The
auditor is responsible for the quality control of the audit of financial
statements. This responsibility is not solely outlined through ISA 220, but
also through ISQC 1 and is further to be corroborated through the applicable
ethical requirements. Each audit firm is responsible for the implementation and
maintenance of a quality control system in order to ensure that the firm and
its personnel comply with the ethical, legal, and regulatory requirements
[L&RR] and that the audit reports issued by the firm are appropriate.
Responsibilities of an Engagement Partner
Being
the leader of the audit team, the engagement partner observes a higher need for
the maintenance of quality control throughout the audit. He, being responsible
for the overall quality of the audit engagement, should stay alert and
skeptical for any instance of non-compliance with the ethical and regulatory
requirements by any member of the audit team.
Ethical Requirements
While
the ethical requirements may vary from jurisdiction to jurisdiction, the
fundamental principles of ethics laid down by the IESBA Code of Ethics include
Integrity, Objectivity, Professional Competence, Confidentiality, and
Professional Behavior. Additional ethical requirements may be imposed on an
auditor through the local codes of conduct prevalent in different
jurisdictions.
Engagement Team and Performance
The
engagement partner must ensure that the team deployed on the audit of financial
statements under his audit engagement is competent and capable enough to comply
with the professional standards and applicable L&RR. The audit team must
have the necessary competence to enable an audit report under the given
circumstances.
The
responsibility for the audit report and its validity, however, rests with the
engagement partner. He is also responsible for the direction, oversight, and
performance of the audit engagement in accordance with the applicable LR&R
and professional standards.
Practice
While
accepting or continuing an audit engagement, an engagement partner shall obtain
information from the firm and network firms to identify any potential threats
of non-compliance with the applicable quality control requirements. In the
instance of identifying any such threat, an auditor is advised to immediately
report the matter in his reporting line, or seek the application of safeguards
that reduce the threat to an acceptably low level, or where appropriate,
withdraw from the audit engagement. Any inability to resolve a given matter
should be disclosed to the firm immediately for appropriate action.
It
is also advised to conduct a thorough and rigorous review of the audit
documentation and working papers before or on the date of the audit report to
be satisfied that sufficient and appropriate audit evidence has been obtained
by the audit team to base the audit opinion on.
References:
https://www.frc.org.uk/getattachment/615b6684-314e-44ae-a47f-1fc8ffa92bac/ISA-(UK)-220_Revised-November-2019-With-Covers.pdf
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