are required to disclose non-compliance with laws and regulations (NOCLAR) where there is a legal obligation to do so or when the non-compliance may result in substantial harm to the public interest.

In such cases, disclosure to an appropriate authority is permitted, even if it overrides the usual duty of confidentiality, provided it is not prohibited by law. This ensures accountants act in the public interest — a core principle of the Code.

This webinar covers the bases.

2. C

You should revisit and review your quality management system annually and in line with your policy and procedure. You should also update the system when there is a material development (such as a change of partner). It is important to review the standard applicable for your firm as part of your review.

3. A

While you are not required to use the CPA tool, it is highly recommended. However, simply using the tool is not enough: your system of quality management needs to be current and tailored to the specific needs of your practice. You need to keep appropriate records to demonstrate that your system is regularly monitored, reviewed and updated (at least annually). Your quality management system should contain all policies and procedures relevant to everyone in the firm, even if you are a sole practitioner.

Here are some resources from My Firm. MyFuture to assist you.

4. D

You need to have a current and signed “terms of engagement” on each of your client engagement files, which outlines all the terms of the agreement that you and your client have in place.
This includes the scope of services you are providing. If you are using outsourced services, including cloud computing, you need to include the service you use and the location of the data storage, so your client can make an informed decision about whether to accept the terms.

Here are the top risk issues for public practice firms.

5. C

Members must display the notification of limited liability statement: “Liability limited by a scheme approved under Professional Standards Legislation” in at least 8-point Times New Roman font on all promotional material including letterheads, invoices, websites, email footers, brochures and promotional materials.

Quiz: Is your practice up to speed?

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