There is no doubt to the fact that auditing has exponentially grown in importance over the course of time. This is predominantly because of the role of auditor in establishing a bridge of trust between the company and the general public, mainly investors.
However, the extent to which this bridge is strong and concrete depends on the quality parameters of the underlying audit. The overall efficacy of the audit process is directly contingent on and related to the quality protocols followed by the auditors in the due process. Hence, in this regard, the importance of quality within the realm of audit cannot be ignored.
Quality Control Review can be defined as a process that is designed to provide an objective evaluation and certainty that quality parameters are deeply embedded into the accounting and auditing practice. In this regard, the firm has the responsibility to ensure that its personnel complies with the existing professional standards that are applicable to its accounting and auditing practice.
The main objective of this review is, therefore, to objectify if the system of quality control is broadly and deeply embedded into the process and if the personnel complies with it, in addition to the applicable professional standards, as well as the firms standards of quality.
Elements of Quality Control Review
The underlying elements of control review include parameters that directly influence the SOPs that are followed during the audit process. Therefore, in this regard, there is a need to ensure that the following elements have been inculcated into the peer review accounting, including the following:
- Independence, Integrity, and Objectivity: The existing policies should reflect the inclusion of an independent, and integral within the firm so that there is proper inclusion of these parameters. This is going to reflect on the service that they provide.
- Personnel Management: The underlying personnel management tends to be an important factor, because of the fact that personnel and employees need to be on board with the quality parameters that are being followed within the organization. This is going to enable them to apply it in their services.
- Acceptance and Continuing Clients and engagements: This is another fundamental parameter of the review because it hints towards the assessment that the company makes when signing on with clients. For example, they need to be sure that they engage in contracts which they know they can fulfill over the course of time. In the same manner, they should also be able to factor in risks associated with providing services when it comes to particular clients.
- Engagement performance: The quality aspects that need to be factored in when it comes to quality control review is based on gathering reasonable assurance that all design and execution of the engagement.
- Monitoring: This is another quality parameter that needs to be reviewed when it comes to ensuring that all the processes have adequately been covered in accordance with the designed policies and procedures.
Importance of Quality Control Review
The importance of quality control review can be gauged from the fact that it ensures that the desired service protocols are achieved. In this regard, it can be seen that quality control review is based on determining the areas of improvement, and setting higher thresholds so that quality can consistently be improved over the course of time.
Therefore, it can be seen that quality control review helps to ascertain that the firm is providing services in accordance to the standards. This assurance can help companies to create credibility and accountability when it comes to facilitating their clients, as well as invoking a sense of trust with the general public that services have been carried out in an effective manner.
Furthermore, it can also be seen that quality control review tends to add further integrity to the process so that the users of the financial statements can rely on the process with a greater degree of assurance that all quality parameters have subsequently been fulfilled.
Quality Control Review can simply be regarded as a process which enables companies to properly investigate issues pertaining to quality adherence within their operations. It tends to be an integral part of the auditing process, because it helps the users to easily determine the areas that need to be worked on in the future, in addition to the possibility of some of the parameters not working out.
Hence, this is something that addresses some of the very genuine concerns about quality when it comes to service delivery, and therefore, it simply adds credibility to the overall system in place.