Professional Documents
Culture Documents
with
existing
or
previous
providers
of
professional
(b) The possibility of withdrawing from the engagement or from both the
engagement and the client relationship.
Consultation
PSQC 1 (34)
Consultation
-
The firm shall establish policies and procedures designed to provide it with
reasonable assurance that:
(a) Appropriate consultation takes place on difficult or contentious matters;
(b) Sufficient resources are available to enable appropriate consultation to take
place;
(c) The nature and scope of, and conclusions resulting from, such consultations are
documented and are agreed by both the individual seeking consultation and the
individual consulted; and
(d) Conclusions resulting from consultations are implemented.
Effective consultation on significant technical, ethical and other matters within the
firm or, where applicable, outside the firm can be achieved when those consulted:
Are given all the relevant facts that will enable them to provide informed
advice; and
Have appropriate knowledge, seniority and experience, and when conclusions
resulting from consultations are appropriately documented and implemented.
A firm needing to consult externally may take advantage of advisory services
provided by:
Other firms;
Professional and regulatory bodies; or
Commercial organizations that provide relevant quality control services.
Professional Development
and
activities
that
foster
their
professional
growth
and
development
Rule IV. Practice of Accountancy
SEC. 32. Continuing Professional Education (CPE) Program All certified
public accountants shall abide by the requirements, rules and regulations on
continuing professional education to be promulgated by the Board, subject to
the approval of the Commission, in coordination with the accredited national
professional organization of certified public accountants or any duly accredited
educational institutions For this purpose, a CPE Council is hereby created to
implement the CPE program.
professional
with
the
latest
trends
in
the
iii
iv
ii
The
programs,
competence
activities
of
the
or
sources
professional
shall
by
enhance
upgrading
the
and
b Programs,
Activities
and
Sources
for
Accreditation
and
Equivalent Credit Units - Any provider may submit to the PRC CPE
Council programs, activities or sources to be approved and accredited for
CPE units. The provider shall be notified of the disapproval of his CPE
programs, activities or sources without prior approval and accreditation
from the Council.
As used in these guidelines the following terms shall mean:
meetings,
non-degree
training
courses
and
scientific
meetings.
b Conventions shall refer to a gathering of professionals which shall
include, among others, conferences, symposia or assemblies for
round table discussions.
c Masteral Degree shall refer to a graduate degree in accountancy,
business
university.
d Doctoral
Degree
shall
refer
to
post
graduate
degree
in
materials and the like. Credits earned must be claimed within one
(1) year from the date of publication.
f
organization,
firm,
partnership,
corporation
or
CPE
which
enhance
the
competence
of
the
CPAs
by
about
modernization
and
scientific
and
technical
the next three-year period except credit units earned for doctoral and
masters degrees.
One credit hour of CPE program, activity or source shall be
equivalent to one (1) credit unit.
3
Sanctions
a Registered CPAs
Unless
otherwise
exempted,
registered
CPAs
in
the
practice
of
THE P R C C P E C O U N C I L : CREATION, C O M P O S I T I O N , T E R M S O F
OFFICE, FUNCTIONS, MEETINGS
a Creation The Board, upon approval by the PRC, shall create a Council
within thirty (30) days from the effectivity of this resolution. This shall
be known as the PRC CPE Council which shall assist the Board in
implementing its CPE program.
b Exercise of Powers and Functions The PRC CPE Council shall,
upon a majority vote, exercise powers and functions which shall include
but shall not be limited to the following.
ii
iii
iv
vi
CRITERIA
ACTIVITIES
FOR
OR
ACCREDITATION
SOURCES;
OF
PROVIDERS,
EQUIVALENT
CREDIT
PROGRAMS,
UNITS;
CREDIT
ii
Shall
have
instructional
an
established
mechanism
and
updated
activities;
iii
Must
have
adequate,
modern
and
updated
instructional
ADDENDUM:
6
a Permanent Exemption
A registered professional shall be permanently exempted from CPE
requirements upon reaching the age of 65 years old. To avail of this
exemption, the
i
professional must
Employment history
Position
Name of employer
Address of employer
ii
Temporary Exemption
A registered professional who is working or practicing his/her
profession or furthering his/her studies abroad shall be
temporarily exempted from compliance with CPE requirement during
the period of his/her stay abroad, provided that he/she has been
out of the country for at least two years immediately prior to the
date of renewal.
Any professional availing of this temporary exemption must:
If employed:
Position
Name of employer
Address of employer,
Certificate of employment
Hiring
(Human Resource Policies and Practices)
The most important element of the control environment is personnel, which is why
human resource policies and practices are essential. With trustworthy and
competent employees, weaknesses in other controls can be compensated and
reliable financial statements might still result. Honest, efficient people are able to
perform at a high level even when there are few other controls to support them. A
company should take care in hiring, orientation, training, evaluation, counseling,
promoting, compensating, and remedial actions. Recruiting practices that include
formal, in-depth employment interviews and evidence of integrity and ethical
accounting firm cannot perform any audit service for a firm if a chief executive
officer, controller, chief financial officer, chief accounting officer, or equivalent
position, was employed by that accounting firm and participated in any capacity in
the audit of that issuer during the one-year period preceding the date of the
initiation of the audit. The audit partner must be rotated away from that client every
five years.
