January 23, 2023 • 18 mins
It’s shaping up to be another big year when it comes to accounting standards and auditing changes. This episode of Small Firm, Big Impact with Amir Ghandar FCA – Chartered Accountants ANZ Reporting and Assurance Leader, takes you through what small and medium sized practices and entities can expect, where they can find the resources to help them and the latest on CA ANZ’s advocacy work as it aims for simplicity and pragmatism.
Here’s are some helpful links to the resources Amir and Gillian talk about:
Subscribe to R&A News through My CA Communication Preferences
Sharing Knowledge Session: R&A Essential Update
How to become a Chartered Accountant
Other episodes:
Accountant’s Financing Letters
The ATO’s New Working from Home Deduction Method
Contact Gillian about the podcast: podcast@charteredaccountantsanz.com
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Gillian Bowen (00:07):
Hello, my name is Gillian Bowen, the Australian manager of
Public Affairs at Chartered Accountants, ANZ or CA ANZ. This is
Small Firm, Big Impact.
Amir Ghandar (00:22):
It's actually looking like a pretty big year for 2023.
There's a number of standards in play, either new standards
or post implementation reviews of some of the big standards.
There's no shortage of technical reasons and different stakeholders pushing
us towards greater complexity. But what we have to do
is look at the bigger picture and often push back.
(00:44):
We deal with about four or 500 member queries and
and sort of pieces of feedback in a year. And
a lot of that is very useful to identify these
types of issues and the pressures that that members are facing.
Gillian Bowen (01:00):
It's the podcast giving you and your clients the up to
date information you need to do your jobs. Each fortnight
I share resources, tools and expert advice provided by CA
ANZ and a range of people across our profession. So
make sure you're following the pod in your favourite pod app
and if you've got an idea for the show Email
(01:20):
podcast@charteredaccountantsanz.com . Today we have in Amir Ghandar Chartered Accountants, ANZ
Reporting and Assurance Leader in the hot seat. The topic:
changes to accounting standards in Australia and New Zealand, as
well as what's different in the auditing and reporting space
in 2023. Amir, Welcome to Small Firm, Big Impact.
Amir Ghandar (01:42):
It's great to be with you, Gill.
Gillian Bowen (01:43):
Look, let's get straight into it. What's happening with international
accounting standards and how do they apply locally to small
and medium sized practices?
Amir Ghandar (01:53):
It's actually looking like a pretty big year for 2023.
There's a number of standards in play, either new standards
or post implementation reviews of some of the big standards.
I guess to sum up there's increasing complexity overall coming
in to international accounting standards, a number of moving parts
at once. This year, one thing that complexity means we
(02:15):
have to be very careful how these standards translate locally
for SMEs, for small and medium entities, and of course
the impact on the practices that work with with those
types of entities. The biggest piece in play now in
that space is the framework reform in Australia, the removal
of special purpose reporting and replacement by a tiered model
(02:38):
and in New Zealand refining the tiered model that's already
in place. And also when we're looking at the standards
internationally in some of those big post implementation reviews, we'll
be looking at, for example, the leases standard, making sure we
have a really robust input from our members and getting
getting a view across, a real view and getting that
(02:59):
heard and working with peers in other countries to try
to effect change. We've had some success along those lines
that during the pandemic, for example, getting some relief on
some key areas that were causing problems. I guess you know,
in all our advocacy work on the accounting standards, a
major focus for us to to represent our small and
(03:20):
medium practice members is to aim for simplicity and pragmatism.
There's no shortage of technical reasons and different stakeholders pushing
us towards greater complexity. But what we have to do
is look at the bigger picture and often push back,
hopefully to land somewhere sensible and workable.
Gillian Bowen (03:40):
Mm hmm. And so then the changes that you've mentioned there,
why have they come about?
