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Two quality standards exposed - Update - International Auditing and Assurance Board
Internal Auditor, August, 2003 by J. Brune
THE INTERNATIONAL Auditing and Assurance Board (IAASB) of the International Federation of Accountants (IFAC) has issued an exposure draft containing two proposed standards on quality control. The draft aims to clarify quality-control responsibilities at both firm and engagement levels, says Dietz Mertin, chairman of the IAASB.
The proposed International Standard on Quality Control (ISQC) I: Quality Control for Audit, Assurance, and Related Services Practices--the first in a series of International Quality Control Standards--was developed to establish standards and to provide guidance for all engagements falling within the scope of IAASB engagement standards. The standard was designed to be read in conjunction with Parts A and B of the IFAC Code of Ethics for Professional Accountants.
Related Results
ISQC I addresses issues such as leadership and responsibilities within the firm, acceptance and continuance of client relationship and specific engagements, and engagement quality control review. Specifically, the standard requires firms to "establish a system of quality control designed to provide it with reasonable assurance that the firm and its personnel comply with professional standards and applicable regulatory and legal requirements." It also requires firms to "[rotate] the engagement partner after a specified period of time for all audits of financial statements of listed entities."
The proposed revised International Standard on Auditing 220: Quality Control for Audit Engagements addresses leadership responsibilities, ethics, engagement performance, engagement quality control review, and monitoring. The standard also includes expanded requirements regarding independence on audit engagements and indicates that the engagement partner is responsible for evaluating threats to independence, addressing identified breaches in firm policies and procedures relating to independence, and documenting conclusions regarding independence.
To download IFAC's exposure draft, visit www.ifac.org/eds.> --C. BRUNE
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