CPA and CA quality assurance requirements for Australian accounting firms

Are the requirements different for CPA and CA firms?

CPA Australia and CA ANZ operate their own membership and practice review programs, but the underlying Australian professional standards are substantially the same.

For firms providing tax, accounting and other non-assurance services, APES 320 sets out the requirements for the firm's system of quality management. Firms that conduct assurance engagements may also need to comply with ASQM 1 and related auditing and assurance standards.

CPA Australia states that public practice certificate holders managing a firm that offers non-assurance services must have a system of quality management that complies with APES 320.

CA ANZ states that Australian firms must establish their quality management systems under APES 320 for non-assurance engagements and ASQM 1 for assurance and related services engagements. CA ANZ members offering services to the public may be selected for a quality and practice review.

The relevant requirement therefore depends on the services performed by the firm, not simply whether the practitioner holds a CPA or CA designation.

What does APES 320 require?

APES 320 applies to non-assurance services, which commonly include taxation, accounting, business services and advisory engagements.

The standard identifies seven elements of quality management:

1. 1Governance and leadership
2. 2Professional standards
3. 3Acceptance and continuance of client relationships and specific engagements
4. 4Resources
5. 5Engagement performance
6. 6Information and communication
7. 7Monitoring and remediation

Firms must establish policies and procedures that are appropriate for their size, services, structure and operating environment. These policies and procedures must be documented, communicated and followed in practice.

A quality management manual is important, but the written document is not enough on its own. A firm must be able to demonstrate that its stated procedures operate in practice.

For example, if a firm's quality management manual requires tax return preparation work to be reviewed before lodgement, there should be evidence that the review occurred, that identified matters were considered and that the responsible practitioner completed the sign-off process.

CPA Australia quality reviews

CPA Australia's Best Practice Program assesses whether public practitioners are meeting applicable professional and regulatory requirements.

CPA Australia explains that APES 320 compliance requires documented policies and procedures covering the seven elements of quality management. It also notes that assessors may examine whether the procedures described in the firm's quality management manual can be evidenced in the firm's operations.

In practice, this means a CPA firm should be able to demonstrate:

• A current and tailored quality management manual
• Clear responsibility for quality within the firm
• Documented engagement acceptance and continuance procedures
• Appropriate staff competence, training and supervision
• Review and consultation procedures for engagements
• Evidence that tax return preparation and other engagements were reviewed
• Processes for recording and resolving identified issues
• Monitoring of whether the firm's quality procedures remain effective
• Remedial action where recurring deficiencies are identified

Taxpartna does not replace the CPA Australia Quality Management Manual Tool or the firm's quality management system. It can, however, support the practical operation of the firm's tax review procedures and provide clearer evidence that those procedures have been performed.

CA ANZ quality and practice reviews

CA ANZ's Quality and Practice Review Program monitors whether members in public practice have quality management systems that support compliance with the Code of Ethics, professional standards and legal and regulatory requirements.

During a review, CA ANZ may examine the firm's manuals and a selection of engagements and supporting documentation to assess whether appropriate quality procedures have been implemented.

CA ANZ has reported that incomplete systems of quality management and risk management frameworks are recurring findings in Australian practice reviews. This highlights the need for firms to move beyond having policies on paper and maintain evidence that their processes are operating.

For tax practices, the tax engagement documentation is an important part of that evidence. A reviewer may consider whether the documentation supports the work performed, the conclusions reached and the final output provided to the client.

Taxpartna assists by producing a structured record of automated checks, identified matters and review results for the practitioner's consideration.

How Taxpartna supports engagement performance

Engagement performance is one of the seven elements of APES 320 and is the area most directly supported by Taxpartna.

A tax return review often requires the reviewer to compare the tax return with financial statements, workpapers, elections, resolutions, agreements and other supporting documents. The reviewer must consider whether the information is consistent and whether significant positions are appropriately supported.

Taxpartna reviews the documents relating to the tax engagement as a connected set and identifies matters that may require further attention. Depending on the entity and material supplied, the platform can assist with checks involving:

• Taxable income reconciliations
• Division 7A loans and repayments
• Trust distributions and beneficiary disclosures
• Section 100A risk indicators
• Base rate entity eligibility
• Capital gains tax calculations
• Franking accounts and dividend information
• Personal services income
• Carried-forward losses
• Related-party balances
• Repairs and capital expenditure
• Financial statement and tax return consistency
• Missing or incomplete supporting documents

These checks do not determine the correct tax outcome. They direct the reviewer to areas where professional assessment may be required.

How Taxpartna supports review documentation

A quality review process should leave a clear record of what was done.

Traditional tax return reviews can be difficult to evidence when comments are spread across emails, handwritten notes, workpaper annotations and conversations between the preparer and reviewer.

Taxpartna provides a structured review output that records the checks performed and the matters identified. This can support the firm's tax engagement documentation and make the review process easier to understand.

The Taxpartna output can help demonstrate:

• The scope of automated checks applied to the tax return and supporting workpapers
• The documents considered during the review
• Inconsistencies or missing information identified
• Matters referred to the responsible practitioner
• Areas requiring further work or clarification
• The basis on which the practitioner completed the final review

The firm should retain its own evidence of how flagged matters were resolved and who approved the final engagement output. Taxpartna supports that process but does not replace the firm's sign-off procedures.

