Quality Control Standards

Question 1

Do the standard quality control standards apply to the whole portfolio or each engagement?

Answer 1

The portfolio

Question 2

Do quality control standards apply to tax or consulting services?

Answer 2

No because it is not for public interest

Question 3

Quality control involve reasonable assurance regarding?

Answer 3

Compliance with professional standards and regulatory requirements

The reports issued are appropriate

Question 4

What are the 6 elements of quality control system?

Answer 4

1) Leadership responsibilities- “Tone at the top”
2) Relevant ethical requirements- Especially related to independence issues
3) Acceptance and continuance of clients and specific engagements- be careful of who you take on as a client. Only those where management have integrity
4) Human resources (recruiting & hiring, assignments, professional development & continuing education, and evaluation, proposition, and compensation issues)
5) Engagement performance- consolation with others, compliance with policies/standards
6) Monitoring- Quality control is not a one-time issue; it requires continuous assessment over time

Question 5

Who has the responsibility of quality control at the engagement level?

Answer 5

The engagement partner

Question 6

Define engagement quality review?

Answer 6

Process to provide an objective evaluation BEORE the report is issued for the decisions made and conclusions reached.

Question 7

Are engagement quality reviews required for all engagements?

Answer 7

No, only when the firm thinks it is reasonable under certain circumstances

Question 8

What should the auditor document?

Answer 8

1) Issues including independence matters
2) Conclusions about acceptance/continuance of client relationships
3) Issues and conclusions related to consultations

The quality control reviewer:

• The required procedures have been performed
• The date the review was completed
• The reviewer is not aware of any unresolved issues