There is some flexibility between what is considered key controls and recommended best practice. Some firms may not meet the standards without implementing some of the recommended best practices as well as key controls, while others may meet the standards without meeting some key controls.
The change in status could be due to the size and structure of the firm or the type of work conducted. Some common situations where a control will change from key controls to recommended best practice are indicated below.
3.1 Practice management
Key quality controls - these must be adopted before ACCA Quality Checked can be awarded
- Plan work and manage the workflow to meet deadlines without working under excessive pressure
- Have procedures in place to resolve client complaints and fee disputes
Recommended best practice - these are regarded as best practice but are not key to the award of
- Have procedures in place to contact clients before, at or after their year end to set a timetable for work to be done
- Plan staff allocation and schedule of jobs in advance to make best use of resources - Work experience should be organised to meet the firm's long term staffing and skills needs (this is key for firms holding or applying for ACCA Employer Accreditation)
- Control billing to ensure all work is charged whether fees are on a fixed fee or a time basis
- Keep work in progress under control by regular review and billing procedures
- Control debtors and take appropriate action to ensure payment is received within the payment terms
3.2 Image and promotion
Key quality controls - these must be adopted before ACCA Quality Checked can be awarded
- Maintain the business premises so that it presents a professional image appropriate to the firm's client base
- Have procedures in place to update technical information that is published in brochures, newsletters and on a website
- If a website has been set up, ensure information is kept up to date and is in accordance with ACCA's Rules of Professional Conduct. If this is an interactive site controls should be in place to protect client confidentiality
Recommended best practice - these are regarded as best practice but are not key to the award of ACCA Quality Checked
- Keep the reception area tidy and ensure staff are adequately trained to give a good first impression to clients
- Keep any meeting rooms tidy and free from confidential files so they are suitable to conduct client interviews
- Keep principals' offices reasonably tidy, especially if used to see clients
- Keep the office generally clean, tidy and well organised
Provide a good working environment for staff
3.3 New client procedures
Key quality controls - these must be adopted before ACCA Quality Checked can be awarded
- Have procedures in place to ensure professional clearance is obtained prior commencement of work
- Control acceptance of new clients to ensure procedures are followed in every case, particularly in the following areas:
- Keep a record of how new client identities have been verified
- Establish that there is no conflict of interest or compromise to independence or objectivity when accepting new appointments
- Confirm that adequate resources, expertise and relevant technical ability are available to service prospective clients
- Both the firm and the client have confirmed in writing precisely what services are required
- Obtain authority to act as the client's agent in dealing with the tax authorities
- Control the issue of engagement letters to ensure a signed copy is held before the firm commences work on the client affairs
Recommended best practice - these are regarded as best practice but are not key to the award of ACCA Quality Checked
- Issue fee protection insurance (FPI) engagement letters, if this is offered to clients under the firm's umbrella cover, to ensure clients are aware that if the insurance does not cover them for any reason they will be liable for any fees incurred.
