What is QAR Program?
The Quality Assurance Review (QAR ) Program is a step for improving the credibility and reliability of financial statements audited by Philippine auditors, be it done by an individual CPA practitioner or by a large CPA firm. The program was introduced by the Board of Accountancy (BOA) in accordance with the practice of CPAs around the world that is becoming a standard. Aside from that, according to BOA, that it is their legal obligation under the Accountancy law to ensure compliance with the accounting and auditing standards and practices. Anyhow, the definition of QAR, for further clarification, are described below which I came across from the QAR ExeCom classificatory letter.
(a) Definition under the Implementing Rules and Regulations of the Philippine Accountancy Act of 2004, RA9298. Quality Review is a study, appraisal or review by the Board or its duly authorized representatives, of the quality of audit of financial statements through a review of the quality control measures instituted by an Individual CPA, Firm or Partnership of CPAs engaged in the practice of public accountancy to ascertain his/her/its compliance with prescribed professional, ethical and technical standards of public practice.
(b) Definition under International Federation of Accountants (IFAC) Statement of Membership Obligations No. 1 on Quality Assurance: Quality Assurance Review – a review to determine whether the member (i) is subject to(partner) or has (firm) an adequate system of quality control, (ii) is in compliance with such system, and (iii) has adhered to professional standards and regulatory and legal requirements in performing engagements.
Surprisingly, according to BOA, the QAR orientation they’ve conducted last year (2010) posted positive reception. However, after the orientation, in a number of instances, the QAR program has been questioned by CPAs and PICPA and even its validity. After that, the QAR-tipuneros/QAR-response was born. QAR-response is a group of CPAs, mostly from PICPA, whose position is that QAR is an excellent program but what was wrong with it is the structure and implementation specially for the small and individual practitioners. Like for example, QAR is a pre-requisite for BOA accreditation and renewal. That QAR is not cheap, its totally expensive.
Anyhow, QAR under BOA Resolution No.88 and 23 will not be implemented soon after RTC branch 128 issued a preliminary injunction. Meaning, you can apply for BOA accreditation either renewal or otherwise without the QAR.