23 October 2015
CPA Australia Ltd
ABN 64 008 392 452
Level 20, 28 Freshwater Place
Southbank VIC 3006
Australia
The Chairman
Accounting Professional & Ethical Standards Board
Level 7, 600 Bourke Street
MELBOURNE VIC 3000
AUSTRALIA
GPO Box 2820
Melbourne VIC 3001
Australia
Phone 1300 737 373
Outside Aust +613 9606 9677
Website cpaaustralia.com.au
On line: apesb.org.au
Dear Nicola
Exposure Draft 03/15 - Revision of APESB pronouncements
CPA Australia welcomes the opportunity to respond to the above Exposure Draft. CPA Australia
represents the diverse interests of more than 150,000 members in 120 countries. Our vision is to
make CPA Australia the global accountancy designation for strategic business leaders. We make this
submission on behalf of our members and in the broader public interest.
CPA Australia supports the revision of the proposed standards to ensure alignment with APES 110
Code of Ethics for Professional Accountants (Code) and broadly supports the other proposed
revisions, subject to our comments below.
We encourage the Board to undertake one comprehensive consultation annually on standards that
need to be reviewed as a result of stakeholder feedback or other identified needs and one release of
the revised standards. This would lead to a more effective communication to our Members and other
stakeholders.
We provide specific comments and suggestions for each standard below.
Specific Comments
APES 215 Forensic Accounting Services
In the primary objectives in paragraph 1.1 the following is listed:

‘the types of Forensic Accounting Services that can be provided to a Client or Employer’
CPA Australia is of the view that it is not the standard’s objective to specify what types of services can
be provided but professional and ethical obligations in relation to the forensic accounting services
provided. So our suggestion is to delete this objective.
This paragraph further states:

‘relationships and the provision of other Professional Activities that create threats or conflicts
of interest with respect to the Member’s ability to comply with the fundamental principles’
We suggest consideration of the following that communicates more concisely the same content:

relationships and the provision of other Professional Activities that create threats to
compliance with the fundamental principles
APES 225 Valuation Services
In the primary objectives in paragraph 1.1 the following are listed:


‘the types of Valuation Services that can be provided to a Client or Employer;’ and
‘matters to be disclosed in a Valuation Report and the nature and extent of evidence required
to support the Valuation Report’.
CPA Australia is of the view that APES 225 does not and should not prescribe what types of valuation
services can be provided and suggests that the first objective be deleted.
Similarly, in relation to evidence we are of the view that ‘nature and extent’ may be understood as
requirements of the content of the evidence. The standard refers to the qualitative characteristics of
the evidence. However, we are not convinced that this represents a primary objective of the standard
and suggest the inclusion of only:

matters to be disclosed in a Valuation Report
Paragraph 4.2 replaces the requirement ‘to include’ with the requirement ‘to document’ the content
listed in points (a) to (f). We are of the view that the extant requirement to include is more accurate
and better aligned with paragraph 4.1, as APES 305 Terms of Engagement offers additional guidance
that is not included in paragraph 4.2 of the standard. The requirement to document may be seen as
not encouraging or even allowing the inclusion of the guidance contained in APES 305 Terms of
Engagement and may further be seen as contradicting paragraph 4.1.
Paragraph 4.6 provides guidance on reliance on information provided by others, specifically the Client,
its management or a third party; and defines these as ‘the relevant party’. We are of the opinion that a
distinction between information provided by the Client or its management and a third party is
necessary and can lead to a more effective and efficient approach to information provided by another
party. If the Client is the third party, then it is unclear who would form the first two parties.
We also note that paragraph 4.6 of APES 305 Terms of Engagement includes:
“Relative responsibilities: Responsibilities agreed upon, detailing those acknowledged to be
the responsibility of:
(a) the Member in Public Practice, including reference to relevant confidentiality requirements
and the impact of them on the quality review program of the relevant professional body to
which the Member in Public Practice belongs;
(b) the Client, noting the fact that the Client is responsible for the completeness and accuracy
of information supplied to the Member in Public Practice; and
(c) any third party.”
We are of the view that this paragraph in APES 305 Terms of Engagement addresses the issue
sufficiently and we are unsure of the need to explicitly address the issue in the standard with the
additions of paragraphs 4.6 and 4.7.
However, if the Board is of the view that the issue needs to be explicitly addressed in this standard,
the following can be added in paragraph 4.2:
Where a Member in Public Practice has relied on information provided by the Client, its management
or a third party, the Member should consider requesting a written representation from that party, which
confirms that the information provided is accurate and complete in all material respects.
We are not convinced of the value of the review of the draft valuation report and its mention in the
representation report in relation to information provided by a relevant party.
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If the Board is convinced that the addition of paragraphs 4.6 and 4.7 is necessary, then we would urge
it to consider the following:
In essence, Paragraph 4.6 states that if the client or its management provided information that has
been relied upon, then the Member in Public Practice should consider providing the draft report to the
Client or its management - but only with the consent of the Client and subject to the Terms of
Engagement. We think that this requirement is obsolete as it asks the Member to gain permission
from an entity to provide information to that same entity, and as mentioned earlier, it can be better
addressed in the terms of engagement.
Further, paragraph 4.7 refers to reliance on a representation. Given that paragraph 4.6 discusses
reliance on information and requesting a written representation, we are of the view that paragraph 4.7
should refer to reliance on information, as the representation is not providing the information but it is
about the quality of the information.
Finally, the proposed paragraph 4.7 may contradict the spirit of Section 210 Professional Appointment
of the Code, which requires the assessment of the appropriateness of reliance on information rather
than an assumption that information is reliable.
APES 320 Quality Control for Firms
While we support consistency across standards we think that in relation to APES 320 paragraph 1.1 is
reiterating what is expressed in paragraph 3, and we do not think this duplication is necessary so we
propose the deletion of paragraph 1.1.
If the proposed paragraph 1.1 is retained, it refers to a Member in Public Practice and a Firm. Given
that the term Member in Public Practice is used to refer to a Firm, we are of the view that it is not
necessary to refer to both. Further, the standard imposes requirements on the Firm, so it may be
appropriate to refer only to the Firm in the objectives. Further, in the same paragraph, reasonable
assurance is a defined term and should have capitalised initials.
In the definition of the term ‘Engagement Team’ the term Personnel, which means Partners and Staff,
is replaced with the term Partners and Staff. We do not think this replacement is necessary and we
prefer the use of the term Personnel which is more concise.
The definitions Relevant Ethical Requirements and Professional Standards are included in APES 320.
CPA Australia is of the view that the definition of Professional Standards includes the Code which is
what the definition Relevant Ethical Requirements refers to, so we suggest that this latter definition is
deleted.
If you require further information on our views expressed in this submission, please contact Dr Eva
Tsahuridu, CPA Australia by email at [email protected].
Yours sincerely
Stuart Dignam
General Manager - Policy & Corporate Affairs
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