Amir Ghandar (03:48):
Well, look in both Australia and New Zealand, the government
has for a long time committed to adopting international standards
issued by the International Accounting Standards Board with only essential
kind of changes made for the local environment and the
local standards boards, the Australian Accounting Standards Board and the
New Zealand Accounting Standards Board take these international standards which
(04:10):
apply to larger listed entities and issuers. And and of
course we then have a sizeable population of entities outside
that space where either tweaks or significant requirements might apply
ideally in a more bespoke and fit for purpose way.
For example, private companies, not for profits, associations, you know self-managed
(04:32):
super funds. It's not always ideal, however, and the laws
and regulations impacting this can be fragmented across the states federally,
and sometimes quite obtuse outcomes occur.
Gillian Bowen (04:45):
That's always tricky, isn't it, about different, different jurisdictions rolling
out different things?
Amir Ghandar (04:49):
Absolutely. And we invest quite a lot of time working
with the standard setters to push for a practical and
reasonable approach that's in line with the international standards. In
New Zealand. For many years, a tiered system has applied.
So the standards for smaller entities get progressively simpler and
more suitable for smaller entities, right down to a cash
(05:11):
based management accounting type approach for the smallest entities. In Australia,
we've had special purpose reporting where entities decided on their
own accounting policies, where there notionally aren't uses that would
need to rely on general purpose financial statements. But one
of those major changes of the past few years and continuing
(05:32):
in 23 is where the Australian Accounting Standards Board is
phasing out this approach to be replaced by a tiered model,
as we have in New Zealand and a lot of
other parts of the world.
Gillian Bowen (05:43):
And our our members and the people who work in
this space across those changes, they know that this is
coming into force. And if not, then what is it
that CA ANZ is doing to ensure that they do know?
Amir Ghandar (05:56):
Yeah, So we have a, we have a lot of
regular forums and, and, and ways of, of both informing members,
but I think also really importantly getting the views of
members in. For example, we have monthly forums with, with
accounting experts from the small end of town to the
big end of town and some of those actually met
(06:16):
fortnightly during the pandemic. We've in the last few years
done an annual IFRS survey. Of about 500 to 700
members really looking to see how those international standards and
the local equivalants are impacting where the problem areas are..
Gillian Bowen (06:33):
Is that a good number of members getting involved in that.
Amir Ghandar (06:35):
Or that a decent or I'd certainly like more. You always,
always would like more, but that's a pretty reasonable cross
that gives us a cross-section of different types of members,
different locations and backgrounds. So if I use the example
of that framework reform in Australia, a really important pace
impacting on a lot of members, particularly in those small
(06:57):
and medium practices. We conducted a major survey early on
in that project a few years ago to understand views,
and it's challenging because there are a range of views
and there are strong views on on all sides of
the debate really, but ultimately landed on whatever change does
come through needs to be practical, workable and suitable for
(07:21):
the entities that applies to it in the for profit
space where that change has already happened and applied for
the first time in the last couple of years. We
saw in this year's IFRS survey that members of for
the most part saying that the burden has been reduced
through what's been done, but there is scope for further
simplification and in the not for profit space where, where
(07:44):
the future proposed changes are right now being consulted on.
And so we we would really encourage any input from members.
The proposed model from the Accounting Standards Board does take
into account very much the feedback we've provided from members
and simplified a lot of the key areas and the feedback
from members so far on that has been quite positive.
Gillian Bowen (08:05):
Look, you've mentioned the word burden there and I'm sure
those listening along would have their own view on this.
So feel free to let us know. But what is
the regulatory burden like out there at the moment?
Amir Ghandar (08:16):
So I guess the real challenge is making sure that,
in terms of accounting standards, that the right, the right
approach and the right standards and frameworks are applying to
the right entities. And that's a that's a major challenge
because we have a.
Gillian Bowen (08:31):
People would be like, well, are they are they applying?
