ENGLISH SUMMARY

Quality assurance system in Finland

The new audit law which enters into force on 1st July, 2007 will lead to some changes regarding oversight and length of intervals between the quality control inspections.

General

In Finland, the quality assurance system is organised by the quality committees of the two associations of professional auditors, the Institute of Authorized Public Accountants (KHT-yhdistys – Föreningen CGR ry) and the Registered Association of Certified HTM-Auditors (HTM-tilintarkastajat ry). The systems of both associations are under the supervision of the Auditing Board of the Central Chamber of Commerce. The associations cooperate closely with the Auditing Board in developing the systems and reporting to it regularly.

The quality assurance system in Finland complies with the requirements of the European Commission’s Recommendation of 15 November 2000 on quality assurance for the statutory auditor in the European Union (2001/256/EC).

Associations of authorised auditors

Both associations have successfully in developed their own monitored peer review organisations. They have voluntarily prepared review inspection programs based on ISA:s.

The Institute of Authorized Public Accountants (KHT) started its peer review project in January 1993. The monitored peer review visits started in 1998. Recommendation of quality control (monitored peer review) is based on ISA 220 of IFAC (Quality Control for Audit Work). The system also contains training and consultation for the inspectors. The Institute issues the standards, coordinates the system, selects the persons who are responsible for the review and evaluates the peer review reports.

The peer review system of the Registered Association of Certified HTM-Auditors has the same structure as the system of the Institute of Authorized Public Accountants. Nevertheless, the two systems differ from each other in minor details. The peer review system of the Registered Association of Certified HTM-Auditors started in 1998. The first steps were taken in 1995 by starting quality training programs and developing working tools of for the members.

Almost all authorised auditors in Finland are members of either the Institute of Authorized Public Accountants or in the Registered Association of Certified HTM-Auditors. Authorised auditors who are not members of either of the associations are, however, under similar monitored peer review. These non-members are reviewed either by the Auditing Board of the Central Chamber of Commerce (KHT-auditors) or by the Auditing Committees in regional Chambers of Commerce (HTM-auditors) as subcontractors for Auditing Board.

Quality assurance system

The quality assurance system is a monitored peer review system focusing on individual auditors. The system is carried out by professional bodies that use professional auditors as their subcontractors to carry out the review with each auditor. The quality assurance systems, the monitored peer reviews, are financed by the profession.

All auditors in Finland are subject to quality control at least once in a 5-year period. Both associations publish general information of the quality assurance systems on their websites. They also publish annually the results of quality reviews.

Disciplinary sanctions

The monitored peer review does not have a disciplinary aspect as such. An operational disciplinary link is being discussed with the supervisory bodies. The associations exclude any member, who does not comply with the quality assurance obligations. The decision of dismissal of a member is delivered to the supervisory body – the Auditing Board of the Central Chamber of Commerce (KHT) and the Auditing Committees of the regional Chambers of Commerce (HTM), which will take necessary steps. This will include an order to carry out a quality control review visit or using disciplinary sanctions against the auditor in question.

Public oversight

The monitored peer review system is under the public oversight of the supervisory bodies. The Auditing Board of the Central Chamber of Commerce has supportive and supervisory roles in developing the peer review system in co-operation with both associations. The Auditing Board also receives annually reports of the results of peer reviews from both associations. The results are discussed in the meetings of the Auditing Board. There is continuous consultation between the Auditing Board and both associations regarding the development of the peer review system.

(Ministry of Trade and Industry, 2003)