IRBA Newsletter Issue 54

Issue 54 | April-June 2021 21 EDUCATION & TRANSFORMATION cont. The ADP Reloaded re-establishes and makes clear the roles and responsibilities of all the stakeholders involved in the process – from the ORA, the RCA to the IRBA and the reviewing panel members. The new templates also encourage the ORA to be more involved in the RCA’s progress on the programme and then ensure that all the reports due to the IRBA are reviewed prior to their final submission. Furthermore, the new templates will result in the six-monthly reports plus the roles and responsibilities worksheets (old format) being replaced by the progress reports mentioned in the graphic above. When Will the Changes Be Effective and Who is Affected? The ADP Reloaded new templates became effective as of 1 June 2021. All RCAs who registered on the ADP less than six months prior to the effective date must now use the new PoE templates. Those who have been on the ADP for longer than six months can, at their own discretion, use either the old or new templates. However, the old templates may only be used up until 31 March 2022. Also worth noting is that those candidates using the old PoE format and who did not meet the submission deadlines will be required to use the new PoE format from the 1 st of April 2022. Training on the new PoE format is underway and will continue until all the affected stakeholders have been reached. RCAs, ORAs and PoE panel members are being provided with sufficient training and guidance to support them through the changes introduced as part of phase 1 of the ADP Reloaded. Below are other points and new developments you can look forward to: • RCAs who are on international secondment in their capacity as audit managers may have the international experience, limited to 12 months, recognised as part of the PoE. • ADP Reloaded will still make provision for the recognition of prior learning, with such experience being limited to 12 months, for candidates who wish to complete the ADP in less than 18 months. • Digitised technical content to provide extensive support for the RCAs, ORAs and PoE panel members. All the ADP content will be digitised and accessible on the ADP website, and communication on this will follow once it is finalised. • A digital Learner Management System to administer the ADP Reloaded process online, leading to more efficiently run and streamlined registrations, and a better monitoring of deliverables and reviews. This will form part of phase 2, which is currently in the planning stage. For more information on the new PoE structure and the new templates, please visit our website . A Developmental Advantage of the ADP: The Monitoring Visit The ADP firm monitoring visit is an integral process within the ADP and will continue under the ADP Reloaded. These visits are performed from a developmental aspect, to assess and manage the quality of the RCAs’ training process. They were designed to assess the quality of the environment in which RCAs are practising and achieving the relevant competences on the programme. It is important to note that the ADP monitoring visits are separate from the firm inspections performed by the Inspections Department. All firms with RCAs on the ADP will be subject to an ADP monitoring visit, prior to the term of the ADP ending. A visit will focus on: 1) Assessing firm compliance with ISQC 1 (and other quality standards); 2) Verifying the validity of the progress reports or the PoE documents submitted by the RCA to the engagement files; and 3) Evaluating whether the firm’s environment is conducive to developing an RCA to become a competent RA. The ADP team will highlight key findings from the firm inspections and provide recommendations as to how to improve the quality control environment in the firm, as required by the quality standards. The most common findings from ADP monitoring inspections during the past financial year were as follows: • Lack of firm policies and procedures around the engagement file close-out and lock-down within 60 days of the audit report sign-off date, including the safe custody of signed-off manual files. • Lack of a formal, documented performance management process for staff, outside of training articles. • Digital signatures used to sign independence declarations did not have write-restrictions or access controls to ascertain that the individuals signed in their own capacity. • Lack of documentation on the engagement files regarding the assessment for the need of an EQCR on the engagement, against firm policies and procedures and ISQC 1. • Insufficient documentation regarding the risks of fraud and error on an engagement within the planning minutes. This is as required by ISA 240 and has to be discussed by the engagement partner with all team members, prior to the start of an audit engagement. • Firm quality control manuals not revised regularly to keep abreast of quality standards changes and updates. The ADP monitoring visit process will continue to strengthen the quality of the RAs who qualify through the ADP and add value to the firms through the robust recommendations provided to firms, where findings are identified. The common findings listed above are in congruence with the firm-side key inspection themes, as noted in the recent IRBA public visits report for the 2020/2021 financial year.