Statement on Auditing Standards No. 25, The Relationship of Generally Accepted Auditing Standards to Quality Control Standards, and Statement on Quality Control Standards No. 2 (SQCS No. 2), System of Quality Control for a CPA Firm's Accounting and Auditing Practice, require the firm
to maintain a system of quality control to provide reasonable assurance that its personnel comply with applicable professional standards and the firm's standards of quality. Engagement performance policies and procedures required by paragraph .18 of SQCS No. 21/ encompass all phases of a firm's policies and procedures for the
design and execution of the engagement, which include the concurring partner review for SEC engagements. Accordingly, the concurring partner review is an integral part of the firm's system of quality control and serves as an objective review of significant auditing, accounting, and financial reporting matters2/ that come to the
attention of the concurring partner reviewer and the resolution of such matters prior to the issuance of the firm's audit report with respect to financial statements of SEC engagements (see Appendix D, SECPS §1000.38). On the basis of that review, the concurring partner reviewer should conclude that no matters that have come to his or her attention would cause the concurring partner reviewer to believe that the financial statements are not in conformity with generally accepted accounting
principles in all material respects, or that the firm's audit was not performed in accordance with generally accepted auditing standards. A member firm's system of quality control should include policies and procedures covering (a) the qualifications of concurring partner reviewers, (b) the nature, extent, and timing of the concurring partner review, (c) the documentation required to evidence compliance with the firm's policies and procedures with respect to the concurring partner
review requirement, and (d) quarterly reviews. As a minimum, the firm's policies and procedures should be responsive to the following:
Is standards on auditing are mandatory?Auditing Standards are mandatory to be by followed by practitioners under the direction issued by the Council of ICAI. Section 143(9) of the Companies Act, 2013 requires every auditor to comply with the Auditing Standards.
What is the purpose of generally accepted auditing standards?Generally accepted auditing standards (GAAS) are a set of principles that auditors follow when reviewing a company's financial records. GAAS helps to ensure the accuracy, consistency, and verifiability of an auditors' actions and reports.
What standards must auditors follow?General Standards 1. The auditor must have adequate technical training and proficiency to perform the audit. 2. The auditor must maintain independence in mental attitude in all matters relating to the audit.
Why would an accountant not accept a new audit engagement?After considering all the threats faced by the audit firm by accepting a new engagement, if some threats cannot be eliminated or reduced to a minimum level, either because the threat is too significant or appropriate safeguards cannot be applied, then the auditor should not accept the new audit and assurance engagement ...
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