Why is quality control needed in auditing?

 


The main objective of the auditor is to obtain reasonable assurance that the financial statements are free from material misstatement and are prepared, in all material respects, in accordance with an applicable financial reporting framework. To achieve this objective the audit work should be done in accordance with corresponding rules and standards at proper quality level.


To do this, companies establish policies and procedures that ensure the functioning of the working environment of the company and each project individually at a high-quality level.

 Saying in another words, quality control system aims at two things:

1.           An audit company.

2.           Each assignment that auditors carry out (for example, audit of financial statements).

As for audit company, quality control at company level is set up by doing following steps:

·        A person responsible for the quality control -partner or manager to be appointed. This person will be in charge for everything that relates to quality control system in a company (setting and documenting the quality control procedures, making sure that staff is trained in these procedures, monitoring quality and correct deficiencies, disciplining those who do bad quality job, making cold review of audit files after the work is done).

·        Policies and procedures of quality control are designed and documented.

·        Staff are trained in these procedures and policies.

·        Monitoring of quality control, highlighting and correcting deficiencies are established.  

About quality control at company level see here   

As for each assignment that the auditors perform:

·         Measures are being introduced to ensure that the audit team is directed, monitored, and their work is reviewed. The work of the audit team is carefully planned, documented, and allocated in accordance with skills, experience, seniority.

·        For high-risk clients, companies listed on the stock exchange, new clients, a quality control review is established by a quality control review before signing an audit report.

About the quality control of the audit of financial statements, see here


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