ISA 220 (REDRAFTED) QUALITY CONTROL FOR AN AUDIT OF FINANCIAL STATEMENTS
This ISA deals with the responsibilities the auditor has in connection with quality control procedures for an audit of financial statements.
Quality control is a pivotal aspect of an audit. Without certain quality control procedures, an audit may fail to be effective. ISQC 1 ‘Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements’ stipulates that a firm has an obligation 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. [ISA220.2(a)]
b. The reports issued by the firm or engagement partners are appropriate to the circumstances. [ISA220.2(b)]
It follows, therefore, that engagement teams have a responsibility to implement quality control procedures that are applicable to an audit assignment and provide the firm with relevant information to enable implementation of the firm’s systems and quality control procedures.
Audits must comply with professional standards and also applicable legal and regulatory frameworks. For example, in the UK, audits must be conducted in accordance with ISAs (UK and Ireland) and the Companies Act.
The engagement partner must take full responsibility for the audit and the overall quality control. During the course of the audit, the engagement ...