The document discusses Standard on Quality Control (SQC) 1, which applies to all firms that perform audits, reviews, and other assurance and related services engagements. SQC 1 requires firms to establish a system of quality control with six key elements: leadership responsibilities, ethical requirements including independence, client acceptance and continuance, human resource management, engagement performance, and monitoring. It describes the policies and procedures firms must implement under each element to maintain quality in service engagements. The document also briefly outlines the peer review process where another professional evaluates a firm's quality control system and attestation work.

1. SQC
Standard on Quality Control
- Vakharia Vaibhav A.

2. Other Assurance
Services
Framework of Assurance
Engagement
Related
Services
Assurance
Services
SQC
Standards on
Quality Control
[1 to 90]
Assurance
Services
Audit & Review of Historical
Financial Information
SA
Standards on
Auditing
[100 to 900]
SAE
Standards on
Assurance
Engagements
[3000 to 3699]
SRS
Standards on
Related
services
[4000 to 4699]
Related
Services
Structure of Standards issued by AASB
Other Assurance
Services
SRE
Standards on
Review
Engagement
[2000 to 2699]
Framework of Assurance
Engagement

3. Assurance
Engagement
Related Engagement
SA, SRE & SAE SRS
SQC

4. SQC 1
SQC-1 : Quality Control for Firms that perform Audits
& Reviews of Historical Financial Information and
Other Assurance & Related Services Engagements

5. Applicability
● applies to all firms
● in respect of services falling under the
Engagement Standards issued by AASB
● w.e.f. 01/04/2009

6. Factors for Applicability
Nature of the policies and procedures
developed by firms to comply with SQC 1
will depend on various factors such as:
● size,
● operating characteristics of the firm, and
● whether it is part of a network or not

7. Elements of Quality Control System
1. Leadership responsibilities
2. Ethical requirements incl. Independence
3. Client acceptance / continuance criteria
4. Human resource management
5. Engagement performance
6. Monitoring process

8. 1. Leadership responsibilities for quality
- Establishment of policies & procedures to:
i. Promote culture of quality within firm
ii. Ensure that commercial considerations do
not override quality
iii. Demonstrate overall commitment to
quality
- Managing Partner / CEO should assume ultimate
responsibility for implementation of above policies
& procedures

9. 2. Ethical requirements
- Requirements as per Code of Ethics:
i. Integrity
ii. Objectivity
iii. Professional competence & due care
iv. Confidentiality
v. Professional Behaviour
- Set up internal procedures for ethical compliance

10. Threats to independence
- Principal threats to independence:
i. Self - interest threat
ii. Self - review threat
iii. Advocacy threat
iv. Familiarity threat
v. Intimidation threat
- Withdrawal if any threat to independence
- Written confirmations to maintain independence

11. Safeguards to demonstrate independence
- Effective safeguards to eliminate following risks:
i. Financial interest
ii. Employment relationship
iii. Business relationship
iv. Long association
v. Gifts / Hospitality
vi. Significant earnings
vii. Conflict of interest

12. 3. Acceptance & continuance of client relationship
- Criteria of client's relationship should encompass:
i. Client's integrity
ii. Firm's competence to perform engagement
iii. Ethical restraints
- Obtain understanding for services to be performed.
- Documentation of issued raised & solutions thereof.
- Policies & procedures w.r.t. acceptance / continuance /
withdrawal from any engagement.

13. 4. Human resource management
- Steps taken while hiring personnel.
- Processes to determine appropriateness of the
engagement team.
- Considerations taken while assigning responsibility
to any partner / professional.

14. 5. Engagement performance
- Establish policies / procedures to comply with:
i. Professional standards
ii. Laws & regulations
- Essential elements of engagement performance:
i. Time frame for engagement
ii. Review & supervision
iii. Consultation
iv. Engagement quality control review
v. Documentation

15. Engagement quality control review
- Engagement quality control review involves review:
i. by other partner of firm, or
ii. by a technical expert
- Important aspects for qulaity control review :
i. Criteria for engaging QC reviewer
ii. Nature, timing & extent of QCR
iii. Documentation

16. 6. Monitoring
- Monitoring procedure should reasonably assure
that Quality Control policies & procedures are:
i. Relevant
ii. Adequate
iii. Operating efficiently
iv. Complied with in practice
- Selective inspection of completed engagements.
- Communicating deficiencies & recommendations.
- Adequate documentation to ensure monitoring.

17. Peer Review
Peer Review means review of work done by a
professional, by another professional of
similar standing.

18. - Submission of duly filled in Questionnaire
- Notes on policies & procedures followed for:
i. Maintaining independence
ii. Carrying out assurance services
iii. Second person review
iv. Staff supervision & development
- Review of attestation work:
i. List of clients
ii. Selection of samples
iii. Review of samples
- Report to Peer Review Board
- Certificate of Peer Review
Process of Peer Review

19. - Statement on Peer Review
- Code of Ethics
- Guidance Note on Independence
- Implementation guide to SQC
Resources for Peer Review

20. Thank You
- Vaibhav