Day: July 8, 2022

ISQC 1: Acceptance and Continuance of Client Relationships and Specific Engagements
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客户关系和具体业务的接受与保持
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Para 26

The firm shall establish policies and procedures for the acceptance and continuance of client relationships and specific engagements, designed to provide the firm with reasonable assurance that it will only undertake or continue relationships and engagements where the firm:
1. Is competent to perform the engagement and has the capabilities, including time and resources, to do so; (Ref: Para. A18, A23)
2. Can comply with relevant ethical requirements; and
3. Has considered the integrity of the client, and does not have information that would lead it to conclude that the client lacks integrity. (Ref: Para. A19–A20, A23)
会计师事务所应当制定有关客户关系和具体业务接受与保持的政策和程序，以合理保证只有在下列情况下，才能接受或保持客户关系和具体业务：
1. 能够胜任该项业务，并具有执行业务的素质、时间和资源；（参见：第A18，A23 段）
2. 能够遵守相关职业道德要求；
3. 已考虑客户的诚信，没有信息表明客户缺乏诚信。（参见：第 A19－A20， A23 段）
Para 27

Such policies and procedures shall require:
1. The firm to obtain such information as it considers necessary in the circumstances before accepting an engagement with a new client when deciding whether to continue an existing engagement and when considering acceptance of a new engagement with an existing client. (Ref: Para. A21, A23)
2. If a potential conflict of interest is identified in accepting an engagement from a new or an existing client, the firm to determine whether it is appropriate to accept the engagement.
3. If issues have been identified, and the firm decides to accept or continue the client relationship or a specific engagement, the firm to document how the issues were resolved.
这些政策和程序应当要求：
1. 在接受新客户的业务前，或决定是否保持现有业务及考虑接受现有客户的新业务时，会计师事务所根据具体情况获取必要信息；（参见：第 A21，A23段）
2. 在接受新客户或现有客户的新业务时，如果识别出潜在的利益冲突，会计师事务所确定接受该业务是否适当；
3. 当识别出问题而又决定接受或保持客户关系或具体业务时，会计师事务所记录问题如何得到解决。
Para 28

The firm shall establish policies and procedures on continuing an engagement and the client relationship, addressing the circumstances where the firm obtains the information that would have caused it to decline the engagement had that information been available earlier. Such policies and procedures shall include consideration of:
1. The professional and legal responsibilities that apply to the circumstances, including whether there is a requirement for the firm to report to the person or persons who made the appointment or, in some cases, to regulatory authorities; and
2. The possibility of withdrawing from the engagement or from both the engagement and the client relationship. (Ref: Para. A22–A23)
如果会计师事务所在接受业务后获知某项信息，而该信息若在接受业务前获知，可能导致会计师事务所拒绝该项业务，会计师事务所应当针对这种情况制定保持具体业务和客户关系的政策和程序。这些政策和程序应当包括考虑：
1. 适用于这种情况的职业责任和法律责任，包括是否要求会计师事务所向委托人报告或在某些情况下向监管机构报告；
2. 解除业务约定，或同时解除业务约定和客户关系的可能性。（参见：第A22－A23 段）
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Competence, Capabilities, and Resources (Ref: Para. 26(a))
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胜任能力、素质和资源（参见：第 26 段第（a）项）
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Para A18

Consideration of whether the firm has the competence, capabilities, and resources to undertake a new engagement from a new or an existing client involves reviewing the specific requirements of the engagement and the existing partner and staff profiles at all relevant levels, including whether:
- Firm personnel have knowledge of relevant industries or subject matters;
- Firm personnel have experience with relevant regulatory or reporting requirements, or the ability to gain the necessary skills and knowledge effectively;
- The firm has sufficient personnel with the necessary competence and capabilities;
- Experts are available if needed;
- Individuals meeting the criteria and eligibility requirements to perform engagement quality control review are available, where applicable; and
- The firm is able to complete the engagement within the reporting deadline.
在考虑是否具有接受新客户或现有客户的新业务所需的胜任能力、素质和资源时，会计师事务所需要评价新业务的特定要求及所有相关级别的现有合伙人和员工的基本情况，还包括：
- 会计师事务所人员是否熟悉相关行业或业务对象；
- 会计师事务所人员是否了解相关监管要求或报告要求，或具备有效获取必要技能和知识的能力；
- 会计师事务所是否拥有足够的具有必要胜任能力和素质的人员；
- 需要时是否能够得到专家的帮助；
- 如果需要实施项目质量控制覆核，是否具备符合标准和资格要求的项目质量控制覆核人员；
- 会计师事务所是否能够在提交报告的最后期限内完成业务。
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The integrity of Client (Ref: Para. 26(c)) 
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客户的诚信（参见：第 26 段第（c）项） 
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Para A19

