Document ID: chunk:federal_register_of_legislation:F2021C01259:reg:11:p8
Version: federal_register_of_legislation:F2021C01259
Segment Type: reg
Provision Reference: reg 11 (pt 8/16)
Character Range: 29265–32577

(c)                The reviewer is not aware of any unresolved matters that would cause the reviewer to believe that the significant judgements the engagement team made and the conclusions it reached were not appropriate.

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Application and Other Explanatory Material

System of Quality Control and Role of Engagement Teams (Ref: Para. 2)

A1.             ASQC 1 deals with the firm's responsibilities to establish and maintain its system of quality control for audit engagements.  The system of quality control includes policies and procedures that address each of the following elements:

           * Leadership responsibilities for quality within the firm;

           * Relevant ethical requirements;

           * Acceptance and continuance of client relationships and specific engagements;

           * Human resources;

           * Engagement performance; and

           * Monitoring.

    ASQC 1 contains requirements which are at least as demanding as its international equivalent, ISQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements[*], as it addresses all the elements referred to in ISQC 1 and imposes obligations on the firm that achieve the aims of the requirements set out in ISQC 1.

Reliance on the Firm's System of Quality Control (Ref: Para. 4)

A2.             Unless information provided by the firm or other parties suggest otherwise, the engagement team may rely on the firm's system of quality control in relation to, for example:

           * Competence of personnel through their recruitment and formal training.

           * Independence through the accumulation and communication of relevant independence information.

           * Maintenance of client relationships through acceptance and continuance systems.

           * Adherence to applicable legal and regulatory requirements through the monitoring process.

Aus A2.1 Notwithstanding reliance by the engagement team on the firm's system of quality control, for audits undertaken in accordance with the Corporations Act 2001 (the Act), the engagement partner is required to comply with the auditing standards under section 307A of that Act.

Leadership Responsibilities for Quality on Audits (Ref: Para. 8)

A3.             The actions of the engagement partner and appropriate messages to the other members of the engagement team, in taking responsibility for the overall quality on each audit engagement, emphasise:

(a)                The importance to audit quality of:

(i)                 Performing work that complies with Australian Auditing Standards, relevant ethical requirements, and applicable legal and regulatory requirements;

(ii)               Complying with the firm's quality control policies and procedures as applicable;

(iii)             Issuing auditor's reports that are appropriate in the circumstances; and

(iv)             The engagement team's ability to raise concerns without fear of reprisals; and

(b)                The fact that quality is essential in performing audit engagements.

Relevant Ethical Requirements

Compliance with Relevant Ethical Requirements (Ref: Para. 9)

A4.             [Deleted by the AUASB.  Refer Aus A4.1]

Aus A4.1 The auditor is subject to relevant ethical