Top risk issues for public practitioners in 2025

Jan McCallum

This article was current at the time of publication.

Common issues have emerged from CPA Australia’s annual assessments of members under the Best Practice Program, a prompt for many practitioners to ensure they meet obligations on quality management systems, risk management and client communications.

CPA Australia Head of Professional Standards, Melissa Read FCPA, says CPA Australia will roll out new resources on audit and assurance, ethics and professional standards shortly to help members update their materials and maintain best practice.

Members should expect to undergo an assessment under the Best Practice Program every three, five or seven years depending on the services they offer. In 2024, CPA Australia assessed 509 members from 343 firms.

Here are some of the key issues discovered by our assessors. 

Ensuring compliance on tax and compilation services

APES 220 Taxation Services sets out bread and butter obligations, but the assessments found gaps in documentation and communications to clients.

Areas to pay attention to include:

• Clients’ rights and obligations under tax law. You must communicate the possible penalties and consequences so clients can make informed decisions.
• Ensure clients understand that written statements are their responsibility and that practitioners’ opinions are based on knowledge of client circumstances and self-assessment records.
• Working paper documentation must be available to support the compilation report.
• Documentation, including the agreed engagement terms and the client’s acknowledgement of their responsibilities, must be on file. 

Maintaining a system of quality management 

APES 320 Quality Management for Non-Assurance Services requires members to maintain a system of quality management (SOQM) that is current and up to date, with sufficient evidence of an active monitoring process, and of monitoring policies and procedures.

Jodie Smith FCPA, CPA Australia’s Best Practice Program Manager, says the standard requires annual monitoring, but practitioners do have to think about their SOQM more than once a year.

“We recommend they update as they change processes, ensuring everyone in the firm is aware of any change,” she says.

The assessments found instances where firms had no documented risk management framework, as required by APES 325 Risk Management for Firms, or failed to maintain their framework.

Read notes the that firms that perform well in managing risk have designated times to review their framework and can demonstrate they have an active monitoring process.

“Having a designated time allows them to focus on risk management. They can consider risks relating to changing circumstances, such as succession planning, and ensure terms of engagement are kept updated and that accepted terms are held in clients’ files.”

CPA Australia will soon be updating its client engagement templates, and Read says regular reviews enable practitioners to incorporate new tools and resources, so their systems remain current.

Audit and assurance: a warning for non-specialists

The assessments identified quality management as an issue in audit and assurance, particularly for firms that specialise in tax services and do not provide audit as a regular service.

CPA Australia is in the process of enhancing its compliance tool to assist members to comply with the Auditing Standard ASQM 1. 

Firms that do not specialise in audit may not be aware of all the requirements they must meet, and this can be a risk to those that conduct an audit at the request of a smaller client, such as a not-for-profit.

Read says if a practitioner does not specialise in audit, “they should consider the risks to their practice by accepting an audit engagement. If they decide to do it to support a smaller client, there are risks to them if they do not meet all the applicable auditing standards”. 

CPD requirements: more than meets the eye

Each year the Professional Standards team reviews a sample of members for compliance with CPA Australia’s CPD obligations. Where practitioners hold statutory licences, they also need to meet any additional and specific CPD requirements related to these. Their participation in the scheme may be affected by not meeting these requirements.  

Australian members: Professional Standards Scheme

The Professional Standards Scheme requires Australian members to publish the limited liability disclosure across all promotional material, including websites, email footers, letterhead, tax invoices and client brochures.

The assessments found most members have published the disclosure in some places, but many are omitting on all required material. Practitioners should ensure it is on all their material. 

Read says it is important for members to ensure they have the disclosure in all places “otherwise they are at risk of not being able to rely on the scheme”.

The correct wording is: Liability limited by a scheme approved under Professional Standards Legislation. Wording should be printed in a size equivalent to at least 8-point Times New Roman font.

“It sounds simple, but the disclosure can be omitted in website updates or when documents are redesigned, meaning it will appear on some documents but not all [required by the Professional Standards Council],” Read notes.