Partnership Review and Rotation
Audits should be reviewed by partners in the accounting firm not connected with
the audit and should rotate their audit partners every five years. Under SOX, section
103, auditors should provide a concurring or second partner review by a qualified
person associated with the public accounting firm, other than the person in charge
of the audit, or by an independent reviewer.
The Sarbanes-Oxley Act requires that every registered public accounting firm
auditing publicly traded companies include in their quality control policies standards
relating to all of the following except:
(A) Consultation within such firm on accounting and auditing questions.
(B) Hiring, professional development, and advancement of personnel.
(C) Internal control policies.
(D) Internal inspection.
SOX, section 303 makes it unlawful for a registered public accounting firm to
provide audit services to an issuer if the lead audit partner having primary
responsibility for the audit, or the audit partner responsible for reviewing the audit,
has performed audit services for that issuer in each of the five previous fiscal years
of that issuer. Section 103 also states the quality control standards that were
discussed in 11.3 Quality Control, above.
Audit Committee Review of Auditors
Under SOX, section 301, public company audit committees are directly responsible
for the appointment, compensation, and oversight of the work of any registered
public accounting firm employed by their company (including resolution of
disagreements between management and the auditor regarding financial reporting).
Each such registered public accounting firm reports directly to the audit committee.
Auditors may also have to discuss accounting complaints with the audit committee.
Each audit committee must have established procedures for the receipt, retention,
and treatment of complaints regarding accounting, internal accounting controls, or
auditing matters.
KPMG Hiring Policies
Nelnet Audit Committee Policy The Hiring of Former Employees of KPMG (last
approved by the Board of Directors on 3/22/07)
Objective
To comply with the Act and related SEC rules and otherwise to avoid actual or
perceived conflicts of interest that might arise from the hiring of an individual who
as an employee of KPMG participated, beyond a certain minimum level, in the audit
of Nelnet.
Application
Since KPMG is the outside accounting firm that audits Nelnets consolidated
financial statements, this section applies only to the hiring of current and former
professional employees of that firm. It does not apply to hiring administrative staff
of KPMG or to hiring professional or administrative employees of any other outside
accounting firm. Should Nelnet replace KPMG as its primary external auditor, this
policy will apply to the new auditing firm and continue to apply to KPMG for the time
periods described below.
Policy
Unless the exception described below applies and until the specified time period
passes, neither Nelnet nor any consolidated subsidiary whose assets or revenues
constitute more than 20 percent of Nelnet consolidated assets or revenues, may
hire or appoint in a financial reporting oversight role the following current or
former employees of KPMG: the lead partner, the concurring partner or any other
member of the audit engagement team with more than minimal involvement in a
Nelnet audit as described below. None of these persons may be hired or appointed
in such a role until the passage of a full engagement period from their last
involvement or more than 10 hours providing audit, review or attest services in any
Nelnet audit which is listed in the annual KPMG Client Service Plan. An engagement
period begins on the day following the filing of the annual Form 10-K and ends on
the day the next Form 10-K is filed.
In addition, a current or former employee of KPMG cannot be hired if that individual
serves in an accounting role (which includes a financial reporting oversight role)
and that person
(i) influences the accounting firms operations or financial policies;
(ii) has a capital balance in the accounting firm; or
(iii) has a financial arrangement with the accounting form other than one providing
for regular payment of a fixed dollar amount:
(A) pursuant to a fully funded retirement plan, rabbi trust, or in jurisdictions in which
a rabbi trust does not exist, a similar vehicle, or
(B) in the case of a former professional employee who was not a partner, principal
or shareholder of the accounting firm and who has not been disassociated from the
accounting firm for more than three years, that is immaterial to the former
professional employee.
Definitions
Financial reporting oversight role means a role in which a person is in a position to
or does exercise influence over the contents of the financial statements of Nelnet or
anyone who prepares or approves them, such as a member of the board of
directors, the co-chief executive officers, the chief financial officer, the audit
committee executive, the director of internal audit, the director of financial
reporting or any equivalent position. Questions about the scope of this definition
should be referred to the audit committee executive.
Audit engagement team means all partners, principals, shareholders and
professional employees participating in an audit, review, or attestation engagement
of an audit client,
including those conducting concurring or second partner reviews and all persons
who consult with others on the audit engagement team during the audit, review or
(PSA 300, par. 4 & A5) The engagement partner and other key
(PSA 220, par. 14) The engagement team, and any auditors experts
who are not part of the engagement team, collectively should have the
appropriate competence and capabilities to:
o
to be issued.
(PSA 220, par. A11) When considering the appropriate competence and
nature
and
complexity
through
appropriate
training
and
participation.
o
requirements.
o
(PSQC 1, par. 30) The firm shall assign responsibility for each
(a) The identity and role of the engagement partner are communicated
Professional education.
Work experience.
independent.
(PSQC par. A27) The firm may use a suitably qualified external person,
for example, when internal technical and training resources are unavailable.
Making
personnel
aware
of
the
firms
expectations
regarding
Providing
personnel
with
evaluation
of,
and
counseling
on,