Page 45 - Internal Auditing Standards

Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities Volume 1—Core Concepts

Hindrance Description
Unwillingness to Conducting a quality audit is dependent on retaining qualified and competent

Invest in Training people to perform the work. This requires ongoing professional development and
or Development performance appraisals for all partners and professional staff (every period). Lack of

investment in staff also leads to staff turnover.
Lack of Discipline A failure to discipline partners or staff when the firm’s policies are contravened sends

a very clear message to personnel that written policies are really not that important.

This undermines compliance with all of the firm’s policies, and increases the risk to
the fi rm.

A healthy tone at the top can be set by the firm’s management and engagement partners through the
activities outlined below.
Exhibit 4.3-2

Setting the Tone Description
Establish the This could include:
Firm’s Objectives, • An unwavering commitment to quality and high ethical standards;
Priorities, and • Investment in staff’s learning, training, and skills development;

Values
• Investment in the required technological, human, and fi nancial resources;
• Policies to ensure sound engagement and fiscal management; and

• Risk tolerances for use in decision-making.
Communicate Reinforce the firm’s values and commitments by communicating regularly

Regularly (verbally and in writing) with staff. Communications would address the need for

integrity, objectivity, independence, professional skepticism, staff development,
and accountability to the public. Communications could be made through the

performance-appraisal system, partner updates, emails, office meetings, and internal
newsletters.
Update the Each period, update the firm’s quality control policies and procedures to address

Quality Control weaknesses and any new requirements.
Manual
Hold People Assign clear responsibilities and accountabilities for quality-control functions (such as
Accountable independence issues, consultation, file review, etc.).

Develop Staff Develop staff through:
Competence and • Clear job descriptions and documented annual performance appraisals that
Reward Quality make quality of work a priority;
Work
• Providing incentives/rewards for delivering quality work; and
• Taking disciplinary action when the firm’s policies are contravened.

Continually Take prompt action to correct deficiencies when identified, such as through the

Improve firm’s engagement file monitoring, including the cyclical inspection of completed

engagement fi les.
Set an Example Provide staff with a role model in the positive example set by partners in their day-

to-day behavior. For example, if a policy emphasizes the need for quality work, a staff
member should then not be criticized for legitimately going over the budgeted time.

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