The Quality Review Visit process comprises of three stages; an opening meeting, fieldwork and a closing meeting. More information on the these stages can be found below, or you can download the publication 'Your Quality Review Visit' for a more detailed explanation of the visit process.
Before the on-site visit
The reviewer will plan the visit based on information supplied on the firm's Annual Return.
The reviewer will take account of any external quality assurance in place and the firm's own internal quality control procedures when planning the review.
The reviewer will telephone the firm approximately one week before the visit to confirm the arrangements, check on travel and parking facilities, and answer any questions. The reviewer will also remind firms of the documents required for the visit and in particular the lists of clients.
Where there is a good reason why a visit to the firm's premises is not desirable or practical then a review within the Institute's premises may be arranged. In these circumstances the firm will be required to bring selected files and documentation to the review meeting.
If a firm has any pressing queries before the pre visit call, it can contact the Visit Coordinator on 0131 347 0284.
Opening Meeting
An initial meeting will be held with the firm's nominated representative who should be one of the partners holding a practising certificate issued by ICAS. During the meeting the reviewer will explain the objectives of the programme and outline the details of the review visit. The reviewer will discuss, in particular the quality control procedures in place, and identify key controls to be tested.
Fieldwork
Review of Systems
The reviewer will perform compliance tests of the firm's systems to test the effectiveness of the controls. The tests will vary depending on the systems but will generally include but is not limited to:
- Structure of files, standard documentation, permanent information etc.
- Review of staff documentation, i.e. appraisals, training records, recruitment procedures etc.
- Review of library
- Adherence with Standards, Rules, Bye-laws and best practice guidance
- Maintenance of professional skills and standards
- Use of outside consultation
- Practice management as it relates to client money, money laundering, professional conduct, procedures for client acceptance and disengagement, advertising/communications policies; services directive disclosure requirements; bank accounts information
- Fee notes, commission statements, PII renewal documentation.
File Reviews
Some of the above areas are best covered by looking at the firm's current assignments. The reviewer will select files for review from the current client list. The selection will depend on the results of the systems review, and any external or internal quality assurance reports made available, but will usually cover all partners and all activities other than regulated areas already covered by an Insolvency Monitoring or Audit Monitoring visit.
Firms licensed to conduct restricted Investment Business by the Institute of Chartered Accountants of Scotland under the Designated Professional Body regime will have these activities monitored as part of the Quality Review visit.
The reviewer will prepare an index to the files being reviewed and clients' names will not be used in any of the documentation. The firm will be provided with a copy of the index at the closing meeting.
Where copies of documents from the files are considered necessary for the purposes of the review these will be requested from the firm's representative and client names and references should be removed before being passed over.
Where some file documentation is contained in a computer file the reviewer may ask for a hard copy to be provided or the Reviewer will require access to review the electronic files.
Closing Meeting
When file reviews are complete the reviewer will prepare a draft report which will contain an overall assessment of the firm. It will also contain the review findings with required corrective action and proposed timetable, and suggestions for improvement.
The firm will be provided with a copy of the draft report prior to the closing meeting to give them time to consider their responses.
The closing meeting will normally be between the reviewer and the nominated representative but any or all other partners may attend and staff may be included at the partners' request.
The draft report will be discussed and the firm's responses to matters raised will be noted and incorporated in the final report. If, during the discussion, any findings or suggestions are found to be inappropriate they will be deleted from the final report.
Discussion at the closing meeting will identify any breaches of law or any Institute regulation, Bye-law, Standards or binding Guidance which may require to be reported to the appropriate authority. Any decision on this will be taken by the Head of Quality Review but the firm should be aware that any significant breaches of Clients' Money regulations, Money Laundering or Designated Professional Bodies (DPB) rules.
What is the process after the visit?
The reviewer will submit the final report to the Head of Quality Review for review. If the final report differs materially from the draft report discussed with the firm at the closing meeting the differences will be identified and discussed with the nominated representative.
A copy of the final report will be issued as soon as possible and no later than six weeks from the date of the visit. Firms are given a further opportunity to comment on the report and to agree its terms. They will be asked to agree the report or send comments within 15 working days of receipt.
Agreed reports with no significant breaches will not be submitted to the Institute's Practitioner Certification Committee in detail.
In the unlikely event that the firm cannot agree the report with the Head of Quality Review then they will be invited to state the reasons for the disagreement in writing and this will be submitted to the Practitioner Certification Committee with the report for their consideration.
