PRACTICE MANAGEMENT

PRESENTED BY:

CHARLES EGAN

HEAD REVIEWER,

AUDIT QUALITY MONITORING

ICAG

PRACTICE MANAGEMENT --

AGENDA

OVERVIEW OF REQUIREMENTS,

REGULATION AND STANDARDS

PRACTICE GUIDANCE FOR SMPs – IFAC

GUIDE

KEY DISCUSSION TOPICSOVERVIEW OF REQUIREMENTS, REGULATION AND

STANDARDS

FULL MONITORING

RISK MANAGEMENT

PRACTICE DEVELOPMENT

PRACTICE REGULATIONS

SETTING UP A PRACTICE

SETTING UP A PRACTICE

ENGAGING IN PUBLIC PRACTICE?

REGISTERATION UNDER ACT 151,152 OR 179

LIMITATIONS UNDER ACT 179 REGISTRATION

INTEND NOT TO CARRY OUT STATUTORY AUDITS BUT

ONLY OTHER SERVICES?

ISQC 1

INTEND TO CARRY OUT STATUTORY AUDITS AND OTHER

SERVICES?

ISQC 1

AUDITING SYSTEMS THAT COMPLY WITH ISAs

FIRM LICENSED BY ICAG?

DO YOU HAVE A PRACTISING CERTIFICATE?

LEGAL COUNSEL’S

CONCLUSION

There are no LLPs in Ghana;

A partnership under Act 179

can no longer be deemed a

partnership but a company

and is thus not qualified to

be an auditor of a company

as provided for in Section

134(2) of Act 179

LEADERSHIP

ETHICAL REQUIREMENTS

ACCEPTANCE AND CONTINUANCE

HUMAN RESOURCES

ENGAGEMENT PERFORMANCE

MONITORING

INTERNATIONAL STANDARDS ON

QUALITY CONTROL 1 (ISQC 1)

PRACTICE

REGULATIONS

COMPLY WITH ANTI-MONEY LAUNDERING REGULATION ?

COMPLY WITH BYE-LAWS?

COMPLY WITH AUDIT REGULATION?

IS YOUR FIRM LICENSED & ARE PRACTICE CERTIFICATES IN ORDER?

COMPLY WITH OTHER RELEVANT LEGISLATION

PRACTICE

DEVELOPMENTPEOPLE ISSUES

RECRUITING;

TRAINING

(THEORY AND

PRACTICAL);

RETENTION

PRACTICE

DEVELOPMENT

ACQUISITION;

ENGAGEMENT;

DISENGAGEMENT

DISPUTES

CLIENT RELATIONSHIP

CLIENT

ISSUES:

PRACTICE

DEVELOPMENTFIRM ISSUES

COSTING OF

JOBS/RECOVERY

PERCENTAGES

RISK MANAGEMENT

SUCCESSION

PLANNING

RISK MANAGEMENT

HOT FILE REVIEWS

COLD FILE REVIEWS

ENGAGEMENT QUALITY

CONTROL REVIEWERS

ANNUAL COMPLIANCE

REVIEW (WFR & CFR)

QUALITY CONTROL

RISK MANAGEMENT

REGULATORY

COMPLIANCE

SECURITY OF

PHYSICAL ASSETS

FRAUD AND OTHER

BUSINESS CRIME

IT SECURITY

RISK MANAGEMENT

BUSINESS CONTINUITY

BUSINESS CONTINUITY

PLANS

DISASTER RECOVERY

PLANS

PROFESSIONAL

INDEMNITY

INSURANCE (PII)

FULL MONITORING

REVIEW

WHOLE FIRM REVIEW (WFR)

ALL ACCOUNTANCY PRACTISING FIRMS

ENGAGEMNT LEVEL REVIEWS

(CFR)

ONLY ACCOUNTANCY PRACTISING

FIRMS CARRYING OUT AUDITS/ASSURANCE

SERVICES

MODULES UNDER SMP PRACTICE

MANAGEMENT GUIDE ---IFAC

PUBLICATION

Module 1: Planning for your firm

Module 2: Practice models and networks

Module 3: Building and growing your firmModule 4: People power: Developing a people strategyModule 5: Technology and e-business

Module 6: Client relationship management

Module 7: Risk management

Module 8: Succession planning

PLANNING YOUR FIRM

(CONT’D)

Specialise or generalize? Your competitive

strategy

Overall cost leadership

Differentiation

Focus

PLANNING YOUR FIRM

(CONT’D)