Amir Ghandar (08:33):
We have a complex system with with many state and
federal agencies and different laws involved in determing who must report under
what standard. So. Notwithstanding the the Accounting Standards Board has
been very receptive to feedback about simplifying the models that
are there. We've we've really had to get involved and
(08:54):
invested quite heavily in helping the standard setter as well
as different agencies and departments around the states and federally
to make sure they're aware of the standards that are
coming through and how that fits into their to their
regulatory framework. And that's been largely quite successful that that
approach of getting ahead of that which we really have
(09:15):
been doing throughout the the process. But but I think
it's fair to say there are exceptions and this can
even change over time for particular entities. So we we
remain vigilant. We again call for input from members. We
deal with about four or 500 member queries and and
sort of pieces of feedback in a year. And a
lot of that is very useful to identify these types
(09:37):
of issues and the pressures that that members are facing
now that's in the for profit space it in the
not for profit space coming up, it could be even
more complex. So we we're working hard to get ahead
of any actual exposure drafts or standards coming through to
make sure that it's it's not just a sort of
unilateral piece, that it really does involve all those different
(09:59):
states and agencies and and that we're recognizing where the
pressures and impacts are going to come into play.
Gillian Bowen (10:05):
Because, I mean, there would be people listening along that
would be saying, great, you're asking for feedback. It appears
that you're hearing our feedback. But then are the people
who you pass on that feedback to as , the
government organizations, those setting the regulations, are they listening to
the issues that we are raising?
Amir Ghandar (10:23):
I absolutely. I think the standards boards in Australia and
New Zealand are listening and and receptive to the feedback.
We can see that they've genuinely listened to the feedback
when it came to the framework reform project in the,
in the for profit space and in the not for
(10:44):
profit space, you know significant simpler case simplification from where
they started and and early on in that that NFP area.
I think I summed up some of the feedback we
had as whatever comes needs to be simpler than special purpose.
And I put this to the Standards Board staff I
(11:06):
guess as a challenge and I. They've actually responded with
a well-received set of proposals that do dramatically simplify complex
areas like lease accounting, financial instruments, income and others in
a way that will make life easier for not for
profits and their accountants so they can get on with
what's more important.
Gillian Bowen (11:24):
I like that idea, making life easier. That's what everyone wants, is
that not as they start a new year.
Amir Ghandar (11:29):
But as I said, the real lift ahead is going
to be making sure that the state and federal agencies
and regulators adopt the right frameworks for the right entities,
have the right thresholds in place. And we're actively working
on this alongside the the standards set up.
Gillian Bowen (11:45):
So how are we helping practices and entities who are
working in this space with these changes and with all
the complexities that come with it, especially as things evolve
and change fairly rapidly, really?
Amir Ghandar (11:59):
Yeah. Look, I think we've got quite a range of,
of resources, so the first place I'd recommend to go
is our reporting in an Assurance Essentials guides, which come
out every six months as well as our update webinars,
which we've come to doing every six months now, which
talk through all the main changes in around an hour
of the next one's on February 2nd. Or if you're
(12:20):
hearing this after that, you know all members can still access that
as a recording.
Gillian Bowen (12:25):
Yeah, and we'll put links to those in the show
notes to make sure that if you're listening along now,
just go through to the description of the episode and
you'll be able to click straight onto those either to
register or to find the recording as Amir's mentioned.
Amir Ghandar (12:38):
And to stay up to date on a fortnightly basis
and also access a whole other range of tools, webinars.
And you can say what we're advocating on and the
views that we're hearing and putting forward. I'd highly recommend
subscribing to our free reporting and assurance news, which you
can do on My CA , I know even when I
was in practice that that newsletter was the place to
go and we do try to curate and make it
(13:00):
a really easy read and a way of staying up to date. Yeah.
And we also do some, some specific pieces on challenging
topics and work with the standards setters for example, we
invested in some very comprehensive tools in the, in the
pandemic to make sure members had what they needed to
navigate this. And we now, you know more recently we've done
some some work on some guidance on reporting and audit
(13:22):
in uncertain times and in the current inflationary environment as
well as a whole range of the other other different
sort of rats and mice issues.