At the end of the process firms are asked to complete a feedback questionnaire in order to give us their views on the programme and the visit procedures. The firms' views are important to us and could shape how the programme operates in the future.
Click the FAQs below for more information.
In the second cycle of Quality Review, which ended on 30 June 2010, each firm was visited once in the five year cycle. (A small number of firms will also have received a follow up visit, at their expense usually, resulting from serious issues arising out of their first Quality Review visit in that cycle).
The third cycle, effective from 1 July 2010, is a six year cycle. Visits in the third cycle will be selected on a risk basis. Firms will be visited at least once in this cycle, but may be visited more frequently. Where there are significant visit issues on the initial visit, or additional risks materialise after the initial visit, the team may conduct further visit/s to the firm (follow up visits may still be at the firm's expense).
There are four selection criteria:
- Random selection from ICAS data base of firms and/or practising members
- Risk based selection based on information supplied via the Firm's Annual Return or from other information obtained on the firm
- Risk based selection from referrals from committees of ICAS and other regulatory bodies
- Joint selection in conjunction with forthcoming Audit Monitoring visits
All offices of the same firm will, where practical, be covered at the same time. We may also select firms in the same geographical area simply to minimise the costs of the review process. If the firm is audit registered by ICAS, the Audit Monitoring and Quality Review visits can be carried out at the same time, subject to practical difficulties and/or member preference.
A notification letter, including the proposed date of the review visit and the name of the reviewer, will be sent to the selected firm giving at least six weeks notice.
The Visit Coordinator should be notified immediately of any objections to the date of visit or the named reviewer. Provided the grounds for objection are reasonable, the visit will be rearranged. If the firm is covered by the quality assurance programmes conducted by either ICAEW or ACCA, the visit can be cancelled under our reciprocity agreements with those Institutes if the results of that visit are satisfactory and the firm is able to provide a copy of the report produced by them.
In addition to the visit notification letter, each firm will receive a Documents & Records List, which explains what information requires to be made ready for the visit. In addition each firm will receive a copy of Your Quality Review visit booklet which provides a detailed guide on what to expect from the visit.
No member of the Quality Review team may make use of or disclose the contents of any Quality Review report, file, any working paper file, document, any other material reviewed, any confidential information concerning the affairs of any firm or of their clients obtained during the course of a review visit, except where appropriate to the Practitioner Certification Committee.
In order to enhance confidentiality the name of the clients of the firm will not appear on the reviewer's visit file. This file will be destroyed within 12 months of the final report being agreed. A copy of the final report will be retained on the firm's file in ICAS.
Follow Up Action post visit - Submitting Evidence of Improvements
In the third cycle of Quality Review, which commenced on 1 July 2010, firms which have more significant visit issues may be requested by the Quality Review team to submit evidence of improvements following the visit.
For example, if the firm's accounts disclosures were of a poor standard, then it may be asked to submit a sample of financial statements, selected by the Quality Review team, a number of months after the visit, for the reviewer to assess whether the necessary improvements have been made.
Another example would be if there were clients monies breaches, then the Quality Review team might review the firm's bank statements, reconciliations etc. a number of months after the visit to ensure that the breaches were rectified.
Only the more significant findings will usually be followed up and the Quality Review team will endeavour to conduct this follow up action in a supportive manner with the firms affected.
Follow Up Visits
Where the firm is found to have significant problems, a follow up visit within 6 to 12 months (at the firm's expense usually) will be carried out to monitor progress with the recommendations made at the initial visit.
In the third cycle (i.e. post 1 July 2010) ICAS will be taking a risk based approach to visit selection and therefore firms may receive more than one visit in a cycle.
Firms with good visit outcomes and with no significant changes in their practice are likely to only be visited once in the cycle.
Other firms may be visited more than once. Examples of reasons for this are:
- the firm may have a lot of issues in their initial visit, which are not serious enough to warrant a follow up visit (at the firm's expense) but do warrant another visit later in the cycle to ensure appropriate action has been taken;
- the Firm's Annual Return indicates significant changes/additional risks in the practice have arisen after the initial visit;
- there is information received by the Quality Review team (e.g. from the Practitioner Certification Committee, in the media, from the Investigations department) indicating that a number of risks require to be addressed via another visit.
Please click if you need more information about the third cycle