Post-Audit Responsibilities & Audit Quality Control Flashcards
How long after the audit report is released must audit documentation for an audit of an issuer be archived?
Within 45 days
How long after the audit report is released must audit documentation for an audit of a non-issuer be archived?
Within 60 days
What documents must be retained as audit documentation?
A complete set of documentation that supports the auditor’s findings, opinions, and conclusions.
All memos, working papers, correspondences, data, and other documents that relate to significant audit matters.
What is the retention period for audit documentation for an audit of an issuer?
7 years from the audit report release date
What is the retention period for audit documentation for an audit of a non-issuer?
5 years from the audit report release date
What are the components of a post-audit meeting with the client?
Opening and setting the agenda
Discussion of audit findings, including: areas of good practice observed, identified weaknesses or areas of concern, any adjustments to the FS, material misstatements or significant risks that were identified, any disagreements or issues that arose during the audit and how they were resolved.
Client’s feedback
Planning for the next audit
Feedback on audit team
Documentation
What is audit quality control?
Engagement and firm level controls
Compliance with standards and regulations
Ensures that the reports produced by the firm are suitable
Apply to all engagements undertaken by the firm
Does a breach in quality control equate non-compliance?
No
What are the elements of a quality control system?
Tone at the top
Ethical requirements
Policies for client acceptance and client continuance
Human resources
Monitoring
Engagement performance
What is tone at the top?
Establish a culture in the organization that quality is foremost when performing an engagement
Policies should require the firm’s leadership to take ultimate responsibility for the system of quality control
What are the ethical requirements of a quality control system?
Establish procedures to ensure that independence is maintained when required
Communicate independence requirements to firm employees
Obtain annual confirmations of compliance with independence rules from firm personnel
Identify and evaluate problems and circumstances that create threats to independence and take appropriate actions to reduce that threat
What is needed for policies for client acceptance/continuance?
Establish policies that ensure a client will be accepted or continued only when the firm:
Is competent and has capabilities and time and resources to complete the engagement
Can comply with legal and ethical requirements
Has considered client integrity
What is the role of human resources in quality control?
Establish policies that ensure the firm has sufficient personnel with appropriate skills, capabilities, and competence.
Personnel selected for advancement should have the necessary qualifications.
Ensure professional development of employees
What is monitoring?
Establish a monitoring process to provide reasonable assurance that the policies/procedures relating to the system of quality control are relevant, adequate, and operating effectively.
Involves ongoing consideration and evaluation of the firm’s system of quality control.
A partner should assume responsibility for the monitoring process.
What is the engagement performance aspect of quality control?
Establish policies/procedures to provide reasonable assurance that engagements are performed in accordance with professional standards.
