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ACCA Strategic Professional · Advanced Audit and Assurance (International) · International regulatory frameworks for audit and assurance services

An independent audit oversight body in Country Q inspects Brava LLP and finds that engagement quality reviews on listed audits were frequently performed after the audit report was dated. Which feature of an independent oversight regime does this finding best illustrate?

This illustrates the inspection function of an audit oversight body. Inspectors review firms and selected engagements to assess audit quality and compliance with standards, such as the timing of engagement quality reviews, and can require remedial action, rather than setting standards, fees or appointments.

  1. AInspection of firms to assess audit quality and compliance with standardsCorrect
  2. BSetting of the ISAs applied by firms
  3. CApproval of audit fees charged to clients
  4. DAppointment of auditors to listed companies

Explanation

Audit oversight bodies commonly carry out inspections of firms and engagements, assessing compliance with standards and quality management requirements, and may impose follow-up actions. Setting standards, approving fees or appointing auditors are not what an inspection finding represents.

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