Understanding the QAR Evaluation

Article excerpt

This is the second in a series of articles discussing certain conceptual observations that have been noted in quality assurance reviews (QAR). Whether you are licensed, or unlicensed, this series of articles can help you immensely in becoming a better accountant.

Last month we discussed"Why QAR?" as well as how it came into being. We also addressed reasons why you - licensed or unlicensed - would want to participate in a QAR program. You are encouraged to read these articles even if you don't submit your work for a QAR evaluation.

As was stated last month, the function of NSA's QAR Committee is to evaluate the financial statements in accordance with standards. The function of the QAR evaluation is to report deficiencies in the final statements being evaluated. This is done through checklists with commentary and supplemented with reviewer remarks.

Although a reviewer may do so on occasion, the QAR candidate should understand that it is not a function of the QAR evaluation to explain what the candidate did wrong - the manner in which he or she should've made the presentation, etc. It's like getting a traffic ticket; if you don't know why you got the traffic ticket (perhaps for passing a stopped school bus with its lights flashing and stop sign out), then you need to check the traffic laws and rules. It's the cop's job to cite the violation - not explain the law.

The QAR checklist used by the Georgia Association of Public Accountants (GAPA) cites the authority. These are not secret checklists; copies can be obtained for a nominal fee. Frequently, we hear candidates reacting to the criticism of the reviewer with statements like "Okay, this is what I need to do to pass," instead of seeing for themselves and understanding what the authorities, such as AICPA, FASB, SEC, OCBOA, GATAP pronouncements, etc., state. While the candidate may pass this evaluation, as a result of responding to the criticism, he or she fails the next evaluation due to lack of understanding of the concepts involved.

The QAR candidate should understand that no reviewer wants to be critical. A tremendous amount of additional work is required for the reviewer to write up an explanation of the deficiency. …