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- 10 Marks
Question
You have recently been employed by a small firm of Chartered Accountants “Osei Peprah and Associates”. The firm has been in operations since 1985 and the two main partners, Mr. Osei and Mr. Peprah, are above 70 years old. They are mostly inactive in the main audit work and rely on three audit trainees and one Audit Senior for the performance of the audit engagement for their 30 clients. The three audit trainees were recently employed after their national service with the firm. You are the only qualified accountant besides the partners.
On your first meeting with Mr. Osei, he explained that the firm needs to improve its quality control procedures and audit working papers. He highlighted that the recent audit of the firm’s activities by the Quality Assurance Monitoring department of ICAG revealed several quality control issues as well as non-compliance with ISAs in their audit engagements.
Required: In accordance with ISA 220 (Revised): Quality Management for an Audit of Financial Statements, explain FIVE (5) responsibilities of the engagement partners for managing and achieving quality on audits.
Answer
- Overall Responsibility for Quality:
- The engagement partner must take overall responsibility for managing and achieving quality on the audit engagement. This includes creating an environment that emphasizes the firm’s culture and expected behavior of engagement team members.
- Communication of Quality Expectations:
- The engagement partner should establish and communicate the expected behavior of engagement team members, emphasizing that all members are responsible for contributing to the management and achievement of quality at the engagement level.
- Direction and Supervision:
- The engagement partner is responsible for the direction, supervision, and review of the work performed by engagement team members to ensure that the significant judgments made and the conclusions reached are appropriate.
- Understanding Ethical Requirements:
- The engagement partner should have a thorough understanding of the relevant ethical requirements, including those related to independence, applicable to the audit engagement.
- Evaluation of Threats to Compliance:
- The engagement partner must evaluate any threats to compliance with ethical requirements, including independence, and take appropriate actions to address these threats.
- Tags: Engagement Partners, ISA 220, Quality control
- Level: Level 3
- Topic: Practice management, The audit approach
- Series: NOV 2023
- Uploader: Kwame Aikins