ISQC 1 Summary - ISQC1 PDF

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ISQC 1 Summary : Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements Scope of ISQC 1 - Firm’s responsibilities for its system of quality control for audits and reviews of financial statements, and other assurance and related services engagements. Authority of this ISQC “Para 5-1” - Applies to all firms of professional accountants in respect of audits and reviews of financial statements, and other assurance and related services engagements Effective date of ISQC 1: 15 December 2009 Objective of ISQC 1 “Para 11” - To establish and maintain a system of quality control to provide with reasonable assurance that 1. The firm and its personnel comply with professional standards and applicable legal and regulatory requirements; and 2. Reports issued by the firm or engagement partners are appropriate in the circumstances. Definitions “Para 12” Requirements of ISQC 1 “Para 13-59” > Personnel responsible for establishing and maintaining the firm’s system of quality control shall have understanding of this ISQC 1. > Comply with all requirement of this ISQC 1 unless not applicable. > Additional requirement may need to be established in addition to ISQC 1 for fulfillment of objective of ISQC 1. Elements of a System of Quality Control 1. Leadership Responsibilities for Quality within the Firm * Firm’s chief executive officer (or equivalent) or, if appropriate, the firm’s managing board of partners (or equivalent) shall assume ultimate responsibility for the firm’s system of quality control. *Firm’s chief executive officer or managing board of partners shall have sufficient and appropriate experience and ability, and the necessary authority, to assume that responsibility. 2. Relevant Ethical Requirements * Firm and its personnel shall comply with relevant ethical requirements. 3. Independence * Firm shall communicate its independence requirements to its personnel and, where applicable, others subject to them.

* Identify and evaluate circumstances and relationships that create threats to independence, and to take appropriate action. * Engagement partner shall provide information about the client and engagement to evaluate impact on independence requirement. * Personnel shall promptly notify the firm of circumstances and relationships that create a threat to independence * accumulation and communication of relevant information to appropriate personnel for satisfaction of independence requirement. * Personnel shall promptly notify the firm of independence breaches of which they become aware. * The firm to promptly communicate identified breaches to responsible engagement partner. * Communicate the action taken to resolve the issue....