Gillian Bowen (13:31):
Look, we are almost out of time because I don't
want this to go on too long because you mean,
I guess it is potentially a bit tiresome on the
brain talking all this heavy stuff.
Amir Ghandar (13:40):
How could you say that?
Gillian Bowen (13:43):
Maybe I'll edit that out. Look, let's talk auditing before we
run out of time. What has changed there? What's being
rolled out now? It's 2023.
Amir Ghandar (13:51):
So there's really two major pieces I'd point to the
the new risk management ...quality management standard as well as
the risk assessment standard. But let me focus on quality
management because that's a really major change for practices from
from December 202 a new standard applied for all audit and
(14:11):
assurance firms. ISQM 1 with with local equivalents in Australia and
New Zealand - it's a major update. And we really have invested
heavily to provide resources for small and medium firms to
be able to take on those new standards in a
way that allows them to focus on audit quality. We
have a comprehensive toolkit which was issued, you know, halfway
(14:33):
through last year, and that provides illustrative examples as well
as a comprehensive way of documenting a system of quality management.
Gillian Bowen (14:42):
Mm hmm. Mm hmm. And look, that's got me thinking.
And how many people have been affected by this? How
many how many practices or entities are we looking at
that will be impacted by this change?
Amir Ghandar (14:52):
I really talking thousands of practices. I mean, the lion's
share of registered company auditors and in Australia and New Zealand,
licensed and qualified owners are members of CA ANZ. That's
that's north of 3200 on the latest figures. And then
there's thousands of others doing other types of assurance engagements
for for other areas, for other types of entities.
Gillian Bowen (15:14):
So practices should have got this done already. If you've
said it's coming at the end of last year, December 2022,
would there be some who who haven't done it and
now need to get on top of it?
Amir Ghandar (15:25):
Yes. So firms by now should have the system of
quality management in place. And that means having conducted a
risk assessment. And of course, our tool, an illustrative risk analysis,
is available to help with this. It also means having
the responses in place to mitigate those risks, which our
toolkit also provides in terms of a set of policies. Now,
(15:46):
if if firms haven't done that, they'd really want to
get on with it. Technically, that that means they're not
in compliance. But but having said that, don't , don't panic.
Take a look at our quality management hub and I
think you'll find everything there. And I'd hope with those
resources it can actually be a helpful process to help,
you know, give small, smaller and medium firms confidence in
(16:08):
their risk management. At the end of the day, it's
those running the practices and working the practices that are exposed.
And the benefit of the approach in the new standards
is it's a tailored approach, risk management, rather than all
of the responses and controls being focused across the board,
including things that are really more for for larger firms.
So the opportunity is is here for those firms to
(16:31):
simplify their systems and make them much more bespoke to
what the risks that keep them up at night.
Gillian Bowen (16:37):
Hmm. We will put links to to that as well,
because we want you to be able to find the
information at your fingertips if you haven't worked out where
it might be on the CA ANZ website. Look, we're about
to wrap up. So what does the rest of this year
look like then under this new approach?
Amir Ghandar (16:52):
Well, the next step is it's really going to be
starting to operate your system of quality control and quality management,
I should say, and and undertake an annual evaluation. So
we've actually updated in December our tool kit to incorporate
some monitoring and remediation tools with a similar sort of simple,
tailored approach for SMPs to easily capture their quality findings
(17:16):
and work out what the implications are for their system
of of quality management.
Gillian Bowen (17:20):
We've covered a lot in a short amount of time.
There will be a transcript so you can read along
as well if you I'm thinking that we are moving
too fast for you. That is all we have time for.
If you want to find out more, as Amir has mentioned,
we've developed a tool kit for small and medium sized practices.
It is on our website. I will include a link
in the show notes. Also, have you listened to the
(17:41):
other episodes from season three, episode three has been very popular.
