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Dear tutor,
The part “a” of question 4 of Jun 2015 covers all firm level quality control issues ?? which are:
1) increasing materiality
2) reducing sample size by using judgmental sampling and
3) sampling part of the population.Further in technical article “Audit quality – a perpetual current issue”, there are many items of compromising audit quality:
1) Tight deadlines and restrictions on audit fees
2) Competence
3) Providing non-audit services even if ethical threats are significant
4) Extensive use of judgment
5) producing competitive tender documents
Are they all at firm level or engagement level? Should we be careful in exam to consider firm level or engagement level quality control issues as the ACCA suggested answer does not seem to be careful?Thanks,
The scenario says “You are conducting a review of the quality of THAT AUDIT [i.e. Wire Co] and any ethical issues which arose in relation to it.”
The requirement is “Comment on the quality control … in respect of the audit of Wire Co AND the firm-wide policies of Bunk & Co ….”
The question could not be clearer that you should be considering both ISQC 1 (firm) issues and ISA 220 (engagement level) matters.
However, candidates should always take care where there is a distinction – if only one thing is asked for, there is no credit for what is not asked for. Chapter 9 of the notes clearly distinguishes between the two.Dear tutor,
Ok. Thank you.
1) In you comment: “https://opentuition.com/topic/quality-control-for-firm-and-individual/”, you have said that SACRED are at firm level. I think they are at engagement level. Pls confirm.
2) Engagement QC review is done before audit report is being issued, so can we say that it reduces detection risk and hence reduces audit risk?
3) Should I consider quality control issues in terms of audit process (Client acceptance, Audit strategy and planning, Audit evidence gathering, Review and completion, audit report issuance). I will have to just separate group quality control issues. This may help me in understanding them and to apply them for answering in exam.
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