With regard to the integrity of a client, matters to consider include, for example:
- The identity and business reputation of the client’s principal owners, key management, and those charged with its governance.
- The nature of the client’s operations, including its business practices.
- Information concerning the attitude of the client’s principal owners, key management and those charged with its governance towards such matters as an aggressive interpretation of accounting standards and the internal control environment.
- Whether the client is aggressively concerned with maintaining the firm’s fees as low as possible.
- Indications of an inappropriate limitation in the scope of work.
- Indications that the client might be involved in money laundering or other criminal activities.
- The reasons for the proposed appointment of the firm and non-reappointment of the previous firm.
- The identity and business reputation of related parties.
The extent of knowledge a firm will have regarding the integrity of a client will generally grow within the context of an ongoing relationship with that client.

针对客户的诚信，会计师事务所考虑的事项包括：
- 客户主要股东、关键管理人员及治理层的身份和商业信誉；
- 客户的经营性质，包括其业务；
- 客户主要股东、关键管理人员及治理层对有关会计准则的偏激解释及内部控制环境的态度；
- 客户是否过分考虑将事务所的收费维持在尽可能低的水准；
- 工作范围受到不适当限制的迹象；
- 客户可能涉嫌洗钱或其他刑事犯罪活动的迹象；
- 变更会计师事务所的理由；
- 关联方的身份和商业信誉。
- 会计师事务所对客户诚信的了解程度，通常随着与客户关系的持续发展而加深。
Para A20

Sources of information on such matters obtained by the firm may include the following:
- Communications with existing or previous providers of professional accountancy services to the client in accordance with relevant ethical requirements, and discussions with other third parties.
- Inquiry of other firm personnel or third parties such as bankers, legal counsel and industry peers.
- Background searches of relevant databases.
会计师事务所可以通过下列途径，获取与客户诚信相关的信息：
- 按照相关职业道德要求的规定，与为客户提供专业会计服务的现任或前任人员进行沟通，并与其他第三方进行讨论；
- 询问会计师事务所其他人员或金融机构、法律顾问及客户的同行等第三方；
- 从相关资料库中搜索客户的背景信息。
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Continuance of Client Relationship (Ref: Para. 27(a)) 
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客户关系的保持（参见：第 27 段第（a）项） 
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Para A21

Deciding whether to continue a client relationship includes consideration of significant matters that have arisen during the current or previous engagements and their implications for continuing the relationship. For example, a client may have started to expand its business operations into an area where the firm does not possess the necessary expertise.

确定是否保持客户关系时，会计师事务所需要考虑本期或以前执行业务时发现的重大事项，及其对保持客户关系可能产生的影响。例如，客户可能开始将其经营活动拓展到会计师事务所并不具备专长的领域。
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Withdrawal (Ref: Para. 28)  
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解除业务约定（参见：第 28 段）
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Para A22

