ISQC

International Standards on Quality Control

Standards issued by the International Auditing and Assurance Standards Board (IAASB) to provide guidance on an audit firm’s responsibilities regarding its quality control system for audits and reviews of financial statements and other assurance and related services engagements. Key points about ISQC:

1. Objective: ISQC’s main objective is to establish and maintain a system of quality control that provides reasonable assurance that the firm and its personnel comply with professional standards and applicable legal and regulatory requirements and that the reports issued by the firm or engagement partners are appropriate in the circumstances.
2. Scope: ISQC 1, the primary standard in this series, applies to all firms performing audits and reviews of financial statements, and other assurance and related services engagements.
3. Elements: ISQC 1 outlines six key elements of a firm’s system of quality control:
   • Leadership responsibilities for quality within the firm
   • Relevant ethical requirements
   • Acceptance and continuance of client relationships and specific engagements
   • Human resources
   • Engagement performance
   • Monitoring
4. Responsibility: The audit firm’s leadership is responsible for establishing and maintaining its quality control system, ensuring that it is operating effectively, and promoting a quality culture throughout the firm.
5. Documentation: ISQC 1 requires firms to document their policies and procedures related to their system of quality control and provide evidence of the operation of each element of the system.
6. Interaction with ISAs: ISQC 1 works in conjunction with International Standards on Auditing (ISAs) to ensure that audits are conducted according to high-quality standards and that audit firms have the necessary policies and procedures to support this objective.

ISQC plays a crucial role in promoting consistency and quality in the work performed by audit firms globally, enhancing the credibility and reliability of the audit profession and the financial reporting process.

• Abbreviation: ISQC