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Interpretation and Application of International Standards on Auditing by Steven Collings

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ISQC 1 ‘QUALITY CONTROL FOR FIRMS THAT PERFORM AUDITS AND REVIEWS OF FINANCIAL STATEMENTS, AND OTHER ASSURANCE AND RELATED SERVICES ENGAGEMENTS’

The purpose of ISQC 1 ‘Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements’ is to outline the responsibilities of the practising firm of auditors in respect of its quality control procedures. Paragraph 11 of ISQC 1 states:

The objective of the firm is to establish and maintain a system of quality control to provide it with reasonable assurance that:

a. The firm and its personnel comply with professional standards and applicable legal and regulatory requirements; and

b. Reports issued by the firm or engagement partners are appropriate in the circumstances.

ISQC 1 covers the following issues relating to quality control:

  • Leadership responsibilities for quality control within the audit firm.
  • Relevant ethical requirements.
  • Acceptance and continuance of client relationships and specific engagements.
  • Human resources.
  • Engagement performance.
  • Monitoring.

The firm should have documented its quality control procedures in accordance with ISQC 1 requirements.

LEADERSHIP RESPONSIBILITIES FOR QUALITY CONTROL WITHIN THE AUDIT FIRM

It is imperative that a firm of practising auditors has a high standard of quality control to ensure compliance with International Standards on Auditing and to ensure that audit work is conducted to a high standard. The audit firm should ...

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