Question

Critically discuss the elements of Quality Control with reference to both ISQC 1 Quality control for firms that perform audits and reviews of financial statements, and other assurance and related services engagements, and ISA 220 Quality control for an audit of financial statements.

Answer 1

The elements of Quality controls with reference to ISQC 1 are:

• Leadership duties for the quality within the firm. It implies the focus on maintaining the internal cultural of quality intact within the firm.
• Ethical requirements in place. the controls emphasize on maintaining the ethical requirements are in compliance.
• Client relationships and specific engagements. it porvides guidance on the norms which the firm should have and continue thier relationship with the clients.
• It provides guidance on maintaining the human resources of the firm.
• Monitoring the firms quality control to be relevent, adequate and updated.

ISA 220 Quality control for an audit of financial statements.

• The main objective of ISA 220 is that the auditor should ensure that quality controls are implemented at the engagement leveland the audit compliance of the professional standards is maintained.
• The key elements of the ISA 220 are :
  • Independence
  • Acceptance and continuance of client relationships
  • Assignment of engagement teams
  • Engagement performance direction
  • Reviews
  • Consultation
  • Engagement Quality control review