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CA Final · Advanced Auditing, Assurance and Professional Ethics · Quality Control

A partner of Desai & Co. says the firm's quality control policies are internal documents and need not be shared with staff, who only need to follow the audit programme on their assignments. Which view is consistent with SQC 1?

The partner's view is incorrect. SQC 1 requires quality control policies and procedures to be documented and communicated to all firm personnel, including the message that every individual has personal responsibility for quality and must comply, and the firm should encourage staff to raise quality control concerns.

  1. ACorrect, as only partners are responsible for quality control
  2. BIncorrect, because policies must be documented and communicated to personnel, stressing each individual's personal responsibility for qualityCorrect
  3. CCorrect, provided the policies are communicated only when a staff member is promoted
  4. DIncorrect, but only for staff working on listed entity audits

Explanation

SQC 1 requires quality control policies and procedures to be documented and communicated to the firm's personnel. The communication describes the policies and their objectives and includes the message that each individual has a personal responsibility for quality and must comply. The firm should also encourage personnel to voice views or concerns on quality control matters.

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