Need for business planning

Developing a competitive strategy;

Brief statement of mission, vision and values;

Statement outlining the technical service deliveries;

Human relations- people and skills required;

More detailed plans;

Budgets, which support components above; and

Policies and Procedures

Effective relations with clients and employees

PLANNING YOUR FIRM (CONT’D)

Developing plans for your firm’s various

functions

Building a risk management mind set into your

firm

Implementing practice manuals and systems

Using benchmarks to drive performance and

improvement

PLANNING YOUR FIRM (CONT’D)

The business of running your firm

Find a client

Taylor a service

Agree price & terms

Engagement Letter

Gather informatio

n

Deliver service

Communicate outcome

Bill & collect

Firm

PLANNING YOUR FIRM (CONT’D)

Monitoring external factors

Business continuity – short term

and long term imperative

10 STEPS TO SUCCESSFUL RISK

MANAGEMENT

1 • STARTWITH QUALITY RECRUITMENT PROCESS

2 • ENSURE EMPLOYEES ARE PROPERLY TRAINED

3 • DO NOT DELEGATE TASKS BEYOND CAPABILITY LEVEL

4 • ENSURE EMPLOYEES ARE AWARE OF SYSTEMS AND STANDARDS

5 • IDENTIFY WEAKNESSES OR PROBLEMS WITH SYSTEMS

6 • EMPLOY PROPER REVIEW PROCESS

7 • MAINTAIN ADEQUATE SPREAD IN YOUR FEES

8 • HAVE ADEQUATE INSURANCE

9 • BACK UP YOUR RECORDS AND TECHNOLOGY

10 • BE FULLY AWARE OF PRIVACY AND CONFIDENTIALITY

BUILDING AND GROWING YOUR FIRM

Developing a business plan for your firm

Assessing growth requirements and developing a growth strategy

Strategies for coping with increased regulation and competition

BUILDING AND GROWING YOUR FIRM

(CONT’D)

Creating a culture for your

firm

Identifying target clients

and new service

opportunities

Building a brand

marketing and promotions

Putting your plans into

operation

Financial management

Meeting the challenge of acquiring new clients in the current economic environment

Identifying additional revenue streams that could be developed

Value-added services: developing profitable practice or service area niches

BUILDING AND GROWING YOUR FIRM

(CONT’D)

Using networks to add value and grow profitability

Improving the quality of your service: what will make you stand out and how can you offer a better service than your competitors?

Expanding through the purchase/merger of an accounting practice: what are the benefits and drawbacks?

BUILDING AND GROWING YOUR FIRM

(CONT’D)

DEVELOPING A

PEOPLE

STRATEGY

PEOPLE POWER

PEOPLE POWER – DEVELOPING A PEOPLE

STRATEGY

Your firm and its people

Business planning and staffing strategies need to be linked

Factors impacting people management

Community expectations

Economic changes

PEOPLE POWER – DEVELOPING A PEOPLE

STRATEGY (CONT’D)

Your people

management strategy

Mix of employees

Recruitment

Induction

Clarifying

expectations

PEOPLE POWER – DEVELOPING A PEOPLE STRATEGY (CONT’D)

Leading your

team

Managing and

retaining

employees

Training and

development

Tone at the top Motivation Identifying

development

needs

Communication Staff

retention

Development is

an investment

Delegation Performance

management

Remuneration

Assessing

performance

PEOPLE POWER – DEVELOPING A PEOPLE STRATEGY (CONT’D)

Rewards and

recognition

Exiting/transitioning

employees

Rewards Termination

Providing recognition Exit surveys

CLIENT RELATIONSHIP

Knowing your client

Reviewing your client base

Measuring & exceeding client expectations

Benchmark service levels

Embracing opportunities

Developing strategies to provide a full range of quality services : mergers, networking , referrals

Invoicing and collection --- Why clients don’t pay

Conflict resolution & arbitration

Ceasing a client relationship

SUCCESSION PLANNING

SUCCESSION PLANNING

Develop your succession plan

Select succession option

Partnerships, consolidations, mergers &

acquisitions

Sale of firm, fee parcel or progressive sell-down

Developing internal succession plans Valuation considerations

Exit considerations

ICAEW:

QUALITY CONTROL AND AUDIT DESCIPLIN

ICAEW:

ETHICAL MATTERS

THANK YOU

COMMENTS???

QUESTIONS???

SUGGESTIONS?

??