It's on accountant's financing letters, there's also a useful episode on cyber
security for SMPs, and one on the ATO changes to
work from home deductions. Handy if any of your clients
are starting a new job in the new year, follow
the pod to find the episodes or click on the
links I've put in the show notes for you. The
(18:03):
podcast has an email, so feel free to get in touch:
podcast@charteredaccountantsanz.com Let's start a conversation. Thank you Amir Ghandar for taking
us through these complex topics on Small Firm, Big impact.
Amir Ghandar (18:15):
Thanks for having me.
Gillian Bowen (18:16):
Bye bye.
Hello, my name is Gillian Bowen, the Australian manager of
Public Affairs at Chartered Accountants, ANZ or CA ANZ. This is
Small Firm, Big Impact.
Amir Ghandar (00:22):
It's actually looking like a pretty big year for 2023.
There's a number of standards in play, either new standards
or post implementation reviews of some of the big standards.
There's no shortage of technical reasons and different stakeholders pushing
us towards greater complexity. But what we have to do
is look at the bigger picture and often push back.
(00:44):
We deal with about four or 500 member queries and
and sort of pieces of feedback in a year. And
a lot of that is very useful to identify these
types of issues and the pressures that that members are facing.
Gillian Bowen (01:00):
It's the podcast giving you and your clients the up to
date information you need to do your jobs. Each fortnight
I share resources, tools and expert advice provided by CA
ANZ and a range of people across our profession. So
make sure you're following the pod in your favourite pod app
and if you've got an idea for the show Email
(01:20):
podcast@charteredaccountantsanz.com . Today we have in Amir Ghandar Chartered Accountants, ANZ
Reporting and Assurance Leader in the hot seat. The topic:
changes to accounting standards in Australia and New Zealand, as
well as what's different in the auditing and reporting space
in 2023. Amir, Welcome to Small Firm, Big Impact.
Amir Ghandar (01:42):
It's great to be with you, Gill.
Gillian Bowen (01:43):
Look, let's get straight into it. What's happening with international
accounting standards and how do they apply locally to small
and medium sized practices?
Amir Ghandar (01:53):
It's actually looking like a pretty big year for 2023.
There's a number of standards in play, either new standards
or post implementation reviews of some of the big standards.
I guess to sum up there's increasing complexity overall coming
in to international accounting standards, a number of moving parts
at once. This year, one thing that complexity means we
(02:15):
have to be very careful how these standards translate locally
for SMEs, for small and medium entities, and of course
the impact on the practices that work with with those
types of entities. The biggest piece in play now in
that space is the framework reform in Australia, the removal
of special purpose reporting and replacement by a tiered model
(02:38):
and in New Zealand refining the tiered model that's already
in place. And also when we're looking at the standards
internationally in some of those big post implementation reviews, we'll
be looking at, for example, the leases standard, making sure we
have a really robust input from our members and getting
getting a view across, a real view and getting that
(02:59):
heard and working with peers in other countries to try
to effect change. We've had some success along those lines
that during the pandemic, for example, getting some relief on
some key areas that were causing problems. I guess you know,
in all our advocacy work on the accounting standards, a
major focus for us to to represent our small and
(03:20):
medium practice members is to aim for simplicity and pragmatism.
There's no shortage of technical reasons and different stakeholders pushing
us towards greater complexity. But what we have to do
is look at the bigger picture and often push back,
hopefully to land somewhere sensible and workable.
Gillian Bowen (03:40):
Mm hmm. And so then the changes that you've mentioned there,
why have they come about?
Amir Ghandar (03:48):
Well, look in both Australia and New Zealand, the government
has for a long time committed to adopting international standards
issued by the International Accounting Standards Board with only essential
kind of changes made for the local environment and the
local standards boards, the Australian Accounting Standards Board and the
New Zealand Accounting Standards Board take these international standards which
(04:10):
apply to larger listed entities and issuers. And and of
course we then have a sizeable population of entities outside
that space where either tweaks or significant requirements might apply
ideally in a more bespoke and fit for purpose way.