How Taxpartna supports monitoring and remediation

APES 320 requires firms to monitor their quality management system and address identified deficiencies.

Individual tax engagements can reveal broader issues within a practice. Repeated errors may indicate that a checklist is incomplete, a staff member requires training or a preparation process needs to be changed.

Consistent Taxpartna reviews can help firms identify patterns such as:

• Recurring tax reconciliation differences
• Incomplete Division 7A workpapers
• Missing trust distribution documents
• Inconsistent treatment of related-party balances
• Repeated omissions from tax workpapers
• Areas where preparers regularly require reviewer assistance

Managers and partners can use these observations to improve templates, update procedures, deliver targeted training and monitor whether the changes are effective.

This turns the tax review process into a source of practice-wide quality information rather than a series of isolated corrections.

How Taxpartna supports resources and staff development

APES 320 requires firms to consider whether they have appropriate resources to perform engagements in accordance with professional standards.

Experienced reviewers are a limited resource in many accounting firms. Taxpartna helps direct their attention to the areas of the tax engagement most likely to require professional judgment.

This can reduce time spent repeating routine comparisons while maintaining appropriate practitioner involvement.

Taxpartna results can also support staff development. Preparers receive clear explanations of identified matters, helping them understand what the reviewer is looking for and improve the quality of future work.

The platform does not replace supervision, training or technical consultation. It provides an additional quality assurance tool within the firm's broader resource and development framework.

APES 325 and accounting firm risk management

Quality management under APES 320 should be considered alongside APES 325 Risk Management for Firms.

APES 325 requires firms to establish, maintain, monitor and document a risk management framework. The framework should identify, assess and manage key organisational risks and communicate relevant risk management policies and procedures to personnel.

Tax errors, unsupported positions, incomplete workpapers and inconsistent review practices can expose a firm to financial, regulatory and reputational risk.

Taxpartna can assist with controls directed at these risks by applying consistent checks and bringing potential issues to the reviewer's attention. However, it does not address every requirement of APES 325 and is not a substitute for the firm's documented risk management framework.

How CPA and CA requirements interact with the TPB quality management system obligations

CPA Australia and CA ANZ quality management requirements operate alongside the obligations applying to registered tax practitioners under the Tax Agent Services legislation and Code of Professional Conduct.

Registered tax practitioners must establish, maintain, document and enforce a quality management system that provides reasonable confidence that they are complying with the Code.

CPA and CA practices may also be required to maintain a system of quality management under APES 320 for non-assurance services. Firms providing assurance services may have additional obligations under ASQM 1 and related assurance standards.

The frameworks overlap in areas such as governance, engagement performance, supervision, staff competence, recordkeeping, confidentiality, monitoring and remediation. However, compliance with APES 320 should not automatically be treated as satisfying every TPB obligation, and compliance with the TPB requirements should not automatically be treated as satisfying every professional body requirement.

Taxpartna can support the operation and documentation of tax return review procedures under these frameworks. It does not replace the firm's complete quality management system or guarantee compliance with any regulatory or professional standard.

For further information, see TPB quality management system requirements for Australian tax agents.

What Taxpartna does not replace

Taxpartna is a quality assurance assistance platform. It does not make a firm compliant with APES 320, ASQM 1 or APES 325 by itself.

The firm remains responsible for:

• Establishing and maintaining its system of quality management
• Setting policies that reflect its services and circumstances
• Meeting ethical and professional obligations
• Accepting and continuing appropriate client relationships
• Providing competent personnel and suitable resources
• Supervising staff and consulting on difficult matters
• Completing professional judgments and tax sign-off
• Monitoring the effectiveness of its quality procedures
• Correcting deficiencies and documenting remedial action

Taxpartna should be incorporated into the firm's existing procedures as a supporting control. The quality management manual should explain when the platform is used, who reviews its results, how flagged matters are resolved and what evidence is retained with the tax engagement documentation.

Strengthen your firm's tax quality assurance process

CPA and CA firms need more than a written quality management manual. They need repeatable processes that operate on real engagements and leave appropriate evidence.

Taxpartna gives Australian accounting firms a consistent way to review tax returns, workpapers and supporting documents before final sign-off.

It helps firms strengthen engagement performance, improve review documentation, identify recurring deficiencies and use experienced reviewer time more effectively.

Professional judgment remains with the accountant. Taxpartna helps make the supporting review more thorough, consistent and visible.

Related Taxpartna resources

• TPB quality management system requirements for Australian tax agents
• Tax quality assurance software for Australian accounting firms
• Tax return review software
• Tax workpaper review software
• Taxpartna security and data protection
• Join the Taxpartna beta

See Taxpartna support your next tax return review

Discover how Taxpartna can operate within your firm's quality management procedures.

Join the Taxpartna beta or request a demonstration using a representative tax return and supporting workpapers from your practice.

Frequently asked questions

Authoritative references

• APESB: APES 320 Quality Management for Firms that provide Non-Assurance Services
• CPA Australia: Quality Management Manual Tool
• CA ANZ: Quality and Practice Review Program
• APESB: APES 325 Risk Management for Firms
• TPB: Supervision, competency and quality management

This page provides general information about professional quality management requirements. It should not state or imply that Taxpartna guarantees compliance with APES 320, ASQM 1, APES 325 or the requirements of a professional accounting body. Firms should assess the standards and their own circumstances and obtain professional guidance where required.