SA 220 – QUALITY CONTROL FOR AN AUDIT OF FINANCIAL STATEMENTS

Scope:

Ø This sa deals with the specific responsibilities of an Auditor regarding quality control procedures for an audit of financial statements

Ø This SA is based on the premise that the firm is subject ot SQC 1.

Note:

Under SQC 1, the firm has to maintain a system of quality control, to provide it with reasonable assurance { the Engagement Partner is primarily responsible to look after this} that:

a. The firm and its personnel comply with professional standards and regulatory and legal requirements and

b. reports issued by firm and engagement partners are appropriate.

 

Relevant Ethical Requirements:

The engagement partner shall take responsibility for overall quality of each audit engagement.

The engagement parner shall ensure, at all times, throughout the audit, that the members of engagement team comply with relevant ethical requirements.

Where the Engagement Partner is inferred about the non compliance of ethical requirements by the members of engagement team, he shall take appropriate action.

 

Independence:

·        The Engagement Parner shall determine/ evaluate the circumstances that create threats to independence

·        He shall take appropriate action to eliminate such threats or reduce them to an acceptably low level by applying safeguards and if considered necessary, he shall withdraw from audit engagement

Review/ Consultation:

·        Engagement Partner shall ensure that review being performed in accordance with Firm’s review policies and procedures.

·        For audits of financial statements of listed entities, and those other audit engagements, Engagement quality control is required.

·        The auditor’s report shall not be dated earlier than the date of engagement quality control review.

·        The EQCR shall perform an objective evaluation of the significant judgements made by the engagement team and the conclusions reached in formulating the auditor’s report.

Note:

In case of difference of opinions arise within the engagement team, with those consulted or, where applicable, between the Engagement Partner and the EQCR, the Engagement team shall follow the Firm’s policies and procedures for dealing with and resolving differences of opinion.