Depending on the severity of non-compliance with the professional standards, as well as the public accountant's PMP history, the PAOC may order the public accountant to undertake remedial actions, or it may impose other orders.

The main purpose of most PAOC orders is to require the public accountant to improve their audit work in line with the professional standards.

PMP Orders

A PAOC order resulting from a PMP inspection may include the following:

Attendance of Training Courses The public accountant shall attend structured1 training courses, which may be conducted by accountancy professional bodies, external course providers or via in-house training conducted by the firm.

Peer Review

The public accountant shall have at least 3 of his/her audit engagements reviewed by a suitably qualified person (“Peer Reviewer”) who can mentor and advise the public accountant accordingly. This review may occur either before or after the audit has been completed and signed.

Hot Review

The public accountant shall have a certain number of audit engagements reviewed by another public accountant (“Hot Reviewer”) before he or she signs the audit reports. 

Restriction

The PAOC may restrict the public accountant from the auditing and reporting of financial statements of certain entities, including but not limited to:

  • auditing and reporting on financial statements of any entity, for which an audit is required by written law;
  • auditing and reporting on financial statements of
    1. any public company2 that is not dormant3
    2. any private company4 that is not dormant and not an exempt private company ("EPC"); and
    3. any EPC that is not dormant and has annual revenue of more than $10 million;
  • auditing and reporting on financial statements of all public interest entities5;
  • auditing and reporting on financial statements of entities in specific industries.              
Sending Inspection Findings to those charged with governance  Where the outcome of a PMP on a selected audit is "Not satisfactory" and the audit is that of a public interest entity5 (PIE), the PAOC may order that the public accountant send the findings to those charged with governance of the audited PIE. This serves to inform the audited PIE of the inspection findings and allows the audited PIE to work with its auditor to remediate the inspection findings which may have implications on its financial statements and/or audit. 

Suspension

If the PAOC finds serious and/or repetitive instances of non-compliance, and the PAOC determines that it is contrary to the interest of the public or the public accounting profession for the public accountant to continue in practice, the PAOC may suspend the public accountant.

While the public accountant remains suspended, he or she shall be deemed not to be registered as a public accountant but immediately upon the expiry of his or her period of suspension, his or her rights and privileges as a public accountant shall forthwith be revived, provided that he or she fulfils all other requirements, such as Continuing Professional Education and has a valid certificate of registration.

Cancellation

Cancellation of registration happens when the PAOC finds non-compliance with professional standards to be extremely serious and/or repetitive, and when the PAOC’s opinion is that it is contrary to the interest of the public or the public accounting profession for the public accountant to continue in practice.

1 As defined in Practice Direction No. 1 of 2022
2 As defined in section 4(1) of the Companies Act
3 As defined in section 205B(2) of the Companies Act
4 As defined in section 4(1) of the Companies Act
5 The phrase “public interest entities” as used here has the same meaning as defined in the Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities


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