For example, private companies, not for profits, associations, you know self-managed
(04:32):
super funds. It's not always ideal, however, and the laws
and regulations impacting this can be fragmented across the states federally,
and sometimes quite obtuse outcomes occur.
Gillian Bowen (04:45):
That's always tricky, isn't it, about different, different jurisdictions rolling
out different things?
Amir Ghandar (04:49):
Absolutely. And we invest quite a lot of time working
with the standard setters to push for a practical and
reasonable approach that's in line with the international standards. In
New Zealand. For many years, a tiered system has applied.
So the standards for smaller entities get progressively simpler and
more suitable for smaller entities, right down to a cash
(05:11):
based management accounting type approach for the smallest entities. In Australia,
we've had special purpose reporting where entities decided on their
own accounting policies, where there notionally aren't uses that would
need to rely on general purpose financial statements. But one
of those major changes of the past few years and continuing
(05:32):
in 23 is where the Australian Accounting Standards Board is
phasing out this approach to be replaced by a tiered model,
as we have in New Zealand and a lot of
other parts of the world.
Gillian Bowen (05:43):
And our our members and the people who work in
this space across those changes, they know that this is
coming into force. And if not, then what is it
that CA ANZ is doing to ensure that they do know?
Amir Ghandar (05:56):
Yeah, So we have a, we have a lot of
regular forums and, and, and ways of, of both informing members,
but I think also really importantly getting the views of
members in. For example, we have monthly forums with, with
accounting experts from the small end of town to the
big end of town and some of those actually met
(06:16):
fortnightly during the pandemic. We've in the last few years
done an annual IFRS survey. Of about 500 to 700
members really looking to see how those international standards and
the local equivalants are impacting where the problem areas are..
Gillian Bowen (06:33):
Is that a good number of members getting involved in that.
Amir Ghandar (06:35):
Or that a decent or I'd certainly like more. You always,
always would like more, but that's a pretty reasonable cross
that gives us a cross-section of different types of members,
different locations and backgrounds. So if I use the example
of that framework reform in Australia, a really important pace
impacting on a lot of members, particularly in those small
(06:57):
and medium practices. We conducted a major survey early on
in that project a few years ago to understand views,
and it's challenging because there are a range of views
and there are strong views on on all sides of
the debate really, but ultimately landed on whatever change does
come through needs to be practical, workable and suitable for
(07:21):
the entities that applies to it in the for profit
space where that change has already happened and applied for
the first time in the last couple of years. We
saw in this year's IFRS survey that members of for
the most part saying that the burden has been reduced
through what's been done, but there is scope for further
simplification and in the not for profit space where, where
(07:44):
the future proposed changes are right now being consulted on.
And so we we would really encourage any input from members.
The proposed model from the Accounting Standards Board does take
into account very much the feedback we've provided from members
and simplified a lot of the key areas and the feedback
from members so far on that has been quite positive.
Gillian Bowen (08:05):
Look, you've mentioned the word burden there and I'm sure
those listening along would have their own view on this.
So feel free to let us know. But what is
the regulatory burden like out there at the moment?
Amir Ghandar (08:16):
So I guess the real challenge is making sure that,
in terms of accounting standards, that the right, the right
approach and the right standards and frameworks are applying to
the right entities. And that's a that's a major challenge
because we have a.
Gillian Bowen (08:31):
People would be like, well, are they are they applying?
Amir Ghandar (08:33):
We have a complex system with with many state and
federal agencies and different laws involved in determing who must report under
what standard. So. Notwithstanding the the Accounting Standards Board has
been very receptive to feedback about simplifying the models that
are there. We've we've really had to get involved and
(08:54):
invested quite heavily in helping the standard setter as well
as different agencies and departments around the states and federally
to make sure they're aware of the standards that are
coming through and how that fits into their to their
regulatory framework. And that's been largely quite successful that that
approach of getting ahead of that which we really have
(09:15):
been doing throughout the the process. But but I think
it's fair to say there are exceptions and this can
even change over time for particular entities. So we we
remain vigilant. We again call for input from members. We
deal with about four or 500 member queries and and
sort of pieces of feedback in a year. And a
lot of that is very useful to identify these types
(09:37):
of issues and the pressures that that members are facing
now that's in the for profit space it in the
not for profit space coming up, it could be even
more complex. So we we're working hard to get ahead
of any actual exposure drafts or standards coming through to
make sure that it's it's not just a sort of
unilateral piece, that it really does involve all those different
(09:59):
states and agencies and and that we're recognizing where the
pressures and impacts are going to come into play.
