FOCUS NOTES - PSQC

Philippine Standard on Quality Control Control

Kristine R. Apale

AC516 12:00 – 3:00

Focus Notes

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deals with a ir!"s responsi#ilities or its s$ste! o %ualit$ control or audits and re&iews o inancial state!ents' and other assurance and related ser&ices en(a(e!ents

)einitions 1. )ate )ate o report report – date date selected selected #$ the practitioner to date the report. 2. *n(a(e! *n(a(e!ent ent docu docu!en !entati tation on – record record o wor+ peror!ed' peror!ed' results results o#tained' o#tained' and and conc conclu lusi sion onss the the prac practi titi tion oner  er  reached 3. *n(a(e! *n(a(e!ent ent partn partner er – respo responsi nsi#le #le or  or  the en(a(e!ent and its peror!ance ,. *n(a(e! *n(a(e!ent ent %ualit$ %ualit$ contro controll re&iew re&iew –   process desi(ned to pro&ide an o#-ecti&e e&aluation' on or #eore the date o the report' o the si(niicant  -ud(!ents 5. *n(a *n(a(e! (e!ent ent %uali %ualit$ t$ cont control rol re&iewer – person who can o#-ecti&el$ e&aluate the si(niicant  -ud(!ents the en(a(e!ent tea! !ade and the conclusions it reached in or!ulatin( the report. 6. *n(a(e! *n(a(e!ent ent tea! – All All partn partners ers and and sta peror!in( the en(a(e!ent' and an$ indi&iduals en(a(ed #$ the ir! or a networ+ ir! who peror!  procedures on the en(a(e!ent . Fir! – A sole sole practi practitio tioner ner''  partnership or corporation or other entit$ o proessional accountants. /. nsp nspec ectio tion n – proc proced edur ures es desi(n desi(ned ed to  pro&ide e&idence o co!pliance #$ en(a(e! en(a(e!ent ent tea!s tea!s with with the ir! ir!ss

%ualit$ control policies and  procedures. . onito onitorin rin( ( – A process process co!p co!prisi risin( n( an on(oin( consideration and e&aluation o the ir!s  ir!s s$ste! o %ualit$ control 10. Networ+ Networ+ ir! – A ir! or entit$ that #elon(s to a networ+. 11. Networ+ – A lar(er structure ai!ed at cooperation and is clearl$ ai!ed at proit or cost4sharin( or shares co!!on ownership' control or !ana(e!ent' co!!on %ualit$ control policies and procedures' co!!on  #usiness strate($' the the use o a co!!on #rand na!e' or a si(niicant part o proessional resources. 12. artner – An$ An$ indi&idual with authorit$ to  #ind the ir! with respect to the peror!ance o a proessional ser&ices en(a(e!ent. 13. ersonnel ersonnel – artners artners and sta  sta  1,. Rele&ant Rele&ant ethical re%uire!ents re%uire!ents – *thical re%uire!ents to which the en(a(e!ent tea! and en(a(e!ent %ualit$ control re&iewer are su#-ect 15. ta – roessionals' roessionals' other than partners' partners' includin( an$ e7perts the ir! e!plo$s. 16. uita#l$ %ualiied e7ternal person – An indi&idual outside the ir! with the co!petence and capa#ilities to act as an en(a(e!ent partner 

R*89R**N Appl$in(' and Co!pl$in( with' Rele&ant Re%uire!ents •

desi(ned to ena#le the ir! to achie&e the o#-ecti&e

Philippine Standard on Quality Control

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hall #e co!plied unless the re%uire!ent is not rele&ant to the ser&ices pro&ided in

respect o audits and re&iews o inancial state!ents' and other assurance and related ser&ices en(a(e!ents *le!ents o a $ste! o 8ualit$ Control 1. ;eadership Responsi#ilities For 8ualit$ Re%uire en(a(e!ent partners to pro&ide the ir! with rele&ant inor!ation a#out client en(a(e!ents  #> Re%uire personnel to pro!ptl$ noti$ the ir! o circu!stances and relationships that create a threat to independence c> he accu!ulation and co!!unication o rele&ant inor!ation to appropriate  personnel ?;N* C@)* @F *?C a> nte(rit$ F9N)A*NA; RNC;*:  #> @#-ecti&it$ a> he leadership o the ir! c> roessional co!petence  #> *ducation and trainin( and due care c> onitorin( d> Conidentialit$ d> A process or dealin( with non4 e>  r o e ss i on a l # eh a& io r   co!pliance •

co!petent to peror! the en(a(e!ent and has the capa#ilities

Philippine Standard on Quality Control

 #> can co!pl$ with rele&ant ethical re%uire!ents c> considered the inte(rit$ o the client ,. ?u!an resources •

ro&ide reasona#le assurance that it has suicient personnel with the co!petence' capa#ilities' and co!!it!ent to ethical principles

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Assi(n!ent o *n(a(e!ent ea!s re%uires:

a> identit$ and role o the en(a(e!ent partner are co!!unicated  #> en(a(e!ent partner has the appropriate co!petence' capa#ilities' and authorit$ to peror! the role c> he responsi#ilities o the en(a(e!ent partner are clearl$ deined and co!!unicated to that partner  5. *n(a(e!ent peror!ance •

ro&ide reasona#le assurance that en(a(e!ents are peror!ed in accordance with proessional standards and applica#le le(al and re(ulator$ re%uire!ents

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a+es place on diicult or contentious !atters  #> uicient resources are a&aila#le c> Consultation are docu!ented and a(reed

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*n(a(e!ent 8ualit$ Control Re&iew a> pro&ides an o#-ecti&e e&aluation o the si(niicant -ud(!ents !ade #$ the en(a(e!ent tea! and the conclusions reached in or!ulatin( the report  #> ncludes: •

)iscussion o si(niicant !atters with the en(a(e!ent partner

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Re&iew o the inancial state!ents or other su#-ect !atter inor!ation and the proposed report

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Re&iew o selected en(a(e!ent docu!entation relatin( to si(niicant  -ud(!ents the en(a(e!ent tea! !ade and the conclusions it reached and

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*&aluation o the conclusions reached in or!ulatin( the report and

consideration o whether the proposed report is appropriate. 6. onitorin(

Philippine Standard on Quality Control

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ro&ide reasona#le assurance that the policies and procedures relat in( to the s$ste! o %ualit$ control are rele&ant' ade%uate' and operatin( eecti&el$

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nor!ation to #e co!!unicated should include: •

A description o the !onitorin( procedures peror!ed.

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he conclusions drawn ro! the !onitorin( procedures.

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A description o s$ste!ic' repetiti&e or other si(niicant deiciencies and o the actions ta+en to resol&e or a!end those deiciencies. Bi rele&ant>

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Co!plaints and Alle(ations •

Failure to co!pl$ with proessional standards and applica#le le(al and re(ulator$ re%uire!ents

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Alle(ations o non4co!pliance with the ir!s s$ste! o %ualit$ control

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ir! shall esta#lish clearl$ deined channels or ir! personnel to raise an$ concerns in a !anner that ena#les the! to co!e orward without ear  o reprisals