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

Rao & Co. has issued a quality control manual to all staff. A senior associate, Priya, has doubts about how the firm's policies are applied on a client engagement and asks whether she should raise them. Which view is consistent with SQC 1?

The firm should document and communicate its quality control policies, stress that every individual has personal responsibility for quality and must comply, and encourage personnel to voice their views or concerns on quality control matters. Priya is therefore expected to raise her doubts within the firm.

  1. AShe should stay silent because quality control is solely the responsibility of the engagement partner
  2. BThe firm should communicate its policies and objectives, include the message that each individual has personal responsibility for quality, and encourage personnel to communicate their views or concerns on quality control mattersCorrect
  3. CShe may raise concerns only with the client's management
  4. DThe firm need not document or communicate its quality control policies if the staff are qualified

Explanation

SQC 1 requires quality control policies and procedures to be documented and communicated to personnel, including the message that each individual has personal responsibility for quality and must comply. The firm also recognises the importance of feedback and encourages personnel to communicate views or concerns on quality control matters. Option A contradicts the personal responsibility message.

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