Human Resources (Ref: Para. 29)
- 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.
- 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.
- 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 emphasise 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.
- The firm may use a suitably qualified external person, for example, when internal technical and training resources are unavailable.
- 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 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.
Considerations Specific to Smaller Firms
- 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.
Assignment of Engagement Teams
Engagement Partners (Ref: Para. 30)
- 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.
Engagement Teams (Ref: Para. 31)
- 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 AUASB Standards, relevant ethical requirements, 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 judgement; and
- Understanding of the firm’s quality control policies and procedures.