Gillian Bowen (10:05):
Because, I mean, there would be people listening along that
would be saying, great, you're asking for feedback. It appears
that you're hearing our feedback. But then are the people
who you pass on that feedback to as , the
government organizations, those setting the regulations, are they listening to
the issues that we are raising?
Amir Ghandar (10:23):
I absolutely. I think the standards boards in Australia and
New Zealand are listening and and receptive to the feedback.
We can see that they've genuinely listened to the feedback
when it came to the framework reform project in the,
in the for profit space and in the not for
(10:44):
profit space, you know significant simpler case simplification from where
they started and and early on in that that NFP area.
I think I summed up some of the feedback we
had as whatever comes needs to be simpler than special purpose.
And I put this to the Standards Board staff I
(11:06):
guess as a challenge and I. They've actually responded with
a well-received set of proposals that do dramatically simplify complex
areas like lease accounting, financial instruments, income and others in
a way that will make life easier for not for
profits and their accountants so they can get on with
what's more important.
Gillian Bowen (11:24):
I like that idea, making life easier. That's what everyone wants, is
that not as they start a new year.
Amir Ghandar (11:29):
But as I said, the real lift ahead is going
to be making sure that the state and federal agencies
and regulators adopt the right frameworks for the right entities,
have the right thresholds in place. And we're actively working
on this alongside the the standards set up.
Gillian Bowen (11:45):
So how are we helping practices and entities who are
working in this space with these changes and with all
the complexities that come with it, especially as things evolve
and change fairly rapidly, really?
Amir Ghandar (11:59):
Yeah. Look, I think we've got quite a range of,
of resources, so the first place I'd recommend to go
is our reporting in an Assurance Essentials guides, which come
out every six months as well as our update webinars,
which we've come to doing every six months now, which
talk through all the main changes in around an hour
of the next one's on February 2nd. Or if you're
(12:20):
hearing this after that, you know all members can still access that
as a recording.
Gillian Bowen (12:25):
Yeah, and we'll put links to those in the show
notes to make sure that if you're listening along now,
just go through to the description of the episode and
you'll be able to click straight onto those either to
register or to find the recording as Amir's mentioned.
Amir Ghandar (12:38):
And to stay up to date on a fortnightly basis
and also access a whole other range of tools, webinars.
And you can say what we're advocating on and the
views that we're hearing and putting forward. I'd highly recommend
subscribing to our free reporting and assurance news, which you
can do on My CA , I know even when I
was in practice that that newsletter was the place to
go and we do try to curate and make it
(13:00):
a really easy read and a way of staying up to date. Yeah.
And we also do some, some specific pieces on challenging
topics and work with the standards setters for example, we
invested in some very comprehensive tools in the, in the
pandemic to make sure members had what they needed to
navigate this. And we now, you know more recently we've done
some some work on some guidance on reporting and audit
(13:22):
in uncertain times and in the current inflationary environment as
well as a whole range of the other other different
sort of rats and mice issues.
Gillian Bowen (13:31):
Look, we are almost out of time because I don't
want this to go on too long because you mean,
I guess it is potentially a bit tiresome on the
brain talking all this heavy stuff.
Amir Ghandar (13:40):
How could you say that?
Gillian Bowen (13:43):
Maybe I'll edit that out. Look, let's talk auditing before we
run out of time. What has changed there? What's being
rolled out now? It's 2023.
