Question content area top

Part $1$

What is a$$ "practice inspection" and what are the implications of the term for the public accounting$$ profession? What$$ organization$($s$)$ conduct$($s$)$ practice$$ inspections?

Question content area bottom

Part $1$

What is a$$ "practice inspection," and what$$ organization$($s$)$ conduct$($s$)$ practice$$ inspections?

$1.$

Practice inspection is a$$ review, by practice inspectors employed by the provincial institute or

ordre$,$

of a public accounting$$ firm's compliance with its quality control procedure system for auditing and accounting$$ engagements, and its compliance with the CPA Canada

Handbook.

Your answer is correct.

$2.$

Practice inspection is a$$ review, by$$ CPAs, of a public accounting$$ firm's compliance with its continuing education requirements and its compliance with the CPA Canada

Handbook.

$3.$

Practice inspection is a$$ review, by practice inspectors employed by the provincial institute or

ordre$,$

of a CPA$$ firm's compliance with its continuing education requirements and its compliance with the CPA Canada

Handbook.

$4.$

Practice inspection is a$$ review, by$$ CPAs, of a public accounting$$ firm's compliance with its quality control procedure system for auditing and accounting $$engagements$,$ and its compliance with the CPA Canada

Handbook.

Part $2$

What are the implications of the term$$ "practice inspection" for the public accounting$$ profession?

Practice inspection is

mandatory

in those provinces that have

instituted it$.$

Practice inspections can be

beneficial and costly

to the profession and to individual firms.

Part $3$

By helping firms meet

$$

$$

the profession gains if inspections result in practitioners doing

$$

$$

audits with a higher cost.

business with more clients.

higher quality audits.

A firm having a practice inspection can also gain if it improves the$$ firm's practices and thereby enhances its$$

$$

$$

effectiveness and ethics.

reputation and effectiveness.

reputation and ethics.

The$$ trade$-$off is that practice inspections can be

$$

$$

expensive.

detrimental to the quality of public practice.