3.4 Human resources
Key quality controls - these must be adopted before ACCA Quality Checked can be awarded
- Always obtain references before employment is offered
- Issue written contracts of employment to all staff (only key if this is law)
- Allocate assignments to staff which are consistent with their capabilities and taking account of their training and development needs
- Supervise staff and carry out a review their work by an appropriately qualified person
- Meet the eligibility criteria for ACCA Employer Accreditation at Approved level or above if firm is training ACCA students or members working towards an ACCA practising certificate
- Maintain the quality and technical ability by offering all staff adequate training, especially those carrying out high risk assignments
- Obtain written agreements with sub-contractors / consultants to include clear statement that the individual should at all times operate within ACCA RPCs
- Require subcontractors to maintain a level of competence in areas in which they carry out work for the firm
- Exercise an appropriate level of review over subcontracted work
- Use a secure method of data transfer if work is outsourced to another firm at a separate location
- Inform clients if work is going to be outsourced to another firm
Recommended best practice - these are regarded as best practice but are not key to the award of ACCA Quality Checked
- Require all staff and subcontractors complete Fit and Proper declarations, confidentiality and independence statements (key if carrying out audit work)
- Monitor the overall performance and development of staff in the workplace (this is key for firms holding or applying for ACCA Employer Accreditation Platinum level)
- Set individual development plans and objectives for staff and reviews progress as part of the firm's appraisal process
3.5 Correspondence, interview and telephone notes
Key quality controls - these must be adopted before ACCA Quality Checked can be awarded
- Give clear instructions to staff on who is authorised to write letters to clients and/or the tax authorities
- Control outgoing correspondence including e-mail and faxes
- Keep a written record of any relevant matters discussed with clients over the telephone or at meetings
- Have a policy to determine who is authorised to give advice to clients, and ensure staff understand what advice they can give and what they cannot
- If a sole practice, ensure the above controls are adequately covered during the principal's absence from the office, due to meetings, holidays, sickness or for any other reason
Recommended best practice - these are regarded as best practice but are not Key to the award of ACCA Quality Checked
- Exercise control over incoming post
3.6 Office filing
Key quality controls - these must be adopted before ACCA Quality Checked can be awarded
- Maintain a simple, systematic filing system that is understood by all members of staff
- Have procedures in place to ensure documents are filed promptly
- Have a suitable policy for the retention and destruction of files
- Use a suitable method to dispose of confidential waste
Recommended best practice - these are regarded as best practice but are not key to the award of ACCA Quality Checked
- Securely fasten all documents to files (if all papers are loose this will become key)
- Use a correspondence referencing system that clearly identifies the principal in charge and the member of staff who wrote the letter
- Keep appropriate files and separate for easy access to information where this may be suitable to size of client, e.g. tax file, correspondence file, accounts preparation file and a permanent file
- Have a policy for files to be returned to system after use
Have a system for archiving files to ensure easy access and retrieval
3.7 Security of computerised data files
Key quality controls - these must be adopted before ACCA Quality Checked can be awarded
- Put procedures in place to protect confidentiality and keep electronic data secure
- Put in place a contingency plan in case of fire, theft or major system failure
- Maintain regular backups of all data files off site and test ensure that data can be retrieved
- Use appropriate protection to ensure the system is not infected by any computer viruses
- Where 'hard copy' is not retained have a policy for computer file retention and file destruction
Recommended best practice - these are regarded as best practice but are not key to the award of ACCA Quality Checked
- Use the same file referencing system throughout the firm, clearly identifying the client and the work held on that file and the date or version of the data
- Control what software products are loaded on the firm's computers to prevent breach of copyright
- Comply with any requirements for registration or notification under data protection legislation (this is key if required by law)
3.8 Personal tax (sole-traders, partnership and employees)
Key quality controls - these must be adopted before ACCA Quality Checked can be awarded
- Terms of engagement are clearly defined in writing
- Log and track the progress of all tax returns to ensure they meet the relevant deadlines
- Identify tax disallowed items and prepare tax schedules as part of accounts preparation
- Inform the client of the tax liability, due dates and potential penalties in writing
Recommended best practice - these are regarded as best practice but are not key to the award of ACCA Quality Checked
- Log and track the progress of assessments and appeals where self assessment does not apply
- Have procedures in place to obtain necessary information from clients on a timely basis (this can be standard letters, individual letters or by telephone with a file note of the date the client was reminded)
- Check information received to ensure it is complete and have a procedure in place to request any missing or additional information required
- Complete tax returns on a systematic basis (ensure completeness of information before work commences)
- Record the review of work
