University Auditing and Assurance: ASA 220 Quality Control Report

This report summarizes ASA 220, which outlines the quality control requirements for audits of historical financial information, issued by AUASB. It applies to audits of annual and half-year statements prepared under the Corporations Act and other objectives. The audit engagement partner is responsible for the overall quality of the audit, ensuring compliance with ethical requirements and the competence of the engagement team. The engagement team must possess the necessary experience, technical knowledge (including IT), understanding of auditing standards, and the company's quality control procedures, and the ability to apply professional judgment. For listed organizations, engagement partners must engage a quality control reviewer, refrain from releasing the report until the review is complete, and discuss significant matters with the reviewer. The report references several sources, including AUASB and academic research papers, that support the information on audit quality, auditor independence, and compliance with IFRS.

ASA 220 - Quality control for
audits of historical financial
information
Name of the student
Name of the university
Student ID

ASA 220 was issued by AUASB to fulfil
the requirement of legislative
provisions and is applicable to the
audit of annual statement for specific
financial year or the audit of annual
statement for half-year that is
prepared in accordance with the Part
2M.3 of Corporation Act and to the
audit of annual statement for any other
objectives

Audit engagement partner is liable for
overall quality in context of each of the
audit engagements with which the
partner is allocated. Further the
engagement partner is liable to take
into consideration whether the
engagement team members are
complying with the relevant
requirements those are ethical and
related to the audit engagements.

The engagement partner must satisfy
himself that collectively the engagement
team has the requited competencies,
capabilities and time for performing audit
engagement in conformation with the
auditing standards and the legal as well
as regulatory requirements. He is also
liable to take the responsibility for
directing, supervising and the audit
engagement team’s performance in
confirmation with the auditing standards
and legal as well as regulatory
requirements along with the reports of
the auditors issued under existing
circumstances

Required competence and capabilities
expected from the entire engagement team
includes –
(i) practical experience and understanding
of audit engagements of similar
complexity and nature through proper
participation and training
(ii) Required technical knowledge that
includes relevant knowledge of
information technology
(iii)Understanding of the auditing
standards and legal as well as
regulatory requirements
(iv)Understanding of the company’s
procedures and policies regarding
quality control and (v) ability regarding
application of professional judgment

For the purpose of auditing the listed
organisation’s financial reports,
engagement partners shall
(i) establish that the reviewer of quality
control for the engagement has been
engaged
(ii) shall not release the report until
review completion of quality control
(iii)discuss noteworthy matters generated
during audit engagement with the
reviewer of quality control for the
engagement.

Reference
Auasb.gov.au. 2019. [online] Available at:
https://www.auasb.gov.au/admin/file/content102/c3/Nov13_Compile
d_Auditing_Standard_ASA_220.pdf [Accessed 6 Sep. 2019].
Bepari, M.K. and Mollik, A.T., 2015. Effect of audit quality and
accounting and finance backgrounds of audit committee members
on firms’ compliance with IFRS for goodwill impairment
testing. Journal of Applied Accounting Research, 16(2), pp.196-
220.
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.
El-Dyasty, M.M., 2019. The Effect of Auditor Type on Audit Quality:
An Empirical Analysis. Available at SSRN 3428707.
Legislation.gov.au. 2019. ASA 220 - Quality Control for Audits of
Historical Financial Information - April 2006 . [online] Available at:
https://www.legislation.gov.au/Details/F2006L01365 [Accessed 6
Sep. 2019].
Sanderson, J., 2014. Audit issues. SMSF Guide: Current Issues and
Strategies for the Self-Managed Superannuation Funds Adviser,
p.377.