Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Question
Chapter 2, Problem 30HOQ
To determine
Identify the AICPA quality control standard that would likely be satisfied when a CPA firm maintains records indicating which partners or employees of the firm were previously employed by the CPA firm’s clients.
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Which of the following elements of a system of quality control is related to firms receiving independence confirmations from its professionals with respect to clients?a. Acceptance and continuance of client relationships and specific engagements.b. Engagement performance.c. Monitoring.d. Relevant ethical requirements.
For each of the following procedures taken from the quality control manual of a CPA firm, identify the applicable element of quality control from;
A. All potential new clients are reviewed before acceptance. The review includes consultation with predecessor auditors and background checks. All new clients are approved by the firm management committee, including assessing whether the firm has the technical competence to complete the engagement.
B. The partners accept responsibility for leading and promoting a quality assurance culture within the firm and for providing and maintaining a quality assurance manual and all other necessary practical aids and guidance to support engagement quality.
C. Each office of the firm shall be visited at least annually by review persons selected by the director of accounting and auditing. Procedures to be undertaken by the reviewers are illustrated by the office review program.
D. Appropriate accounting and auditing research requires adequate technical…
If you were Sarah, how would you respond to each question? For each of the following procedures taken from the quality control manual of a CPA firm, identify the applicable element of quality control from
A. All potential new clients are reviewed before acceptance. The review includes consultation with predecessor auditors and background checks. All new clients are approved by the firm management committee, including assessing whether the firm has the technical competence to complete the engagement.
B. The partners accept responsibility for leading and promoting a quality assurance culture within the firm and for providing and maintaining a quality assurance manual and all other necessary practical aids and guidance to support engagement quality.
C. Each office of the firm shall be visited at least annually by review persons selected by the director of accounting and auditing. Procedures to be undertaken by the reviewers are illustrated by the office review program.
D. Appropriate…
Chapter 2 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - Prob. 3RQCh. 2 - Prob. 4RQCh. 2 - Prob. 5RQCh. 2 - Prob. 6RQCh. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 9RQCh. 2 - Prob. 10RQ
Ch. 2 - Prob. 11RQCh. 2 - Prob. 12RQCh. 2 - Prob. 13RQCh. 2 - Prob. 14RQCh. 2 - Prob. 15RQCh. 2 - Prob. 16RQCh. 2 - Prob. 17RQCh. 2 - Prob. 18RQCh. 2 - Prob. 19RQCh. 2 - Prob. 20RQCh. 2 - Prob. 21RQCh. 2 - Prob. 22RQCh. 2 - Prob. 23RQCh. 2 - Prob. 24RQCh. 2 - Prob. 25QRACh. 2 - Prob. 26QRACh. 2 - Jane Lee, a director of a nonpublic corporation...Ch. 2 - Prob. 28QRACh. 2 - Prob. 29QRACh. 2 - Prob. 30AOQCh. 2 - Prob. 30BOQCh. 2 - Prob. 30COQCh. 2 - Prob. 30DOQCh. 2 - Prob. 30EOQCh. 2 - Prob. 30FOQCh. 2 - Prob. 30GOQCh. 2 - Prob. 30HOQCh. 2 - Prob. 30IOQCh. 2 - Prob. 30JOQCh. 2 - Prob. 30KOQCh. 2 - Prob. 30LOQCh. 2 - Prob. 31OQCh. 2 - Prob. 32OQCh. 2 - Prob. 33OQCh. 2 - Prob. 34OQCh. 2 - Prob. 35OQCh. 2 - Joe Rezzo, a college student majoring in...Ch. 2 - Prob. 37PCh. 2 - Hide-It (HI), a family-owned business based in...Ch. 2 - Prob. 39RDC
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Similar questions
- The following is an example of a CPA firm’s quality controlprocedure requirement: “Any person being considered for employment by the firm musthave completed a basic auditing course and have been interviewed and approved by anaudit partner of the firm before he or she can be hired for the audit staff.” Which elementof quality control does this procedure affect and what is the purpose of the requirement?arrow_forwardThe following questions concern quality control standards. Choosethe best response.a. The nature and extent of a CPA firm’s quality control policies and procedures dependon The CPA The Nature of the Cost-benefitFirm’s Size CPA Firm’s Practice Considerations(1) Yes Yes Yes(2) Yes Yes No(3) Yes No Yes(4) No Yes Yesb. Which of the following are elements of a CPA firm’s quality control that should beconsidered in establishing its quality control policies and procedures?Human Resources Monitoring Engagement Performance(1) Yes Yes No(2) Yes Yes Yes(3) No Yes Yes(4) Yes No Yesc . One purpose of establishing quality control policies and procedures for decidingwhether to accept a new client is to(1) enable the CPA firm to attest to the reliability of the client.(2) satisfy the CPA firm’s duty to the public concerning the acceptance of new clients.(3) provide reasonable assurance that the integrity of the client is considered.(4) anticipate before performing any field work whether an unqualified…arrow_forwardEach of the following quality control policies and procedures is typical of ones that can be found in public accounting firms’ systems of quality control. Identify each of them with one of the six elements of quality control identified by SQCS 8.a. Assign management responsibilities in such a manner that commercial considerations do not override the quality of work performed.b. Establish policies and procedures for resolving differences of opinion among firm personnel that arise during professional engagements.c. Develop policies and procedures to ensure that professionals are provided appropriate professional development opportunities.d. Review engagement documentation, reports, and the client’s financial statements.e. Develop effective performance evaluation, compensation, and advancement procedures.f. Identify circumstances and relationships that create threats to independence and take appropriate action to eliminate those threats or reduce them to an acceptable level.g. Identify…arrow_forward
- In considering whether the firm has the capabilities, competence, time and resources to undertake a new engagement from a new or an existing client, the firm reviews the specific requirements of the engagement and existing partner and staff profiles at all relevant levels. Matters the firm considers include the following, EXCEPT A. Whether firm personnel have experience with relevant regulatory or reporting requirements, or the ability to gain the necessary skills and knowledge effectively B. Whether the client is aggressively concerned with maintaining the firms fees as low as possible C.Whether the firm is able to complete the engagement within the reporting deadline D. Whether firm personnel have knowledge of relevant industries or subject mattersarrow_forwardUnderstand the role of a system of quality control and monitoring efforts in enabling public accounting firms to meet appropriate levels of professional qualityarrow_forwardPublic accounting businesses may achieve adequate professional standards only if they have an effective quality control and monitoring system in place.arrow_forward
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