Auditing - Quality control Leave the first rating Terms in this set (19) 1. Human resources 2. Engagement/client acceptance and continuance What are six interrelated elements of quality control? 3. Leadership reaonsibilities 4. Performance of the engagement 5. Monitoring 6. Ethical requirements Who requires CPA firms to adapt system of quality AICPA code of professional conduct control? 1. Requiring timely identification of staffing requirements 2. Planning for the total personnel needs of all the firm's professional engagements What are examples of human resources in quality control system? 3. Requiring a background check of all new personnel 4. Requiring supervisors to prepare performance evaluations 5. Requiring personal to attend training 6. Consideration of continuity and periodic rotation of personnel 7. Consideration of opportunities for on-the-job training What are the purpose of engagement policies and To decide whether or not to accept or continue a client relationship and whether or not procedures? to perform a specific engagement 1. firm minimizes likelihood of association with a client whose management lacks integrity Engagement policies should provide firm with 2. firm undertakes only the engagements that it reasonably expects to complete with reasonable assurance that? professional competence 3. Can comply with legal and ethical requirements 1. Reviewing the financial statements and credit rating of the proposed client What are examples of engagement policies? 2. Inquiring of third parties as to the reputation of the proposed client 3. Evaluating firms ability to service the client properly 1. To "set the tone at the top" 2. Emphasize quality over commercial considerations What are leadership responsibilities in terms of quality 3. Demonstrate a commitment to quality in performance evaluation, compensation and control? advancement 4. Devote sufficient resources to developing, communication and supporting the quality control system. 1. Achieve consistent high level of performance 2. Ensure that engagement is properly supervised and work is properly reviewed 3. Maintain confidentiality, safe custody, integrity, accessibility, retrievability and retention Performance policies and procedures should be of engagement documentation established to: 4. Allow for consultation with third party experts for matters in which the firm is not properly competent 5. Provide a means to resolve a difference of opinion 6. Establish and follow guideline for engagement quality review : https://quizlet.com/217155129/auditing-quality-control-flash-cards/ 9/18/23, 8 57 AM Page 1 of 2 Who should perform a firms monitoring activities? How often is a CPA firm peer reviewed? What is purpose of following ethical requirements? A partner or someone with appropriate experience and authority Minimum, once every three years To maintain public confidence in the profession 1. Independence encompasses impartiality and freedom from any obligation to or interest in the client What are ethical requirements? 2. Independence requirements should be communicated to firm personnel 3. At least annually, all firm personnel subject to independence requirements should confirm their independence in writing. The nature and extent of a firms quality control policies depend on? 1. The firm's size 2. Its organization structure 3. The nature and complexity of its practice Relationship between GAAS and Quality control GAAS -> each obligation statndards Quality Control -> the conduct of the firm as a whole If a firm has a failed quality control system, may it still Yes comply with GAAS properly? 1. The work has been performed in accordance with GAAS 2. Significant findings or issues need further consideration Review of other's work consists of consideration whether? 3. Appropriate consultations have taken place and been documented 4. The nature, extent and timing of work performed is appropriate 5. Work performed supports conclusions 6. Sufficient evidence obtained 7. Objectives of the engagement have been achieved Which two financial areas are usually considered 1. Revenue recognition significant risks? 2. Management override 1. Failure to obtain sufficient audit evidence A significant engagement deficiency exists when? 2. Reached an inappropriate conclusion 3. Report not appropriate for circumstances 4. Firm is not independent of the client 1. Engagement size and complexity The firm should consider the following factors in 2. Personnel availability achieving a balance of engagement manpower 3. special expertise required requirements, personnel skills, and individual 4. Timing of the work to be performed development and utilization? 5. Continuity and periodic rotation of personnel 6. Opportunities for on-the-job training : https://quizlet.com/217155129/auditing-quality-control-flash-cards/ 9/18/23, 8 57 AM Page 2 of 2
