Auditing and Assurance (ACCM4400) - ASA 220 Quality Control Report

This report provides a summary of ASA 220, an auditing standard issued by the IAASB, focusing on quality control for financial report audits. ASA 220 establishes requirements and provides application and explanatory materials regarding auditor responsibilities for quality control procedures. It addresses the responsibilities of engagement partners, including ethical requirements, performance of engagements, and monitoring compliance. The standard emphasizes the importance of the audit firm's quality control system, the engagement team's reliance on this system, and the implementation of quality control procedures at the engagement level. Key aspects covered include ethical requirements, leadership responsibilities, documentation, and the overall quality of the audit. The report highlights the standard's role in ensuring that audits comply with Australian Auditing Standards and applicable laws and regulations.

AUDITING &
ASSURENCE

Key Highlights of ASA 220
 The auditing standard ASA 220 for Quality control for the
financial statements Audit is issued by IAASB that is
considered as an independent board of standard setting
of IFA.
 The purpose of this auditing standard is for establishing
the requirements and provides the applications.
 It also provides other explanatory materials that deals
with the auditors responsibilities in respect of the
procedures of the quality control for auditing of the
financial reports as well as other historical financial
information.
 This particular standard also helps in addressing the
concerned responsibilities of quality control receiver
engagement, where applicable (Legislation.gov.au. 2019).

Audit Quality Control
 The auditing standard helps in establishing the responsibilities of the leadership of
engagement partner for the quality audits.
 It explains the relevant requirements of ethics by setting the assignment for
engagement team in order to audit the engagement.
 It sets out the performance requirements of the engagement that includes quality
control reviews, supervision reviews as well as consultations.
 It explains the process of the monitoring for the compliance with quality control
system by establishing the requirements of documentation that is related to the
quality control for the engagement of audit that includes those which is related to
quality control reviewer of engagement (Ottaway 2014)
 This standard helps in dealing with the auditor’s specific responsibilities regarding
the procedures of the quality control for financial report audit as well as other
historical financial information. It reads in the conjunction with the relevant
requirements of ethics (Carey, Monroe and Shailer 2014).
 This standard helps in dealing with the auditor’s specific responsibilities regarding
the procedures of the quality control for financial report audit as well as other
historical financial information. It reads in the conjunction with the relevant
requirements of ethics (Carey, Monroe and Shailer 2014).

Quality Control System and Engagement Teams
Role
 The audit firm has the responsibility of the policies and procedures
as well as systems of quality control.
 For providing with the reasonable assurances, the company has
the obligation for establishing as well as maintaining the quality
control system for providing it with the reasonable assurances.
 The teams of engagement are entitled for relying on the quality
control system of the firm, until and unless the information
provided by the entity or the other parties otherwise suggests
(Ottaway 2014).
 The auditors should have the objective for implementation of the
procedures of the quality control at the level of engagement, which
helps in providing the auditor with the reasonable assurances.
 The audit could co.mplies with the Australian Auditing Standards,
applicable requirements of the laws and regulatory and the issued
report of the auditor should be appropriate in circumstances (Chi
and Ziebart 2017).

Requirements of ASA 220
 The partner of engagement has to take the responsibility for the quality that is
overall on each of the engagement of audit for which the partner is being assigned.
 If any ethical issues comes to the attention of ethical partner by the quality system
control of the entity then it indicates that the engagement team members have not
complied with the required relevant ethical requirements and then by consulting
with others in entity, the engagement partner should take the action that is
appropriate in the situation (Sanderson 2014).
 The engagement partner must strives for taking the responsibilities for the
direction, performance and supervision, reviews, consultations, review of
engagement quality control as well as differences in the opinion (Collings 2014).
 There should be proper documentation by the auditor regarding the compliance
issues, conclusion on compliance, conclusion on continuation of audit
engagements and client relationships as well as documents of the reviewed audit
engagements (Ocak and Ozden 2018).
 There should be proper documentation by the auditor regarding the compliance
issues, conclusion on compliance, conclusion on continuation of audit
engagements and client relationships as well as documents of the reviewed audit
engagements (Ocak and Ozden 2018).

Continued..
 It can be said that the auditing standard ASA 220
helps in dealing with the responsibilities for
establishing as well as maintaining the quality
control system for the engagement of audit.
 The quality control system includes the procedures
as well as policies, which address the elements
such as the responsibilities of leadership for the
quality in the entity, ethical requirements that are
relevant such as continuance and acceptances of
the client relationship and the specific
engagements, human resources, performances of
engagements and lastly monitoring (Miah 2017).

Reference
 Carey, P.J., Monroe, G.S. and Shailer, G., 2014. Review of Post CLERP 9 Australian Auditor‐
Independence Research. Australian Accounting Review, 24(4), pp.370-380.
 Chi, Y.H. and Ziebart, D.A., 2017. Audit quality and attributes of management earnings
forecasts. Review of Accounting and Finance, 16(4), pp.406-423.
 Collings, S., 2014. Frequently asked questions in International standards on auditing. John Wiley &
Sons.
 Legislation.gov.au. (2019). ASA 220 - Quality Control for an Audit of a Financial Report and Other
Historical Financial Information - October 2009. [online] Available at:
https://www.legislation.gov.au/Details/F2017C00908 [Accessed 6 Aug. 2019].
 Miah, M.S., 2017. Accounting standards complexity, audit fees and financial analyst forecasts in
Australia: a thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy
in Accounting at Massey University, Albany, New Zealand (Doctoral dissertation, Massey University).
 Ocak, M. and Ozden, E.A., 2018. Signing Auditor-Specific Characteristics And Audit Report Lag: A
Research From Turkey. Journal of Applied Business Research, 34(2), p.277.
 Ottaway, J., 2014. IMPROVING AUDITOR INDEPENDENCE IN AUSTRALIA: IS ‘MANDATORY
AUDIT FIRM ROTATION’THE BEST OPTION?.
 Sanderson, J., 2014. Audit issues. SMSF Guide: Current Issues and Strategies for the Self-Managed
Superannuation Funds Adviser, p.377.