Quality Control at Engagement Level - ISA 220
The objectives of the project are to:
(a) Propose revisions to ISA 220 to strengthen aspects of quality management for individual engagements by focusing on the identification, assessment and response to quality risks in a broad range of engagement circumstances.
(b) Propose consequential amendments to other standards that may be necessary as a result of revisions to ISA 220.
(c) Determine whether non-authoritative guidance and support tools should be developed by the IAASB or others to supplement the revisions or new standard(s).
The IAASB commenced its initial information gathering on the topic of quality control in June 2014 with a Working Group being formed in October 2014. The issues identified and discussed at the IAASB meetings are part of the Invitation to Comment on Enhancing Audit Quality in the Public Interest which was issued in December 2015. The Working Group will use the comments received on the Invitation to Comment as a basis for the project proposal which is scheduled to be discussed in December 2016.**
** Together with the ISQC 1-Quality Control at the Firm Level, ISA 600-Group Audits and Professional Skepticism projects, this project is part of the Audit Quality Enhancements Coordination Group (AQECG). The AQECG intends to coordinate the various inputs to the invitation to comment developed at the individual working group level, and take a holistic approach as to how the matters are presented in one invitation to comment.
MEETING HIGHLIGHTS - JUNE 2017
Quality Control – Engagement Level
The IAASB discussed proposed changes to the requirements in ISA 220. Although some aspects of the changes were supported by the IAASB, such as strengthening the engagement partner’s leadership responsibilities for the engagement, and the consideration of all resources relevant to an engagement, the Board highlighted that many of the changes, as currently drafted, would likely be difficult to implement in practice. The Board also added that it would be difficult to demonstrate compliance with some of the new proposed requirements.
The Board encouraged the ISA 220 Task Force to focus its efforts on changes that would enhance audit quality through refocusing the engagement partner’s efforts, or involvement, on areas of high-risk in the audit (i.e., where the issues are complex and require more judgment) and to further consider the way that quality management could be built into some of the other elements of ISA 220 as appropriate.