Policies and procedures on withdrawal from an engagement or from both the engagement and the client relationship address issues that include the following:
- Discuss with the appropriate level of the client’s management and those charged with its governance the appropriate action that the firm might take based on the relevant facts and circumstances.
- If the firm determines that it is appropriate to withdraw, discuss with the appropriate level of the client’s management and those charged with its governance withdrawal from the engagement or from both the engagement and the client relationship, and the reasons for the withdrawal.
- Considering whether there is a professional, legal or regulatory requirement for the firm to remain in place, or for the firm to report the withdrawal from the engagement, or from both the engagement and the client relationship, together with the reasons for the withdrawal, to regulatory authorities.
- Documenting significant matters, consultations, conclusions and the basis for the conclusions.
会计师事务所针对解除业务约定或同时解除业务约定和客户关系制定的政策和程序可应对下列问题：
- 与客户适当层级的管理层和治理层讨论会计师事务所根据相关事实和情况可能采取的适当行动；
- 如果确定解除业务约定或同时解除业务约定和客户关系是适当的，会计师事务所可就解除的情况及原因，与客户适当层级的管理层和治理层讨论；
- 考虑是否存在职业或法律法规的规定，要求会计师事务所保持现有客户关系，或向监管机构报告解除业务约定或同时解除业务约定和客户关系的情况及原因；
- 记录重大事项及其咨询情况、咨询结论和得出结论的依据。
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Considerations Specific to Public Sector Audit Organizations (Ref: Para. 26–28) 
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对公共部门实体审计机构的特殊考虑（参见：第 26－28 段）
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Para A23

In the public sector, auditors may be appointed in accordance with statutory procedures. Accordingly, certain of the requirements and considerations regarding the acceptance and continuance of client relationships and specific engagements as set out in paragraphs 26–28 and A18–A22 may not be relevant.

Nonetheless, establishing policies and procedures as described may provide valuable information to public sector auditors in performing risk assessments and in carrying out reporting responsibilities.

公共部门实体可能按照法定程序委派审计人员。因此，第 26－28 段及第 A18－A22 段中规定的有关客户关系和具体业务的接受与保持的某些要求和考虑可能不相关。

尽管如此，制定本国际质量控制准则规定的政策和程序可以为公共部门实体审计师在进行风险评估和履行报告责任时提供有价值的信息。
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ISQC 1: Human Resources
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人力资源
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Para 29

The firm shall establish policies and procedures designed to provide it with reasonable assurance that it has sufficient personnel with the competence, capabilities, and commitment to ethical principles necessary to:
1. Perform engagements in accordance with professional standards and applicable legal and regulatory requirements; and
2. Enable the firm or engagement partners to issue reports that are appropriate in the circumstances. (Ref: Para. A24–A29)
会计师事务所应当制定政策和程序，合理保证拥有足够的具有胜任能力和必要素质并承诺遵守职业道德原则的人员，以：
1. 按照职业准则和适用的法律法规的规定执行业务；
2. 使会计师事务所或项目合伙人能够出具适合具体情况的报告。（参见：第 A24－A29 段）
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Assignment of Engagement Teams 
项目组的委派 
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Para 30

The firm shall assign responsibility for each engagement to an engagement partner and shall establish policies and procedures requiring that:
1. The identity and role of the engagement partner are communicated to key members of client management and those charged with governance;
2. The engagement partner has the appropriate competence, capabilities, and authority to perform the role; and
3. The responsibilities of the engagement partner are clearly defined and communicated to that partner. (Ref: Para. A30)
会计师事务所应当对每项业务委派一名项目合伙人，并应当制定政策和程序，明确下列要求：
1. 将项目合伙人的身份和作用告知客户管理层和治理层的关键成员；
2. 项目合伙人具有履行职责所要求的适当胜任能力、必要素质和权限；
3. 清楚界定项目合伙人的职责，并告知该项目合伙人。（参见：第 A30段）
Para 31

The firm shall also establish policies and procedures to assign appropriate personnel with the necessary competence and capabilities to:
1. Perform engagements in accordance with professional standards and applicable legal and regulatory requirements; and
2. Enable the firm or engagement partners to issue reports that are appropriate in the circumstances. (Ref: Para. A31)
会计师事务所还应当制定政策和程序，委派具有必要胜任能力和素质的适当人员，以：
1. 按照职业准则和适用的法律法规的规定执行业务；
2. 使会计师事务所或项目合伙人能够出具适合具体情况的报告。（参见：第 A31 段）
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Human Resources (Ref: Para. 29) 
人力資源（參見：第 29 段）
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A24.

Personnel issues relevant to the firm’s policies and procedures related to human resources include, for example:
- Recruitment.
- Performance evaluation.
- Capabilities, including time to perform assignments.
- Competence.
- Career development.
- Promotion.
- Compensation.
- The estimation of personnel needs.
Effective recruitment processes and procedures help the firm select individuals of integrity who have the capacity to develop the competence and capabilities necessary to perform the firm’s work and possess the appropriate characteristics to enable them to perform competently.

