Quality Control; The firm shall:

Question 1

The firm shall design a system of quality control designed to provide it with reasonable assurance that the firm and its personnel comply with ___________________________ and that reports issued by the firm or engagement partners are appropriate in the circumstances.

Answer 1

professional standards and regulatory and legal requirements

Question 2

The firm shall establish policies and procedures designed to promote an ________________ based on the recognition that quality is essential in performing engagements.

Answer 2

internal culture

Question 3

Any person or persons assigned operational responsibility for the firm’s quality control system by the ________________________ shall have sufficient and appropriate experience and ability, and the necessary authority, to assume that responsibility.

Answer 3

firm’s chief executive officer or managing board of partners

Question 4

The firm shall establish policies and procedures designed to provide it with reasonable assurance that the firm and its personnel comply with relevant ___________________.

Answer 4

relevant ethical requirements

Question 5

The firm shall establish policies and procedures for the acceptance and continuance of client relationships and specific engagements, designed to provide it with reasonable assurance that it will only undertake or continue relationships and engagements where it:

Answer 5

o Is competent to perform the engagement and has the capabilities, time, and
resources to do so; and
o Can comply with ethical requirements
o Has considered the integrity of the client and does not have information that
would lead it to conclude that the client lacks integrity.

Question 6

The firm shall establish policies and procedures designed to provide it with reasonable assurance that it has sufficient personnel with the _________________________ to ethical principles necessary:
o To perform its engagements in accordance with professional standards and
regulatory and legal requirements;
o To enable the firm or engagement partners to issue reports that are appropriate
in the circumstances.

Answer 6

capabilities, competence and commitment

Question 7

The firm’s performance__________________________ give due recognition and reward to the development and maintenance of competence and commitment to ethical principles

Answer 7

evaluation, compensation and promotion procedures

Question 7

The firm’s performance__________________________ give due recognition and reward to the development and maintenance of competence and commitment to ethical principles

Answer 7

evaluation, compensation and promotion procedures

Question 8

The firm shall assign responsibility for each engagement to an engagement partner. The firm should establish policies and procedures requiring that:

Answer 8

▪ The identity and role of the engagement partner are communicated to key members of client management and those charged with
governance;
▪ The engagement partner has the appropriate capabilities, competence, authority and time to perform the role; and
▪ The responsibilities of the engagement partner are clearly defined and communicated to that partner.

Question 9

The firm shall also assign appropriate staff with the necessary capabilities, competence, and time to:

Answer 9

▪ To perform engagements in accordance with professional standards
and regulatory and legal requirements, and
▪ To enable the firm or engagement partners to issue reports that are
appropriate in the circumstances

Question 10

The firm shall establish policies and procedures designed to provide it with reasonable assurance that engagements are performed in accordance with professional standards
and regulatory and legal requirements, and that the firm or _________________________________.

Answer 10

the engagement partner issue reports that are appropriate in the circumstances.

Question 11

The firm shall establish policies and procedures designed to provide it with reasonable assurance that the firm, its personnel, and, where applicable, others subject to independence requirements (including experts contracted by the firm and network firm personnel), ______________________________.

Answer 11

maintain independence where required by the Philippine code

Question 12

The firm shall establish policies and procedures designed to provide it with reasonable assurance that it is notified of breaches of independence requirements, _____________________________________.

Answer 12

and to enable it to take appropriate actions to resolve such situations.

Question 13

The firm shall establish policies and procedures for dealing with and resolving differences of opinion within the engagement team, with those consulted, and, where applicable, between _______________________________________.

Answer 13

engagement partner and the engagement quality control reviewer

Question 14

The firm shall establish policies and procedures for the retention of _________________ for a period sufficient to meet the needs of the firm or as required by law or regulation.

Answer 14

documentation

Question 15

The firm shall establish policies and procedures requiring, for appropriate engagements, and engagement quality control review that provides an objective evaluation of the _______________ made by the engagement team and the ______________ in formulating the report.

Answer 15

significant judgments; conclusions reached

Question 16

The firm should establish policies and procedures designed to provide it with reasonable assurance that the policies and procedures relating to the system of quality control ________________________________.

Answer 16

are relevant, adequate, operating effectively, and complied with in practice

Question 17

The firm should establish policies and procedures requiring appropriate documentation __________________________________________.

Answer 17

to provide evidence of the operation of each element of its
system of quality control.