Academic journal article Journal of Accountancy

Official Releases

Academic journal article Journal of Accountancy

Official Releases

Article excerpt

Statement on Quality Control Standards Nos. 4 and 5 ... SOP 00-1 ... Audit Interpretations ... Ethics Interpretation Statement on Quality Control Standards No. 4--System of Quality Control for a CPA Firm's Accounting and Auditing Practice

(Amends Statement on Quality Control Standards No. 2, System of Quality Control for a CPA Firm's Accounting and Auditing Practice, AICPA, Professional Standards, vol. 2, QC sec. 20.)

18. Policies and procedures for Engagement Performance encompass all phases of the design and execution of the engagement. To the extent appropriate and as required by applicable professional standards, these policies and procedures should cover planning, performing, supervising, reviewing, documenting, and communicating the results of each engagement. Where applicable, these policies and procedures should also address the concurring partner review requirements applicable to SEC engagements as set forth in membership requirements of the SEC Practice Section of the American Institute of Certified Public Accountants (AICPA).

EFFECTIVE DATE

26. The amendment to paragraph 18 promulgated by this Statement on Quality Control Standards is applicable to a CPA firm's system of quality control for its accounting, auditing, and attestation practice as of January 1, 2000.

This Statement entitled System of Quality Control for a CPA Firm's Accounting and Auditing Practice was adopted unanimously by the fifteen members of the board.

Auditing Standards Board (1999-2000)

Deborah D. Lambert, Chair
James S. Gerson, Vice-Chair
John Barnum
Andrew J. Capelli
Linda K. Cheatham
Robert E Dacey
Richard Dieter
Sally L. Hoffman
J. Michael Inzina
Charles E. Landes
W. Scott McDonald
Keith O. Newton
Robert C. Steiner
George H. Tucker III
O. Ray Whittington

Arleen R. Thomas, Vice-President,
  Professional Standards and Services
Thomas Ray, Director, Audit and Attest Standards

Joint Task Force on Quality Control Standards--Accounting and Auditing (1998-1999)

Barry Barber, Chair
Robert E. Fleming
Lester L. Fordham
Charles E. Landes
Richard L. Miller
Ray Roberts

Susan S. Coffey, Vice-President,
  Self-Regulation and SECPS
David Brumbeloe, Director, SEC Practice Section

The Board gratefully acknowledges the Joint Task Force on Quality Control Standards and the SEC Practice Section Task Force on Concurring Partner Review for their significant contributions.

Note: Statements on Quality Control Standards are issued by the Auditing Standards Board. Firms that are enrolled in an Institute-approved practice-monitoring program are obligated to adhere to quality control standards established by the Institute.

Statement on Quality Control Standards No. 5--The Personnel Management Element of a Firm's System of Quality Control--Competencies Required by a Practitioner-in-Charge of an Attest Engagement

INTRODUCTION

1. Statement on Quality Control Standards (SQCS) No. 2, System of Quality Control for a CPA Firm's Accounting and Auditing Practice (AICPA, Professional Standards, vol. 2, QC sec. 20), provides that a CPA firm shall have a system of quality control for its accounting and auditing practice(1) that should encompass the following elements:

a. Independence, integrity, and objectivity

b. Personnel management

c. Acceptance and continuance of clients and engagements

d. Engagement performance

e. Monitoring

THE PERSONNEL MANAGEMENT ELEMENT OF QUALITY CONTROL

2. Personnel Management encompasses hiring, assigning personnel to engagements, professional development, and advancement activities. Accordingly, policies, and procedures should be established to provide the firm with reasonable assurance that--

a. Those hired possess the appropriate characteristics to enable them to perform competently. Examples of such characteristics may include meeting minimum academic requirements established by the firm, maturity, integrity, and leadership traits. …

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