与会计师事务所人力资源政策和程序相关的人事问题包括：
- 招聘；
- 业绩评价；
- 人员素质，包括完成分派任务的时间；
- 胜任能力；
- 职业发展；
- 晋升；
- 薪酬；
- 人员需求预测。
有效的招聘过程和程序有助于会计师事务所选择正直的、通过发展能够具备执行业务所需的胜任能力和必要素质，并具备胜任工作所需的适当特征的人员。

A25

Competence can be developed through a variety of methods, including the following:
- Professional education.
- Continuing professional development, including training.
- Work experience.
- Coaching by more experienced staff, for example, other members of the engagement team.
- Independence education for personnel who are required to be independent.
通过下列途径可以提高人员的胜任能力：
- 职业教育；
- 持续职业发展，包括培训；
- 工作经验；
- 由经验更丰富的员工（如项目组的其他成员）提供辅导；
- 针对受独立性要求约束的人员进行独立性教育。
A26

The continuing competence of the firm’s personnel depends to a significant extent on an appropriate level of continuing professional development so that personnel maintain their knowledge and capabilities.

Effective policies and procedures emphasize the need for continuing training for all levels of firm personnel and provide the necessary training resources and assistance to enable personnel to develop and maintain the required competence and capabilities.

会计师事务所人员的持续胜任能力在很大程度上取决于持续职业发展的适当水准，以使会计师事务所人员保持其知识和素质。

有效的政策和程序强调对会计师事务所各级人员进行继续培训的必要性，并提供必要的培训资源和帮助，以使会计师事务所人员能够发展和保持必要的胜任能力和素质。

A27

The firm may use a suitably qualified external person, for example, when internal technical and training resources are unavailable.

会计师事务所可利用具有适当资格的外部人员，例如，当会计师事务所内部不具备技术和培训资源时。

A28

Performance evaluation, compensation and promotion procedures give due recognition and reward to the development and maintenance of competence and commitment to ethical principles. Steps a firm may take in developing and maintaining competence and commitment to ethical principles include:
- Making personnel aware of the firm’s expectations regarding performance and ethical principles;
- Providing personnel with an evaluation of, and counselling on, performance, progress and career development; and
- Helping personnel understand that advancement to positions of greater responsibility depends, among other things, upon performance quality and adherence to ethical principles, and that failure to comply with the firm’s policies and procedures may result in disciplinary action.
业绩评价、薪酬和晋升程序需要对发展和保持胜任能力并遵守职业道德原则的行为给予应有的肯定和奖励。会计师事务所在发展和保持胜任能力并遵守职业道德原则方面可以采取的步骤包括：
- 使会计师事务所人员知晓会计师事务所对业绩和遵守职业道德原则的期望；
- 向会计师事务所人员提供业绩、晋升和职业发展方面的评价和咨询；
- 帮助会计师事务所人员理解晋升更高职位取决于业务质量及遵守职业道德原则，而不遵守会计师事务所的政策和程序可能受到惩戒。
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Considerations Specific to Smaller Firms  
对小型会计师事务所的特殊考虑
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A29

The size and circumstances of the firm will influence the structure of the firm’s performance evaluation process. Smaller firms, in particular, may employ less formal methods of evaluating the performance of their personnel.

会计师事务所的规模和具体情况将影响业绩评价过程。小型会计师事务所尤其可能运用不太正式的方法评价其人员的业绩。委派项目组
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Assignment of Engagement Teams Engagement Partners (Ref: Para. 30)  
项目合伙人（参见：第 30 段）
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A30

Policies and procedures may include systems to monitor the workload and availability of engagement partners so as to enable these individuals to have sufficient time to adequately discharge their responsibilities.

