{"id":1263,"date":"2023-05-17T05:50:29","date_gmt":"2023-05-17T05:50:29","guid":{"rendered":"http:\/\/www.rnm.in\/blog\/?p=1263"},"modified":"2025-10-04T09:19:52","modified_gmt":"2025-10-04T09:19:52","slug":"standard-on-quality-control-sqc-1","status":"publish","type":"post","link":"https:\/\/www.rnm.in\/blog\/standard-on-quality-control-sqc-1\/","title":{"rendered":"STANDARD ON QUALITY CONTROL (SQC-1)"},"content":{"rendered":"\r\n

Introduction:<\/strong><\/p>\r\n\r\n\r\n\r\n

The purpose of this Standard on Quality Control (SQC) is to establish standards and provide guidance regarding a firm\u2019s responsibilities for its system of quality control for audits and reviews of historical financial information, and for other assurance and related services engagements. This SQC is to be read in conjunction with the requirements of the Chartered Accountants Act, 1949, the Code of Ethics and other relevant pronouncements of the Institute1 (hereinafter referred to as \u201cthe Code\u201d).<\/p>\r\n\r\n\r\n\r\n

The firm should establish a system of quality control designed to provide it with reasonable assurance that the firm and its personnel comply with professional standards and regulatory and legal requirements, and that reports issued by the firm or engagement partner(s) are appropriate in the circumstances.<\/p>\r\n\r\n\r\n\r\n

What is Engagement documentation?<\/strong><\/p>\r\n\r\n\r\n\r\n

The record of work performed, results obtained, and conclusions the practitioner reached (terms such as \u201cworking papers\u201d or \u201cworkpapers\u201d are also sometimes used). The documentation for a specific engagement is assembled in an engagement file;<\/p>\r\n\r\n\r\n\r\n

What is Engagement quality control review?<\/strong><\/p>\r\n\r\n\r\n\r\n

It is a process designed to provide an objective evaluation, before the report is issued, of the significant judgments the engagement team made and the conclusions they reached in formulating the report.<\/p>\r\n\r\n\r\n\r\n

Who can be an Engagement quality control reviewer?<\/strong><\/p>\r\n\r\n\r\n\r\n

A partner, other person in the firm, suitably qualified external person, or a team made up of such individuals, with sufficient and appropriate experience and authority to objectively evaluate, before the report is issued, the significant judgments the engagement team made and the conclusions they reached in formulating the report. However, in case the review is done by a team of individuals, such team should be headed by a member of the Institute.<\/p>\r\n\r\n\r\n\r\n

What constitutes an Engagement team?<\/strong><\/p>\r\n\r\n\r\n\r\n

All personnel performing an engagement, including any experts contracted by the firm in connection with that engagement. The term \u201cengagement team\u201d excludes individuals within the client\u2019s internal audit function who provide direct assistance on an audit engagement when the external auditor complies with the requirements of SA 610 (Revised).<\/p>\r\n\r\n\r\n\r\n

What are the Ethical Requirements of SQC-1<\/strong><\/p>\r\n\r\n\r\n\r\n

This SQC requires the firm to establish policies and procedures to enable it to ensure that the firm and its personnel comply with ethical requirements:<\/p>\r\n\r\n\r\n\r\n