Introduction
Quality is the backbone of any audit. SA 220 focuses on ensuring that every audit engagement is performed with due care, competence, and compliance. It guides auditors on how to apply quality control policies at the individual audit level, while aligning with the firm’s overall quality framework.
Objective of SA 220
The primary objective of SA 220 is to implement quality control policies and procedures in a way that ensures all audits are conducted in accordance with Standards on Auditing (SAs) and relevant professional requirements.
In other words, the standard ensures that audit quality is not accidental but systematically planned and executed.
Quality Control Policies and Procedures
Quality control policies and procedures operate at two levels:
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Firm level, and
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Individual audit engagement level.
While the firm establishes overall quality standards, the engagement partner ensures that these policies are properly applied to each specific audit.
Objectives of Quality Control Policies
Quality control policies are designed to achieve multiple objectives. Specifically, they ensure:
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Compliance with professional requirements
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Adequate skills and professional competence of audit personnel
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Proper assignment of audit work
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Effective delegation of responsibilities
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Timely consultation on complex or significant matters
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Appropriate acceptance and retention of clients
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Continuous monitoring of audit quality
Thus, these objectives collectively safeguard the reliability and credibility of the audit process.
Communication of Quality Control Policies
Effective policies are useful only when people understand and apply them. Therefore, the audit firm must clearly communicate quality control policies and procedures to all personnel.
Such communication should provide reasonable assurance that team members:
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Understand the policies, and
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Consistently implement them in practice.
Implementation of Quality Control Procedures
At the engagement level, the auditor must implement quality control procedures that are appropriate to the specific audit.
While doing so, the auditor should:
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Assess the professional competence of assistants, and
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Decide the extent of direction, supervision, and review required.
As a result, audit work remains consistent with both firm policies and auditing standards.
Direction, Supervision, and Review
To maintain audit quality, the auditor must actively ensure that:
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Work delegated to assistants is properly performed
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Clear direction is provided before the work begins
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Adequate supervision continues during the audit
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Audit work is reviewed after completion
Consequently, these steps help confirm that the audit progresses in line with Standards on Auditing.
Conclusion
In conclusion, SA 220 plays a crucial role in maintaining audit quality at the engagement level. It ensures that quality control policies are not merely documented but are effectively implemented.
By emphasizing direction, supervision, review, and competence, SA 220 strengthens the auditor’s responsibility to deliver high-quality, compliant, and reliable audit reports.