AUD - Quality Control Standards Flashcards
Who is responsible for the administration of a quality control system?
May be vested in one person, but everyone shares responsibility
List the six elements of a quality control system
- Leadership responsibilities for quality within the firm.
- Relevant ethical requirements (especially independence)
- Acceptance & continuance of client relationships
- Human resources
- Engagement performance
- Monitoring
GAAS apply to each audit engagement individually, whereas the quality control standards aplly to
the collective portfolio of accounting & auditing services
Statements on Quality Control Standards are issued by
the AICPA’S Auditing Standards Board
The “relevant ethical requirements” element of a firm’s quality control system fundamentally deals with
independence requirements
Does a firm’s system of quality control need to apply to “compilation” engagements?
Yes
The System of Quality control provides
reasonable assurance that all employees comply with the firm’s standards for professional services
As part of a System of Quality Control, a firm should have policies & procedures to provide reasonable assurance that new client relationships accepted meet
appropriate risk considerations
How many elements of a firm’s quality control system are there?
Six
The AICPA Quality Control Standards require that firms providing accounting & auditing services obtain written confirmation of compliance with independence requirements from…
all appropriate personnel at least annually
The leadership element of a firm’s quality control system fundamentally involves…
The “tone at the top” with respect to internal culture regarding quality issues.
What is the purpose of a firm’s system of quality control?
To provide the firm with reasonable assurance that the firm (and it’s personnel) comply with professional standards and applicable regulatory and legal requirements and issue reports that are appropriate in the circumstances
What should a CPA firm do to comply with the AICPA’s quality control standards?
Establish policies to ensure the audit work meets applicable professional standards
What is the purpose of establishing quality control policies and procedures for deciding whether to accept or continue a client relationship?
Minimize the likelihood of associating with clients whose management lacks integrity.
The primary purpose of establishing quality control policies and procedures for deciding whether to accept a new client is to…
minimize the likelihood of association with clients whose management lacks integrity.
