Ratendra Kumar & Co.
Chartered Accountants
2E,
QUALITY CONTROL OBJECTIVES, POLICIES AND PROCEDURES IN
ATTEST FUNCTION
a.
Long Term
1.
To make quality assurance integral to
every function
2.
To strive for such a state where firm
name itself provides assurance of the state of art quality assurance policies
and procedures
b.
Short Term
1.
To comply with statutory requirements,
statements and standards issued by the ICAI and other pronouncements of the
ICAI or other regulatory authority
2.
To provide high level of assurance to
users of firm’s services of the standards followed by the firm
3.
To enable partners of the firm while
discharging their attest functions to establish that the work has been executed
in the best traditions of the firm.
1. Personnel
in the firm shall adhere to the principles of independence, integrity, objectivity,
confidentiality and professional behavior.
2. Staffing
of appropriate staff with required level of technical skill and professional
competence shall be done.
3. Job
shall be assigned to the personnel in accordance with the level of skill and
competence required for the assignment and the skill and professional
competence possessed by them. The team shall be headed by either a partner or other
suitably qualified personnel.
4. Partner
shall be available for consultation at all possible times. Need based outsourcing
may be resorted to in appropriate circumstances.
5. Yearly
review of present assignments in the light of experience gained shall be
conducted. Offers of future assignments shall also be reviewed periodically at
high level.
6. The
continued adequacy and operational effectiveness of quality control policies
and procedures is to be monitored.
i.
No work shall be accepted if
1. the
scope of work is so curtailed that no meaningful conclusion can be drawn on
completion of the work
2. the
time frame is such that required audit procedures cannot be carried out within
that time frame
3. the reporting requirement is
rigid and audit findings cannot be conveyed in a meaningful manner within the
prescribed reporting format.
ii.
Letter of engagement or the letter of
acceptance shall contain details about the job and results to be expected along
with limitations of the audit procedures.
i.
Statutory minimum level of audit
procedures, methods and techniques and reporting requirements shall be identified.
ii.
Desirable level of audit procedures,
methods and techniques and reporting requirements shall also be identified.
iii.
Audit programme
shall be prepared which shall contain, inter alia,
1. Time
requirement for the job and each of the audit steps
2. Skill
requirement of each of the audit steps
3. Placement
of personnel and their job definition according to the skill requirement
4. Review
and monitoring mechanism for works done
i.
Principles of independence, integrity,
objectivity, confidentiality and professional behavior shall be maintained.
ii.
Work shall be executed according to the
audit program.
iii.
Assistants to whom work is delegated may
need appropriate direction. Direction involves informing assistants of their
responsibilities and the objectives of the procedures they are to perform. It
also involves informing them of matters, such as the nature of the entity's
business and possible accounting or auditing problems that may affect the
nature, timing and extent of audit procedures with which they are involved
iv.
Proper documentation shall be maintained
which shall also show the application of mind in arriving at a particular
conclusion.
v.
Exception reporting shall be communicated
to the superior staff at the earliest.
vi.
Personnel carrying out supervisory responsibilities
shall perform the following functions during the audit:
1. monitor
the progress of the audit to consider whether:
a. assistants
have the necessary skills and competence to carry out their assigned tasks;
b. assistants
understand the audit directions; and
c. the
work is being carried out in accordance with the overall audit plan and the
audit programme;
2. become
informed of and address significant accounting and auditing questions raised
during the audit, by assessing their significance and modifying the overall
audit plan and the audit programme as appropriate; and
3. resolve any differences of
professional judgement between personnel and consider the level of consultation
that is appropriate.
vii.
The partner and the team leader, at
appropriate levels, shall be responsible to see whether
1. the
work has been performed in accordance with the audit programme;
2. the
work performed and the results obtained have been adequately documented;
3. all
significant audit matters have been resolved or are reflected in audit
conclusions;
4. the
objectives of the audit procedures have been achieved; and
5. the conclusions expressed
are consistent with the results of the work performed and support the audit
opinion.
viii.
Periodic work progress shall be
communicated to the person charged with the attest function.
i.
The following shall be reviewed
periodically:
1. overall
audit plan and the audit programme;
2. assessments
of inherent and control risks, including the results of tests of control and
the modifications, if any, made to the overall audit plan and the audit
programme as a result of tests of control;
3. documentation
of the audit evidence obtained from substantive procedures and the conclusions
drawn therefrom, including the results of
consultations; and
4. financial statements, proposed
adjustments in financial statements arising out of the auditor's examination,
and the auditor's proposed observations/report.
5. The
process of reviewing an audit may include, particularly in the case of large
complex audits, requesting personnel not otherwise involved in the audit to
perform certain additional procedures before issuing the auditor's report.
i.
Draft report shall be based on findings
obtained during audit.
ii.
Partner in consultation with the team
leader, unless he himself is the team leader, shall prepare the draft report.
iii.
The draft report shall be sent to the auditee for their comments and further information/
clarification.
iv.
Based on the response from the auditee, the report may be revised, if need be. Thereupon
the final report shall be prepared.
v.
Final report shall be compared by personnel
engaged in that assignment and then by independent personnel.