Applying the auditing competency standard
Frequently Asked Questions
First, you’ll need to be a member of CPA Australia or Chartered Accountants Australia and New Zealand (CA ANZ) or the Institute of Public Accountants (IPA).
Read and familiarise yourself with s.1280 of the Corporations Act 2001, ASIC RG 180 Auditor Registration, the Log Book and Auditing Competency Standard for Registered Company Auditors.
After you have satisfied the educational requirements of s.1280 of the Act, you should seek out an appropriate assessor within your firm. Selecting an assessor is an important decision. This person supervises your work and will assign you to appropriate audit engagements. This person must also take the responsibilities of guiding you through the completion of the tasks set out in the Log Book.
Plan with your assessor how you will demonstrate your ability to competently perform the various tasks required and how and when you’ll acquire the knowledge and skills to do so.
Most applicants will need to demonstrate their audit competencies on a variety of engagements over a three to five year period, commencing with the year of their admission as a member of CPA Australia or CA ANZ. However, if your assessor can assign you full-time to relevant audit engagements, you could demonstrate your competence in a shorter time.
If you apply for registration within two years of admission as a member of CPA Australia or CA ANZ, you will need to submit a Statement by a Referee. This will need to state the circumstances that enabled you to acquire the necessary knowledge and skills within such a short timeframe. This is in addition to the referee reports that ASIC requires.
- Your assessor should be a person within your firm who is an RCA and is either personally, or as a member or employee of a firm, subject to periodic quality reviews and minimum professional development requirements. The assessor must also be responsible, directly or indirectly, for reviewing or supervising your work, be prepared to accept the obligations of an assessor and be in a position to oversee your progress through the Log Book.
As well as overseeing your progress through the Log Book, the assessor is required to:
- ensure you have opportunities to acquire the knowledge and skills required to competently perform the various tasks expected of an RCA and demonstrate to the assessor that you are competent in performing those tasks
- assess, and attest to, whether you can competently perform the tasks
- verify your performance against each component of the standard
- have personal knowledge of your work to provide this verification.
The assessor should also familiarise themselves with the requirements of the standard. They should have a good understanding of the tasks and sub-tasks you must perform, and the skills, knowledge and methods needed to assess your competency. These are all set out in the Standard.
- Yes. The referee signing this Statement must be an RCA, must have known you for at least two years and must be a member or employee of a firm that is subject to quality review. Your assessor will usually be eligible to do this.
Yes. Note that a referee's report is different from a Statement by a Referee. ASIC requires two referees' reports as evidence that you can perform the duties of an auditor. In some instances, the standard requires a Statement by a Referee. The assessor can sign both the Statement by a Referee and one of the two ASIC referees' reports.
Not necessarily. In some instances, there may be some members who have, as part of their normal audit work over recent years, already demonstrated to an RCA in their office that they are competent in performing the tasks described in the Standard. These members may be able to immediately apply for registration.
If you fall into this category, you should complete the Log Book with details of the audit engagements demonstrating the necessary competencies and have it signed by the RCA as assessor. If your Log Book is completed retrospectively, you’ll need to provide supporting evidence and records to substantiate that reconstruction.
If competencies relating to some tasks were demonstrated more than five years prior to the date of application, a Statement by Referee is also required stating that you have acquired and retained the competencies that are necessary to perform those tasks.
Yes. You will need to:
- complete the Log Book for each of the tasks and activities and leave the Statement by Assessor at the end of the Log Book blank
- submit with your application a Statement by a Referee stating that they believe you are sufficiently competent to be registered as an RCA, attesting that you have acquired and retained the competencies required to perform each of the tasks and activities and, in relation to each, the basis for making such statement.
This referee would normally be the audit partner of your previous employer. As with all applications for registration, ASIC additionally requires two referees' reports, one of which needs to be from an RCA who has directly supervised your work. In this instance, three referee's reports or statements will be required, two of which the audit partner of your previous firm may provide.
The same information is required. However, you now need to find an RCA who has directly supervised your work and can attest to these points for each of your tasks and activities:
- state they believe you are sufficiently competent to be registered as an RCA
- attest you have acquired and retained the competencies required to perform each of the tasks and activities.
One option is to complete the Log Book for each of the tasks and activities and leave the Statement by Assessor blank. You are still required to provide a Statement by a Referee but in this instance, they can be an employee from a different firm. But they must still be employed by a firm that is subject to a quality review. ASIC requires two further referees' reports, one of which needs to be from an RCA who has directly supervised your work.
Another option is to apply for registration based on your experience. You need to demonstrate 3,000 hours of audit experience working under the direction of an RCA during the previous five years. At least 750 hours of that work must be spent supervising audits for clients. Your application needs to be accompanied by two referees' reports, one of which needs to be from an RCA who has directly supervised your work.
The Standard states that an applicant is expected to competently perform certain tasks in all situations that are likely to be encountered in the foreseeable future. The Standard also states that applicants may find it difficult to demonstrate enough competency if they have not been engaged on the requisite number of audits. Similarly, if an application has worked on relatively straightforward audits, they may struggle to demonstrate sufficient competency.
If you have demonstrated competence on a range of superannuation funds that have different environmental conditions and complexities to the satisfaction of the assessor, then you can apply.
The Act requires ASIC to be satisfied that you can perform the duties of an auditor and are otherwise a fit and proper person to be registered as an auditor. ASIC's advice is that 'capable' refers to the applicant's ability to meet their general duty of care and perform duties in a manner that is not negligent.
- No. Refer to paragraph 4.3 of the Standard. You should not demonstrate some sub-tasks to one assessor and other sub-tasks to another assessor. The assessor is required to evaluate if you are capable of performing a particular task and attest to that in the Log Book. The assessor's signature in the Log Book indicates you have demonstrated your competency in that task to the satisfaction of that assessor.
It is possible, although unlikely, that an assessor could evaluate your competency in all tasks and activities on the one audit engagement. The assessor will need evidence that you are competent in performing these tasks in a variety of situations and under different conditions. Although the assessor may simply question you about how you may perform a task in other situations, it is likely they will also want to observe you performing the task on more than one audit engagement.
Where you demonstrate competencies relating to a specific task or activity on more than one audit engagement, the details may not fit into the space provided in the Log Book. In this case, add the details in an attachment and include with your Log Book. The attachment should have the same column headings as the Log Book. Under each heading, list the task, the relevant audit clients, audit firm, assessor and date (and comments if appropriate). The assessor should sign the relevant section of the attachment.
- Yes. If there is more than one person in your firm supervising your work and both people are RCAs, it may be appropriate to have more than one assessor. If you have changed employment and have previously demonstrated competencies to an assessor at a previous firm, you will need to demonstrate the remaining competencies to an assessor who is employed by, or a member of, your new firm.
The assessor should use this column if they consider a comment necessary to their observations. This is not a mandatory requirement.
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