23. Quality Control

Question 1

What is the objective of Quality control and what are the elements for which policies are included?

Answer 1

Objective:
audit engagement is performed as per legal and professional standards.
audit report is issued as appropriate in the circumstances.
The system of QC includes policies for the following procedures:
Leadership, Ethics, Engagement acceptance and continuance procedures, Human resource.

Question 2

Who is responsible for quality on audits?

Answer 2

The engagement partner shall take responsibility for the overall quality and quantity control procedures on each audit engagement.

Question 3

Write a note on assignment of engagement teams?

Answer 3

The engagement partner shall ensure that engagement team and auditor’s expert has competence and capability to perform the engagement to ensure that:
audit engagement is performed as per legal and professional standards
audit report is issued as appropriate in circumstances.

Question 4

Explain direction, supervision and review in QC?

Answer 4

Engagement partner shall take the responsibility of direction, supervision and review of audit as per ISAs. On or before the auditor’s report, engagement partner shall be satisfied that sufficient appropriate audit evidence has been obtained and report is appropriate.

Question 5

What is Consultation and Difference of opinion in QC?

Answer 5

Consultation: Engagement partner shall take responsibility that engagement team undertakes consultation, be satisfied that appropriate consultation is obtained within the engagement team with others within the firm or outside the firm and nature of consultation and conclusion are documented and are agreed between parties.
Difference of Opinion: If difference arises, the engagement team shall follow the firm’s policies and procedures to resolve difference of opinion.

Question 6

Comment on monitoring in QC?

Answer 6

Engagement partner shall review the latest results of firm’s monitoring process and whether any deficiencies noted may affect the current audit engagement.

Question 7

What should the auditor include in documentation in QC?

Answer 7

1. Conclusions on compliance with independent requirements.
2. Issues identified with respect to compliance with relevant ethical requirements and how they were resolved.
3. Conclusions regarding acceptance and continuance.
4. Nature and scope of consultations undertaken during the course of audit engagement.

Question 8

What should the QC Reviewer include in documentation in QC?

Answer 8

1. Procedures required by the firm’s policies on QCR have been performed.
2. The QCR has been completed on or before the date of auditor’s report.
3. Reviewer is not aware of any unresolved matters that would cause the reviewer to believe that significant judgements the engagement team made and conclusions it reached were not appropriate.