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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Quality management (firm and engagement level)

Quill Audit's engagement partner on a client assignment learns that a senior team member has serious concerns about the client's revenue recognition but has been told by a manager to keep quiet to protect the fee relationship. Which aspect of ISQM 1's information and communication component is most directly undermined?

The firm must support open communication so that personnel can raise concerns, including about quality, without fear of reprisal. A manager silencing a team member to protect fees undermines this ISQM 1 information and communication requirement, as well as the firm's quality-focused culture.

  1. AThe requirement to obtain written consent from the client before consultation
  2. BThe requirement for the firm to establish an environment that supports and encourages open communication, including raising concerns without reprisalCorrect
  3. CThe requirement to rotate the engagement partner after seven years
  4. DThe requirement to issue a management letter at every interim audit

Explanation

ISQM 1 requires the firm to establish a culture of open, two-way communication within the firm and with engagement teams, and to enable people to raise concerns. Suppressing a concern for commercial reasons conflicts with that. Rotation, management letters and client consent for consultation are unrelated.

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