ACCA Strategic Professional · Advanced Audit and Assurance (International) · International regulatory frameworks for audit and assurance services
Brightwater & Partners is reviewing how ISAs, the IESBA Code and quality management standards interact. Which statement about the relationship between these is correct?
ISQM 1 requires every firm performing audits, reviews or other assurance engagements to design and operate a system of quality management, including ethical requirements, while ISA 220 (Revised) deals with quality management at engagement level led by the engagement partner. It is not limited to listed-entity auditors.
- AISQM 1 requires firms to design a system of quality management that includes responding to relevant ethical requirements, while ISA 220 deals with the engagement partner's responsibility for quality at engagement levelCorrect
- BISA 220 applies at firm level and ISQM 1 applies only to individual engagements
- CThe IESBA Code replaces the need for a system of quality management where the firm audits only unlisted entities
- DISQM 1 applies only to firms that audit listed entities
Explanation
ISQM 1 covers the firm's system of quality management, including relevant ethical requirements, and applies to all firms performing audits or reviews, or other assurance or related services engagements. ISA 220 (Revised) addresses quality management at engagement level. The other options reverse the levels or wrongly limit scope.
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