Question

There was almost a complete turnover of the staff assigned to the New Century audit engagement team from 2004 to 2005. What quality control mechanisms should accounting firms have in such circumstances to ensure that a high-quality audit is performed?

Answer 1

Firstly I would like to you share the qualityes of an auditor

Qualities of an Auditor: The auditor should possess specific knowledge of accountancy, auditing, taxation, etc. which are acquired by him during the course of his theoretical education.
The auditor should also have sufficient knowledge of general principles of law of contracts, partnership; specific statutes and provisions applicable, e.g. Companies, Cooperative Societies Act, etc.; client’s nature of business and its peculiar features. Apart from the knowledge acquired by the auditor in the formal manner, the auditor should also possess
certain personal qualities such as, tact; caution; firmness; good temper; judgement; patience; clear headedness and commonsense; reliability and trust, etc.
In short, all those personal qualities required to make a good person contribute to the making of a good auditor. In addition, the auditor must have the shine of culture for attaining a great
height. He must have the highest degree of integrity backed by adequate independence.

Basic principles governing an audit are integrity, objectivity, independence, confidentiality,ski skills and competencies, planning, and audit evidence

Some of the Quality control measures are

(1) Integrity, objectivity and independence: The auditor should be straight forward, honest and sincere in his approach to his professional work. He should maintain an impartial
attitude and both be and appear to be free of any interest which might be regarded, whatever is actual effect, as being incompatible with integrity and objectivity.
(2) Confidentiality: The auditor should respect the confidentiality of information acquired in the course of his work and should not disclose any such information to a third party without specific authority or unless there is a legal or professional duty to disclose.
(3) Skills and Competence: The audit should be performed and the report prepared with due professional care by persons who have adequate training, experience and competence in
auditing. The auditor requires specialised skills and competence along with a continuing awareness of developments including pronouncements of the avcaccount body on accounting and auditing matters, and relevant regulations and statutory requirements.
(3) Work performed by others: When the auditor delegates work to assistants or uses work performed by other auditors and experts, he continues to be responsible for forming and
expressing his opinion on the financial information.