ACCM4400: Analyzing ASA 220 for Quality Control in Financial Audits

This essay provides a comprehensive summary of the Auditing Standard ASA 220, which focuses on quality control for audits of financial reports and other historical financial information. It discusses the responsibilities of engagement partners, the importance of ethical requirements, and the competencies required for audit teams. The essay also highlights the role of quality control systems within audit firms, the monitoring processes for ensuring the effectiveness of these systems, and the necessary documentation requirements. Furthermore, it emphasizes the engagement partner's responsibility for maintaining quality throughout the audit process, including addressing ethical issues, ensuring team competence, and resolving differences of opinion. The analysis concludes that ASA 220 provides essential guidelines for establishing and maintaining a robust quality control system in auditing engagements.

Running Head: AUDITING & ASSURANCE
AUDITING & ASSURANCE
Name of the Student
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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Quality Control for the Audit of the Financial Report and the Other Historical Financial
Information.............................................................................................................................2
System of the Quality Control and the Role of Engagement Teams.....................................3
ASA 220 Requirements..........................................................................................................4
Conclusion..................................................................................................................................5
Reference....................................................................................................................................6

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Introduction
The AASB that is Australian Accounting Standards Board is the Australian
Government agency, which is responsible for thedevelopment as well as maintaining the
standards of the financial reporting that are applicable for the organizations in the sectors of
private and public of the Australian economy. This independent board of the standard setting
of IFA has issued the standard of auditing that is ASA 220 for Quality control for financial
statements audit. The main aim of thestandards of auditing is to establish requirements and
providing with the other explanatory materials and applications, which help in dealing with
givenauditorsresponsibilities for the procedures of thecontrol ofquality forthe company’s
financial reports audit and the other historical financial information. The standard also helps
in addressing the given responsibilities in context of quality control engagement of
receiver(ASA220 2019). AASB has issued ISA 220 that deals with the specific
responsibilities of the auditors in relation to the procedures of the quality control for audit of
financial reports as well as other historical financial information. As per AASB, this standard
helps in addressingthe responsibilities of the engagement reviewer of quality control, where
applicable.Hence, this assignment would be analyzing the standards of auditing ASA 220 in
depth, issued by AASB.
Discussion
Quality Control for Financial Reports and the Other Historical Financial
InformationAuditing
In order to provide quality audits, the auditing standard provides the guidelines for the
engagement partners for having leadership responsibilities. It provides the relevant ethical
requirements with the help of setting assignments for audit of the engagement by the
engagement partners. The guidelines sets out the requirements of engagements performance,

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which is consist of reviews of quality control, consultations and reviews by the supervision. It
helps in explaining the monitoring processes in order to comply with quality control system
with the help of establishment of the documentations requirements, which are related to the
engagement reviewer of quality control(ASA220 2019).
This auditing standard applies to the auditing of the financial statements or the
financial reports for half-yearly or annual report that is according to Corporation Act 2001 as
well as auditing of other historical financial information. This particular standard of auditing
helps in dealing with the particular responsibilities the auditor hasin relation to the quality
control for the audit of the financial report as well as the other historic financial information,
which are read along with relevant ethics requirements (ASA220 2019).
Quality Control and the Role of Engagement TeamsSystem
The system of the quality control as well as applicable policies as well as procedures
is the responsibilities of the firm of audit. In order to provide with the reasonable assurances,
the organization are obliged to maintain and establish the system of quality assurances.
Further, engagements teams are responsible to implement the procedures of the quality
control, which are applicable for audit engagements as well as to provide the company with
the relevant informationfor enabling functionality of the part of quality control system, which
are in context to independence. In addition, the teams of engagement are entitled for having
reliance on the system of the quality control of the company until and unless information is
provided by the organization or otherwise suggested by the other parties(ASA220 2019).
The auditors aim for implementing quality control procedures in the organizations at
engagement level that ultimately helps auditors to have reasonable assurances. The issued
report of audit should comply with the applicable laws as well as regulatory requirements and
the Australian auditing standards.

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ASA 220 Requirements
The engagement partner takes the desired quality responsibilities for every assigned
audit engagements. As and when necessary, throughout the engagement of audit, the partner
of audit has to be alert by the observations as well as making enquiries, if in case there is non-
compliance of the relevant requirements of ethics by any of the team members of
engagements. In case of the ethical issues that come in consideration by the ethical partner of
the company‘s quality control system. It helps in indicting that the engagement team
members does not comply with required requirements of the relevant ethics and by the
consultations with others in the organization, the partner of engagement have to take action
against appropriate situations(ASA220 2019).
There needs satisfaction from the engagements partners regarding possessing of the
competencies as well as capabilities to perform audit engagements by the engagement teams
and auditors experts, in accordance with applicable regulatory law and regulations, ethical
requirements and requirements of Australian auditing standards. Further, in the given
particular circumstances, they should provide or issue auditor’s report. In addition,
responsibilities should be taken by the engagement partners, in respect of opinion differences,
engagements quality control review, supervision and performances as well as directors
responsibility (ASA220 2019).
The effectiveness of the system of the quality control are comprised of the monitoring
processes to provide the organizations with the assurances that are reasonable that the
policies as well as the procedures in context of systems of the quality control are operating
effectively, relevant and is adequate. In the latest circulated information of the company, the
partner of the engagements should consider the result of monitoring process of the company.
Moreover, auditors should maintain proper documentations in relation to issues of

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compliances, compliance conclusion, conclusion regarding audit engagements continuation,
relationship with the clients and reviewed audit engagements (ASA2202019).
Conclusion
Hence, it is concluded that ASA 220 auditing standard provides the guidelines that
deals with establishment and the maintenance of the system of the quality control for auditing
engagements. The standards provides the necessary policies and procedures that addresses
the relevancy of requirements of ethics such as client relationship acceptance as well as
continuance, engagements performances, human resources, monitoring and the elements for
quality in organizations such as leadership responsibilities.

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Reference
ASA 2019, ASA 220 - Quality Control for Audits of Historical Financial Information - April
2006. [online] Available at: https://www.legislation.gov.au/Details/F2006L01365 [Accessed
1 Sep. 2019].
Auditing Standard ASA 2019, ASA 220 Quality Control for an Audit of a Financial Report
and Other Historical Financial Information..[ebook] Available at:
https://www.auasb.gov.au/admin/file/content102/c3/Nov13_Compiled_Auditing_Standard_A
SA_220.pdf [Accessed 1 Sep. 2019].