Page 62 - AAA Integrated Workbook STUDENT S18-J19

Chapter 5

1.2 Key principles

ISQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial
Statements, and Other Assurance and Related Services Engagements identifies six
key principles of quality control at the firm level:

 Leadership: Strong and ethical leadership demonstrated by the managing
partners.

 Ethical requirements: Firms comply with ethical requirements such as the
Code of Ethics.

 Acceptance and continuance: Only suitable clients and engagements are
accepted and retained.

 Human resources: A firm and its employees have the necessary knowledge,
technical competence, and experience.

 Engagement performance: Engagements are performed in an effective
manner.

 Monitoring: Evaluating the quality control procedures to ensure they are
effective.

Ethical considerations and arrangements for the acceptance and continuance of
client relationships and specific engagements are covered in chapters 3 and 6
respectively.

In this chapter we will focus on the remaining four key principles.

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