Audit and Assurance: ASA 220 and Financial Reporting Quality Control

This report delves into the critical aspects of audit and assurance, emphasizing the significance of ASA 220, which pertains to quality control in financial reporting and historical financial information. The study highlights the importance of auditing in evaluating accounting entries within a company's financial statements, ensuring their accuracy, and providing assurance on their reliability. ASA 220 establishes quality control procedures, emphasizing leadership responsibilities, ethical requirements, and auditor independence. The report covers the application of ASA 220, its relevance to the Corporation Act 2001, and its impact on financial reporting. It examines key elements such as personnel competence, quality of audit reports, and the role of audit committees in reviewing the overall audit process. Furthermore, the report discusses historical financial information, including balance sheet components, financial statement presentation, and the importance of reasonable assumptions in audit reporting. The report concludes by summarizing the key takeaways, reinforcing the role of audit and assurance in maintaining the integrity and accuracy of financial statements.

Running head: AUDIT AND ASSURANCE
Audit and Assurance
Name of the Student
Name of the University
Author’s Note

1AUDIT AND ASSURANCE
Introduction
Auditing and assurance is vital for an organisation as it includes the process of evaluating
as well as entries for accounting that are associated within the financial statement of the
company in their normal course of business. Checking the accuracy of the financial report is the
main motive of the overall process of auditing. It also includes the process of assurance that
mainly analyses the assessment of accounting entries that would be beneficial for the company.
In this study, ASA 220 has been taken into consideration which mainly deals with quality control
of audit of the financial statements along with the other historical financial information.
ASA 220: Quality control for an audit of a financial report and other historical financial
information
The standard of auditing mainly establishes the requirement which has the main motive
to implement the quality control procedures that would be associated with the organisation in
their normal course of business. The leadership responsibilities and the quality of audit is
associated with the quality of audit that would be performed on emphasising the ethical
requirement of audit and including the independence of the appointed auditor (Cao, Chychyla
and Stewart 2015). This is the pronouncement that has been published by the AUASB with
certain specific requirement of performance of the engagement that requires the quality of the
financial statement that has been presented by the company after a certain period of time. The
Auditing and Assurance Standards Board (AUASB) makes the standard that is ASA 220 which
mainly deals with the quality of the auditing that is directly associated with the financial
statement of the company. The application of the standard mainly applies to the process of
auditing of the financial statement as per the Corporation Act 2001. This particular standard is
also applicable to the period of financial reporting which includes the quality control procedure

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on guiding the specific responsibilities. It also includes the auditing of the historical information
that are associated with the business along with financial reporting of the business (Nagy 2014).
The overall engagement of the team in their normal course of business mainly points out the
quality control along with the requirement that has already been issued by the professional
bodies that deals with accounting procedure.
This particular standard of auditing has become operative form the date of 1st July 2006
that issues the report for quality control of the financial statement of the business. In the
paragraph 5 of the standard, it has been mentioned that the entity is entitled for providing the
relevant information that act as the function of the quality control of the system that would be
provided in the financial statement of the business (Tanyi and Smith 2014). The competence of
personnel is measured by the procedure of recruitment by the process of formal training and their
accumulation as well as communication of the report that has already been mentioned by the
continuance system. It includes the engagement partner that would be associated with the overall
process of the quality control and other historical financial information (Lennox, Wu and Zhang
2014). The quality of audit is to be good as the audit report is total based on the process of
auditing which is mainly performed by the appointed auditor of the company. Both of auditors
that are internal auditor as well as the external auditors should have the tendency to maintain the
quality of the auditing in the overall process (Wang, Yu and Zhao 2014). The representative of
the audit committee includes certain documents that mainly contains that only contains factual
contents which mainly supports the evidences of the objective of the company.
The data that are intended to be included in the audit report mainly sets the audit plan
which delays the revised date of issue of the report. The report of audit is associated with the
objective data that mainly follows up the action by conducting the subsequent audit report for the

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report that includes the effective nature of the business along with the effective date of report
(Drake, Goldman and Lusch 2015). The report of the auditing includes the cause of requirement
that is required to be issued with the process of auditing if it is completed by setting the deadline
for the audit plan. On the other hand, each and every effort are required to be made for the
effective audit report which points out the quality of the report that are prepared after a certain
period of time. The organisation of the audit committee mainly reviews the overall procedure of
auditing that mainly reviews the accuracy as well as the completeness of the report. It also
includes the integrity of the audit report that generally reflects the tone as well as content of the
audit report (Pizzini, Lin and Ziegenfuss 2014). Reducing the risk of completeness also points
out the corrective actions that would help the stakeholders of the firm to view the overall audit
report after the end of certain time period.
The historical financial information is mainly expressed in financial terms that is directly
associated with the company in their normal course of business. The economic event that
associated with the business occurs in the time period of circumstances for the point which last in
the company for more than one financial year (Lennox, Wu and Zhang 2014). These data are to
be related contents of past time that has already happened in the organisation. The components of
historical financial information includes the elements and accounts that are associated with the
financial reports and in a single financial statement that are associated with balance sheet.
Accounts receivable, impairment of assets and inventory along with liability of accrued benefits
are identified in the intangible assets of the business firm (Cao, Chychyla and Stewart 2015). The
financial statement that are prepared as per the financial reporting format is required to achieve
the fair presentation of data which would beneficial for the overall analysis of internal
management analysis. Moreover, the hypothetical assumptions that are made in the process of

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audit reporting includes the prospective of financial reporting in a form of projection which
highlights the future events and actions of management (Litt et al. 2014). The overall expectation
of take place in the audit report should have to be based on the reasonable grounds along with
other information that are directly derived from the financial records.
Therefore, certain requirement are required to be included in the overall audit report
which highlights the quality of the report along with every stage of audit requirement. The
performing of the work are associated with certain actions that mainly complies with Auditing
Standard along with regulatory as well as legal requirement of the business (Rahmina and Agoes
2014). The quality control of the firm includes certain policies and procedures that mainly helps
in issuing the report for the auditors along with certain circumstances of their performances. It
also includes the ethical requirement that considers the engagement of the applicable code of
conduct for a professional accounting body and establishes a fundamental principle of ethics.
The areas of auditing includes the balanced summary that excludes the corrective measures and
setting the deadline of publishing the report (Auasb.gov.au 2019). The responsibility of audit
report includes the information that are mainly obtained with the agreement with the audit
committee regarding the results with the agreement. In addition to this, the integrity of
professional owners are generally competent for the performance of audit engagement that has
certain resources and time.
Conclusion
From the above study, it can be concluded that auditing and assurance mainly helps in
checking the overall quality of the audit report which are directly associated with the company.
The standard that is ASA 220 is also applicable to the period of financial reporting which
includes the quality control procedure on guiding the specific responsibilities. The competence

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of personnel is measured by the procedure of recruitment by the process of formal training and
their accumulation as well as communication of the report that has already been mentioned by
the continuance system. The components of historical financial information includes the
elements and accounts that are associated with the financial reports and in a single financial
statement that are associated with balance sheet. The quality of audit is to be good as the audit
report is total based on the process of auditing which is mainly performed by the appointed
auditor of the company.

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References
Auasb.gov.au. (2019). Auditing Standard ASA 220. Available at:
https://www.auasb.gov.au/admin/file/content102/c3/Nov13_Compiled_Auditing_Standard_ASA
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