BRIEF OVERVIEW OF AUDITING STANDARDS IN INDIA :
STANDARDS ON QUALITY CONTROL (SQCS)
SQC 1: Quality control for firms that perform audits and reviews of historical financial information, and other assurance and related services engagements
Objective of SQC–1 is to provide the firm with reasonable assurance that its personnel comply with applicable
professional standards as well as regulatory and legal requirements, and that reports issued by the firm or
engagement partner(s) are appropriate in the circumstances
Elements of System of Quality Control
It is a primary standard which have applications for all other Standards and is all pervasive Standards in respect of quality control. This standard contains extensive requirements in relation to establishment and maintenance of a system of quality control (QC) for an auditing entity.
This standards describes the important elements of quality control system as
Leadership responsibilities for quality within the firm: The firm should establish policies and procedures designed to promote an internal culture based on recognition that quality is essential in performing engagements.
Ethical requirements: The firm should establish policies and procedures designed to provide it with reasonable
assurance that the firm and its personnel comply with relevant ethical requirements
Acceptance and continuance of client relationships and specific engagements: The acceptance and continuance of Quality Control policies are designed to provide the firm with reasonable assurance that it will undertake or continue relationships and engagements only where it: (a) has considered the integrity of the client and does not have information that would lead it to conclude that the client lacks integrity; (b) is competent to perform the engagement and has the capabilities, time and resources to do so (c) can comply with the ethical requirements.
Human resources: The Firm’s policies and procedures should be designed to provide it with reasonable assurance that it has sufficient personnel with the capabilities, competence, and commitment to ethical principles necessary to perform its engagements in accordance with professional standards and regulatory and legal requirements to enable the Firm or engagement partners to issue reports that are appropriate in the circumstances
Monitoring: The firm should establish policies and procedures designed to provide it with reasonable assurance
that the policies and procedures relating to the system of quality control are relevant, adequate, operating
effectively and complied with in practice.