Practice review is a critical element in enhancing audit quality, which in turn supports effective regulation of the accountancy profession and protection of the public interest. The MIA Practice Review Committee is empowered by the MIA to carry out surveillance activities on audit firms (AFs) registered with the Institute to ensure that audit practitioners adhere to International Standards of Auditing (ISAs), professional standards, legal and regulatory requirements when they perform their audit work.
The Practice Review Programme (PRP) is established under Section B250: Quality Assurance and Practice Review of the By-Laws of MIA. Practice Review is a process whereby the standards and procedures of members’ audit practice are assessed to ensure that they are in compliance with professional standards, legal and regulatory requirements.
As MIA is an IFAC member, the PRP is a mandatory requirement that forms the substance of the Statements of Membership Obligations (SMOs), in particular SMO1 on the requirements to conduct practice review of its member firms.
PRP has 3 objectives:
- To confirm members’ obligation to maintain, apply and observe the standards promulgated by the Institute
- To undertake the regulatory role as provided under the Accountants Act 1967, as well as to align with the latest international developments; and
- To enhance the confidence of the business community in our members’ standard of professional work.
The practice review framework requires all audit firms to submit to practice review. The PRP does not set new standards. Rather, the Practice Review Department reviews the compliance to existing professional and regulatory standards that auditors, regardless of the size of their firm, are expected to comply with. MIA applies a risk-based approach for selection of audit firms for practice review. Selection of firm for review is based on their risk profiles, developed using information obtained from the Annual Return submitted by AFs and other relevant sources. Audit firms may also be selected for review based on referrals from other regulatory bodies in Malaysia or other committees of the Institute.