i) Quality control policies and procedures relevant to an audit engagement, as required by ISA 220, include:

1. Leadership Responsibilities: The engagement partner is required to set an example with regards to the importance of quality. The engagement partner shall take responsibility for the overall quality on each audit engagement to which that partner is assigned.
2. Ethical Requirements: Throughout the engagement, the engagement partners shall remain alert through observation and making inquiries as necessary, for evidence of non-compliance with relevant ethical requirements by members of the engagement team.
3. Acceptance/Continuance of Client Relationships and Specific Engagements: The partner is required to ensure that the requirements of ISQC 1 in respect of acceptance and continuing with the audit are followed. If the engagement partner obtains information that would have caused him to decline the audit in the first place, he should communicate that information to the firm so that swift action may be taken. He must document conclusions reached about accepting and continuing the audit.
4. Assignment of Engagement Terms: The assignment of engagement terms is an important matter in ensuring the quality of an individual assignment. This responsibility is given to the audit engagement partner. He must ensure that the team is appropriately qualified and experienced as a unit. He should ensure that he assigns staff of sufficient capabilities, competence, and time to individual assignments so that he will be able to issue an appropriate report.
5. Engagement Performance: Engagement performance involves several factors such as direction. The partner directs the audit. He is required by other auditing standards to hold a meeting with the audit team and to perform an engagement quality control review to address the threat of self-review.

(Any 4 points well explained for 8 marks)

ii) Problems for small firms in implementing quality control procedures:

1. Lack of Human Resources: The most obvious areas of problems for small firms are when multiples of people are required to carry out quality control procedures, therefore review and consultation. The firm may lack the human resources to carry out reviews and consultations, particularly at the experienced level. It may be necessary to come to agreements with other firms to provide a forum for such reviews and discussions.
2. Training and Specialist Knowledge: There may be problems with initial and ongoing training or with particular specialist knowledge if the firm does not have a lot of staff. Again, entering into agreements with other firms to pool resources in such cases may help with these problems.

(2 points for 2 marks)