3.9 Corporate tax
Key quality controls - these must be adopted before ACCA Quality Checked can be awarded
- Terms of engagement are clearly defined
- Use a reminder system to ensure that any claims and elections are not overlooked and that any deadlines are not missed
- Identify tax disallowed items and prepare tax schedules as part of accounts preparation
Inform the client of the tax liability and due dates in writing
Recommended best practice - these are regarded as best practice but are not key to the award of ACCA Quality Checked
- Log and track the progress of assessments and appeals where self assessment does no apply
- Record the review of work
3.10 Accounts for sole traders, partnerships and audit exempt companies
Key quality controls - these must be adopted before ACCA Quality Checked can be awarded
- Terms of engagement are clearly defined
Track and monitor 'jobs in' and work in progress adequately - Standardise accounts preparation working papers to clearly show how the accounts have been constructed and the source of the information used
- Have standard procedures to systematically check accounts for errors, omissions and statutory disclosures
- Use an appropriate format when preparing accounts, to include a balance sheet where appropriate
- Obtain approval of the accounts from the client
- Put accounts finalisation control procedures in place to control the quality of accounts prepared and to ensure they are reasonable from the point of view of the tax authorities
Recommended best practice - these are regarded as best practice but are not key to the award of ACCA Quality Checked
- Standardise the accounts preparation working papers to include an index, lead schedules and ensure they have a structured layout
- Secure all papers in accounts preparation files (if all papers are loose this will become key)
- Record the review of work carried out by a principal or senior qualified member of staff
3.11 Management accounts
Key quality controls - these must be adopted before ACCA Quality Checked can be awarded
- Terms of engagement are clearly defined
The following controls are not key if all the firm does is complete bookkeeping entries at the client's premises and the management accounts are an automatic by-product of this process and not made available to third parties
- Clearly identify estimates and assumptions for the user of the accounts
- Have standard procedures to systematically check accounts for errors, omissions and statutory disclosures
- Obtain approval of the accounts in writing from the client when the accounts are being made available to third parties
- Restrict the use of management accounts to the purpose for which they were prepared, for example, 'for internal use only'
- Use a disclaimer stating that you have relied on information and explanations provided by the client
Recommended best practice - these are regarded as best practice but are not key to the award of ACCA Quality Checked
- Plan and control work and use of standard working papers as with any accounts preparation
- Record any analytical review work to help with advising clients
- Record an effective review of work (where work is not carried out by principal)
3.12 Payroll and statutory deductions compliance work
Key quality controls - these must be adopted before ACCA Quality Checked can be awarded
- Terms of engagement are clearly defined
Control the timing of work to ensure no payrolls are overlooked - Obtain authorisation in writing for any changes to salary rates and for starters and leavers to the payroll
Keep evidence of any authority to operate / change tax codes issued by the tax authorities - Inform the client of any payments and submissions to the tax or other statutory authorities in time to meet relevant deadlines
- Principals should control payments made on behalf of clients whether this is a mandate to sign cheques on the client's own bank account, authority to make payments through the banks automated credit systems or where money is transacted through the firm's client account
Recommended best practice - these are regarded as best practice but are not key to the award of ACCA Quality Checked
Ensure staff involved in payroll work are adequately trained and keep up-to-date by attending relevant courses or workshops
3.13 Sales tax or VAT compliance work
Key quality controls - these must be adopted before ACCA Quality Checked can be awarded
- Terms of engagement are clearly defined
- Control work to ensure returns are completed in time to meet deadline and to ensure that none are overlooked
- Ensure working papers show a clear 'audit trail' identifying the source of the information used
- Clearly identify any adjustments to the figures in the working papers
- Obtain specialist advice, where appropriate, in writing or record as a file note and kept with permanent information on the client's file
Recommended best practice - these are regarded as best practice but are not key to the award of ACCA Quality Checked
- Use staff of with suitable level of experience and expertise and provide adequate training to keep them up to date
- Record the review of work by senior qualified accountant or principal (If junior or inexperienced staff used this is a key point)
3.14 Specialist assignments
The type of assignments covered under this heading are probably some of the highest risk work firms will engage in, e.g. forensic accounting, due diligence work, projections and forecasts, administering estates of deceased persons, insolvency, liquidations and receiverships in countries where these are not regulated work.
These assignments may provide information to assist either clients or third parties in decision making activities. In addition, although often one off assignments, they require a high degree of expertise and a sound knowledge of the client's affairs and the industry in which they work.
Firms should have quality controls in place to ensure these assignments are carried out in accordance with the quality assurance principles.