Other Audit: Quality control Flashcards
How to ensure good QC
Quality of work over commercial considerations
Appropriate procedures in place and staff knows about them and adheres them
Training & continuing professional development
Performance assessment and feedback/reward/discipline on a timely basis
Appropriate delegation
Direction/review/supervision by a sufficiently senior staff member
Direction/supervision/review
Direction: engagement partner responsible for ensuring team understands:
• client business
• risks
• audit plan
Supervision: engagement partner delegates to manager
• process tracking
• review of juniors
• feedback to juniors
Review: manager, engagement partner or another partner
• work in accordance with ISAs/Ethics
• sufficient evidence obtained to support conclusions
• documentation
Review: listed client - engagement quality control review (another partner)
• significant risks and procedures to address risks
• significant judgements and conclusions
• misstatements
• evaluation of independence
Monitoring to ensure quality controls procedures are working
- cold reviews after report signed by senior staff not involved in audit
- compliance with ISAs/ES
- training, new policies
Auditor legal liability
Auditor could be sued by shareholders if gives wrong opinion, as well as lose clients and reputation
Must have professional indemnity insurance
Auditor can seek to limit liability if:
• approved by client shareholders
• only covers one financial year
• fair and reasonable