Amir Ghandar (13:51):
So there's really two major pieces I'd point to the
the new risk management ...quality management standard as well as
the risk assessment standard. But let me focus on quality
management because that's a really major change for practices from
from December 202 a new standard applied for all audit and
(14:11):
assurance firms. ISQM 1 with with local equivalents in Australia and
New Zealand - it's a major update. And we really have invested
heavily to provide resources for small and medium firms to
be able to take on those new standards in a
way that allows them to focus on audit quality. We
have a comprehensive toolkit which was issued, you know, halfway
(14:33):
through last year, and that provides illustrative examples as well
as a comprehensive way of documenting a system of quality management.
Gillian Bowen (14:42):
Mm hmm. Mm hmm. And look, that's got me thinking.
And how many people have been affected by this? How
many how many practices or entities are we looking at
that will be impacted by this change?
Amir Ghandar (14:52):
I really talking thousands of practices. I mean, the lion's
share of registered company auditors and in Australia and New Zealand,
licensed and qualified owners are members of CA ANZ. That's
that's north of 3200 on the latest figures. And then
there's thousands of others doing other types of assurance engagements
for for other areas, for other types of entities.
Gillian Bowen (15:14):
So practices should have got this done already. If you've
said it's coming at the end of last year, December 2022,
would there be some who who haven't done it and
now need to get on top of it?
Amir Ghandar (15:25):
Yes. So firms by now should have the system of
quality management in place. And that means having conducted a
risk assessment. And of course, our tool, an illustrative risk analysis,
is available to help with this. It also means having
the responses in place to mitigate those risks, which our
toolkit also provides in terms of a set of policies. Now,
(15:46):
if if firms haven't done that, they'd really want to
get on with it. Technically, that that means they're not
in compliance. But but having said that, don't , don't panic.
Take a look at our quality management hub and I
think you'll find everything there. And I'd hope with those
resources it can actually be a helpful process to help,
you know, give small, smaller and medium firms confidence in
(16:08):
their risk management. At the end of the day, it's
those running the practices and working the practices that are exposed.
And the benefit of the approach in the new standards
is it's a tailored approach, risk management, rather than all
of the responses and controls being focused across the board,
including things that are really more for for larger firms.
So the opportunity is is here for those firms to
(16:31):
simplify their systems and make them much more bespoke to
what the risks that keep them up at night.
Gillian Bowen (16:37):
Hmm. We will put links to to that as well,
because we want you to be able to find the
information at your fingertips if you haven't worked out where
it might be on the CA ANZ website. Look, we're about
to wrap up. So what does the rest of this year
look like then under this new approach?
Amir Ghandar (16:52):
Well, the next step is it's really going to be
starting to operate your system of quality control and quality management,
I should say, and and undertake an annual evaluation. So
we've actually updated in December our tool kit to incorporate
some monitoring and remediation tools with a similar sort of simple,
tailored approach for SMPs to easily capture their quality findings
(17:16):
and work out what the implications are for their system
of of quality management.
Gillian Bowen (17:20):
We've covered a lot in a short amount of time.
There will be a transcript so you can read along
as well if you I'm thinking that we are moving
too fast for you. That is all we have time for.
If you want to find out more, as Amir has mentioned,
we've developed a tool kit for small and medium sized practices.
It is on our website. I will include a link
in the show notes. Also, have you listened to the
(17:41):
other episodes from season three, episode three has been very popular.
It's on accountant's financing letters, there's also a useful episode on cyber
security for SMPs, and one on the ATO changes to
work from home deductions. Handy if any of your clients
are starting a new job in the new year, follow
the pod to find the episodes or click on the
links I've put in the show notes for you. The
(18:03):
podcast has an email, so feel free to get in touch:
podcast@charteredaccountantsanz.com Let's start a conversation. Thank you Amir Ghandar for taking
us through these complex topics on Small Firm, Big impact.
Amir Ghandar (18:15):
Thanks for having me.
Gillian Bowen (18:16):
Bye bye.
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