ISA 220 - Quality Control for an Audit Of Financial Statements

Question 1

ISA 220: Quality Control for an Audit of Financial Statements.

Answer 1

> Audit to be conducted as per:
- Standards on Auditing and
- Legal Requirements.

> Give appropriate Audit Report.

If the above 3 are abided by, then the Audit Quality is good.

Question 2

ISA 220: Procedures to Ensure Quality

Answer 2

• This Standard gives two sets of Procedures.
• One set of Procedures for the Engagement Partner
• One set of Procedures for the Quality Control Reviewer.
• Engagement Partner Quality Control:
• Ensure Quality at: Planning, Performance, and Reporting.
• Check Engagement team to ensure:
• It’s working as per Professional Standards.
• It’s adhering Quality Control Policies.
• That they are conducting an Audit and give Opinion without fear.
• Provide Consultancy for significant matters and ensure it is resolved appropriately.
• Check Engagement team.
• Check Independence of Engagement Partner and the entire Audit Team.
• Responsibility in case of Acceptance or Continuation of Audit.
• Appropriate team is assigned to conduct Audit.
• Direct, supervise, and recheck the work of the Engagement team.
• Quality Control Reviewer Procedures:
• Quality Control Review is conducted by the firm to ensure Quality of Audit.
• A review team is formed to Check the work performed by Engagement Partner to ensure the Quality in it.
• A Quality Review is carried by the other senior Partners on the Engagement Partner’s work.
• Communicate with Engagement Partner on how the work is conducted and resolved.
• Review the Financial Statement other Documents to check how the conclusion is arrived at.
• Check the proposed Audit Report.
• Quality Control Review is mandatory for a Listed Company.
• Never sign the Audit Report before completion of Review.

Question 3

ISA 220: Monitoring Procedure:

Answer 3

> Carried by the firm.
To ensure the Policy set up are relevant, operating and effectively in process.
Engagement Partner to ensure any deficiency in process will impact his Engagement or not.

Question 4

ISA 220: Documentation Required:

Answer 4

Documentation Maintained by Quality Control Reviewer:
>Documents in relation to Procedures followed for the Review.
> Assure that the review is started and completed before the date of Auditors Report.
> No matter is unresolved which is significant.

Documentation Maintained by Auditor/ Engagement Partner:
> Documents in relation to Ethical requirements, Independence, Conclusion drawn.
> Documents for Acceptance/ Continuation of Client relationship.