会计师事务所的政策和程序可能包括对项目合伙人的工作量及可供调配的时间进行监控，以使项目合伙人有足够的时间恰当履行职责。
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Engagement Teams (Ref: Para. 31)  
项目组（参见：第 31 段）
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A31

The firm’s assignment of engagement teams and the determination of the level of supervision required, include, for example, consideration of the engagement team’s:
- Understanding of, and practical experience with, engagements of a similar nature and complexity through appropriate training and participation;
- Understanding of professional standards and applicable legal and regulatory requirements;
- Technical knowledge and expertise, including knowledge of relevant information technology;
- Knowledge of relevant industries in which the clients operate;
- Ability to apply professional judgment; and
- Understanding of the firm’s quality control policies and procedures.
A31. 在委派项目组及确定所需的监督程度时，会计师事务所可考虑项目组的下列方面：
- 通过适当的培训和参与业务，获取执行类似性质和复杂程度业务的知识和实务经验；
- 理解职业准则和适用的法律法规的规定；
- 具有的技术知识和专长，包括相关的信息技术知识；
- 对客户所处行业的了解；
- 运用职业判断的能力；
- 对会计师事务所质量控制政策和程序的了解。
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MFRS 116 Amendments – what does this mean for your accounts?
International Accounting Standards Board

The International Accounting Standards Board (IASB) published an amendment to IAS 16 in May 2020, and it became effective for accounting periods that begin on or after January 1, 2022.

Malaysian Accounting Standards Board

In the meantime, on June 5, 2020, the Malaysian Accounting Standards Board (hereafter referred to as “MASB”) released amendments to MFRS 116 Property, Plant and Equipment. The amendments concern the proceeds that an entity receives before the time when that entity intends to use an asset.

The amendments will become effective for any financial year that begins on or after January 1 2022. However, early adoption is allowed by the MASB.

The amendments to MFRS 116 restrict an entity from deducting from the cost of an item of PPE any proceeds from selling items generated while making that item of PPE available for its intended use, such as during a necessary testing or commissioning period. Consequently, an entity would record the proceeds of such sales directly in its profit or loss.

The prior treatment required that any costs incurred, as well as revenue recognised up to the point that the asset is ready for use, be capitalised or in the case of revenue, offset against the cost of an asset.

The amendments will most impact the extractive and petrochemical industries.

Summary: What’s important to know
- Proceeds from the sale of the items produced by the property, plant, and equipment (PPE) before its intended use are no longer deducted from the cost of PPE.
- A rise in the costs of a company’s assets, as shown in its financial statements.
- Potential tax consequences of new recognition and presentation of profit
Illustration

It is common practice to carry out a series of tasks after acquiring a particular asset to be able to use that asset in the manner that is wanted.

For instance, you are required to install the asset or carry out the testing procedures.

Additionally, there are occasions where it is possible to produce certain goods while carrying out these procedures.

Prior to the adoption of the new amendment, it was not entirely obvious what should be done with the proceeds obtained from the sale of these goods that were produced while the asset was not put into normal operations.

Because of this, some entities recorded these proceeds as revenue in their income statement, while others subtracted the sale proceeds from the cost of an asset. This distinction is because some entities recognised these proceeds as income while others did not.

After the new amendment, the second alternative is no longer permissible, and sales proceeds can only be recognised in profit or loss.

Example

ABC Company has acquired a machine to facilitate the production of the product glove.

The buying price is RM 10,000, including the installation cost and other directly attributable expenses.

Testing must be performed to ensure that the machine satisfies the safety conditions before it can be put into normal operation.

During the course of the testing that the ABC Company does on the machine, the machine produces a total of 100 units of gloves, each of which is put up for sale at a price of RM 3 per unit.
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How do you account for the revenue from selling one hundred of your products? 

Can you tell me What is the acquisition cost of a machine now?
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In the past, ABC Company was able to reduce the cost of the machine by using the proceeds it made from the sale of the products it produced.

As a result, the acquisition cost of the machine would be RM 9,700, equivalent to RM 10,000 less RM 300 (RM3 * 100).

However, this is no longer permitted due to a recent amendment to MFRS 116.

Instead, ABC Company must record the revenue in its income statement:

The cost to acquire the machine is then RM 10,000 (no deduction of proceeds from the sale).

What can you do now?

The difficulties that may arise from implementing the amendments can be complex. The process of allocating costs can be challenging and requires much estimation and judgement. You ought to initiate your preparations for this challenge right now.

Make sure that you have a clear awareness of which facts are required, which can only come from in-depth knowledge of the applicable accounting standards.

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July 8, 2022