Peer Review Report Auditor in Bangladesh Dhaka –Free Word Template Download with AI

This Peer Review Report has been prepared in accordance with the requirements set forth by the Institute of Chartered Accountants of Bangladesh (ICAB) and the relevant International Standards on Quality Control (ISQC 1). The primary objective of this review is to evaluate the quality control system of the subject Auditor firm operating within Dhaka, Bangladesh. The review assesses whether the firm's policies and procedures are suitably designed and effectively implemented to provide the firm with reasonable assurance that the firm and its personnel comply with professional standards and regulatory requirements applicable in Bangladesh.

The scope of this Peer Review Report encompasses an examination of the firm's quality control manual, a review of selected audit files, and interviews with key personnel. The review focuses specifically on the firm's adherence to the Bangladesh Standards on Auditing (BSA), which are converged with International Standards on Auditing (ISA). Given the dynamic economic environment of Dhaka, the review also considers the firm's ability to manage risks associated with complex financial reporting and regulatory compliance in the local banking and corporate sectors.

The review team assessed the tone at the top within the Auditor firm. It was observed that the partners in Dhaka demonstrate a strong commitment to quality over commercial considerations. The firm has established a clear quality control policy that emphasizes professional skepticism and ethical conduct. The leadership actively promotes a culture where the integrity of the audit process is paramount, aligning with the ethical code mandated by the ICAB.

However, the review noted that while the leadership is committed, the communication of these quality objectives to junior staff members in the Dhaka branch could be more structured. Regular training sessions are held, but documentation regarding the attendance and effectiveness of these sessions needs improvement.

Compliance with ethical requirements is critical for any Auditor in Bangladesh. The Peer Review Report confirms that the firm has implemented procedures to identify, evaluate, and address threats to independence and objectivity. The firm maintains a client acceptance and continuance policy that screens for conflicts of interest.

The review examined the firm's handling of non-audit services provided to audit clients, a common practice in the Dhaka business ecosystem. The firm has established safeguards to ensure that providing tax or consulting services does not impair the independence of the Auditor. The review found that the firm's independence declarations are signed annually by all relevant personnel, which is a positive control measure.

The firm's procedures for accepting new clients in Bangladesh were reviewed. The Auditor firm conducts due diligence on potential clients to assess their integrity and financial stability. The review team found that the firm appropriately considers the competence of its staff and the availability of resources before accepting an engagement.

In the context of the Dhaka market, where corporate structures can be complex, the firm's risk assessment during client acceptance is generally robust. However, the Peer Review Report recommends that the firm enhance its documentation regarding the rationale for accepting high-risk clients, particularly those in the non-banking financial institution (NBFI) sector.

The quality of an audit is directly linked to the competence of the Auditor. The review evaluated the firm's human resource policies, including recruitment, training, and performance evaluation. The firm in Dhaka employs a mix of experienced Chartered Accountants and junior staff.

The firm provides training on the Bangladesh Standards on Auditing and local tax laws. However, the Peer Review Report identifies a gap in continuous professional development (CPD) tracking. While training occurs, there is no centralized system to ensure that every Auditor meets the mandatory CPD hours required by the ICAB. The firm is advised to implement a digital tracking system for staff development.

A significant portion of this Peer Review Report is dedicated to the review of selected audit files. The review team examined files from various sectors, including manufacturing, banking, and services, to assess the quality of the Auditor's work.

The review found that the firm generally follows the risk-based audit approach. The documentation of risk assessments, materiality calculations, and audit evidence was adequate in most cases. The Auditor demonstrated a good understanding of the client's business environment in Bangladesh.

However, some deficiencies were noted. In a few instances, the documentation of the review of accounting estimates was insufficient. Additionally, the review of subsequent events in the Dhaka context, where market conditions can change rapidly, was not always thoroughly documented. The firm must ensure that all significant audit judgments are clearly documented to support the audit opinion.

The firm has a monitoring process in place, which includes internal inspections of completed audit files. The Peer Review Report notes that while these inspections occur, the findings are not always systematically analyzed to identify recurring issues.

To improve the quality control system, the firm should establish a formal mechanism to communicate monitoring results to all partners and staff. This will help in addressing systemic issues and enhancing the overall quality of the Auditor's work in Bangladesh.

Based on the procedures performed, the Peer Review Report concludes that the Auditor firm in Dhaka, Bangladesh, has a quality control system that is generally suitable in design and operating effectively. The firm demonstrates a commitment to professional standards and ethical conduct.

However, to further enhance the quality of its services, the firm is recommended to:

• Improve the documentation of risk assessments and audit judgments.
• Implement a robust system for tracking Continuous Professional Development (CPD) for all staff.
• Enhance the communication of quality objectives to junior personnel.
• Strengthen the monitoring process to ensure that findings are used for continuous improvement.

The firm is expected to address these recommendations within the next twelve months. A follow-up review may be conducted to verify the implementation of these improvements.