This document provides an overview and summary of ISQC 1 for small and medium accounting practices. It discusses the objective of ISQC 1, which is for firms and personnel to comply with professional standards and regulations and issue appropriate reports. It outlines the key elements that must be included in a system of quality control, including leadership responsibilities, ethical requirements, client acceptance, human resources, engagement performance, and monitoring. It emphasizes that the nature and extent of policies and procedures will depend on the size and characteristics of the firm. It also notes that the firm must document its quality control system and policies and communicate them to personnel.

1. I S Q C 1
Implementation for
Small & Medium Practices
Charles A Egan
Consultant / Head Reviewer
Quality Assurance Monitoring
ICAG

2. Agenda
ISQC 1
Objective
Elements of a System of
Quality Control
Documentation of the
System of Quality Control
Pulling it together

3. International Standard on Quality Control 1 (redrafted)
• This ISQC applies to all firms of professional accountants in
respect of audits and reviews of financial statements, and
other assurance and related services engagements.
• The nature and extent of the policies and procedures
developed by an individual firm to comply with this ISQC will
depend on factors such as the size and operating
characteristics of the firm, and whether it is part of a
network or not. ( Para 4)

4. Objective
• (a) The firm and its personnel comply with professional
standards and regulatory and legal requirements; and
• (b) Reports issued by the firm or engagement partners are
appropriate in the circumstances.
NB// This ISQC does not call for compliance with requirements
that are not relevant. (see A1) External qualified person or
another firm may be considered

5. Elements of a system of Quality Control
(paras 16-17)
• Leadership responsibilities for quality within the firm (18-19)
• Relevant ethical requirements (20-25)
•Acceptance and continuance of client relationships and specific
engagements (26-28)
•Human resources (29-31)
•Engagement performance (32-47)
• Monitoring (48-56)
The firm shall document its Policies and procedures and
communicate them to the firm’s personnel.

6. Documentation of the System of Quality
Control (Paras 57 -59)
The firm shall establish policies and procedures:
• requiring appropriate documentation to provide evidence of
the operation of each element of its system of quality
control. (para 57)
• that require retention of documentation for a period of time
sufficient to permit those performing monitoring procedures
to evaluate the firm's compliance with its system of quality
control, or for a longer period if required by law or
regulation. (para 58)
• documentation of complaints and allegations and the
responses to them. (para 59)

7. • ISQC 1 Checklist
• Risk and Control Schedule
Documentation of the System of Quality
Control (Paras 57 -59) cont’d

8. Pulling them together
• Documentation
• Testing (design & operating effectiveness)
• Remediation plan
Difficulties encountered
• Grossly underestimated time
commitments
• Availability of relevant individuals
• Challenges of wearing so many hats
• Resource constraints

9. Thank You
Questions?
Comments?