PHILIPPINE STANDARDS ON QUALITY CONTROL

Introduction to PSQC

In the Philippines, who is responsible for the establishment and promulgation of

standards of quality control firms should follow in all of their engagements?
It is the Auditing and Assurance Services Council (AASC) created by the
Professional Regulation Commission (PRC) upon the recommendation of Board of Accountancy
(BOA).

How are the standards on quality control created?

It is the stated policy of the AASC to make the International Standards and Practice
Statements issued by the IAASB the applicable standards and practice statements in the
Philippines. In this connection, to facilitate their implementation in the Philippines, the
International Standards and Practice Statements are made Philippine-specific and are
described as “Philippine standards and practice statements”.

What is the purpose of PSQC?

Establish basic principles and essential procedures and to provide guidance regarding a
firm’s responsibilities for its system of quality control for audits and reviews of historical financial
information, and for other assurance and related services engagements. This PSQC is to be
read in conjunction with Parts A and B of the Code of Ethics for Professional Accountants in the
Philippines (the Philippine Code).

What is the objective a system of quality control?

The firm should establish a system of quality control designed to provide it with
reasonable assurance that the firm and its personnel comply with professional standards
and regulatory and legal requirements, and that reports issued by the firm or
engagement partners are appropriate in the circumstances.

What is a system of quality control?

It consists of policies designed to achieve the above objectives and the procedures
necessary to implement and monitor compliance with those policies.

To whom PSQC applies?

The PSQC applies to all firms, whether a sole practitioner or partnership or other entity
of professional accountants. The nature of the policies and procedures developed by individual
firms to comply with this PSQC will depend on various factors such as the size and operating
characteristics of the firm, and whether it is part of a network.

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What are the elements of a system of quality control?
The elements of a system of quality control are:
a. Leadership responsibilities for quality within the firm.
b. Ethical requirements.
c. Acceptance and continuance of client relationships and specific engagements.
d. Human resources.
e. Engagement performance.
f. Monitoring.

How should quality control policies and procedures be established?

The quality control policies and procedures should be documented and
communicated to the firm’s personnel. Such communication describes the quality control
policies and procedures and the objectives they are designed to achieve, and includes the
message that each individual has a personal responsibility for quality and is expected to comply
with these policies and procedures. In addition, the firm recognizes the importance of obtaining
feedback on its quality control system from its personnel. Therefore, the firm encourages its
personnel to communicate their views or concerns on quality control matters.

Leadership Responsibilities for Quality Within the Firm

What is leadership?
It is a process of social influence in which one person can enlist the aid and support of
others in the accomplishment of common objective(s).
As an element of system of quality control, leadership plays a vital role on the
development and implementation of quality policies and procedures. It significantly influences
the internal culture of the firm.

What is the objective of quality control policies and procedures for leadership
responsibilities?
It is design to promote an internal culture based on the recognition that quality is
essential in performing engagements. Such policies and procedures should require the
firm’s chief executive officer (or equivalent) or, if appropriate, the firm’s managing board of
partners (or equivalent), to assume ultimate responsibility for the firm’s system of quality control.

How to promote a quality-oriented internal culture of a firm?

It is communicated on clear, consistent and frequent actions and messages from all
levels of the firm’s management emphasizing the firm’s quality control policies and
procedures, and the requirement to perform work that complies with professional standards and
regulatory and legal requirements and issue reports that are appropriate in the circumstances.

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 Such actions and messages encourage a culture that recognizes and rewards high
quality work. They may be communicated by training seminars, meetings, formal or informal
dialogue, mission statements, newsletters, or briefing memoranda. They are incorporated in the
firm’s internal documentation and training materials, and in partner and staff appraisal
procedures such that they will support and reinforce the firm’s view on the importance of quality
and how, practically, it is to be achieved.

What is the requirement for person or persons assigned operational responsibility for the
firm’s quality control system by the firm’s chief executive officer or managing board of
partners?
They should have sufficient and appropriate experience and ability, and the necessary
authority, to assume that responsibility. Sufficient and appropriate experience and ability
enables the responsible person or persons to identify and understand quality control issues and
to develop appropriate policies and procedures. Necessary authority enables the person or
persons to implement those policies and procedures.

Ethical Requirements

What are the fundamental principles of professional ethics?

The fundamental principles based on the Philippine Code of Ethics are (1) integrity, (2)
objectivity, (3) professional competence and due care, (4) confidentiality and (5)
professional behavior.

What is the objective of quality control policies and procedures for ethical requirements?
It is design to provide it with reasonable assurance that the firm and its personnel
comply with relevant ethical requirements.

How are the quality policies and procedures for compliance with professional ethics
reinforced?
The firm’s policies and procedures emphasize the fundamental principles, which are
reinforced in particular by (a) the leadership of the firm, (b) education and training, (c)
monitoring and (d) a process for dealing with non-compliance.

What is independence?
It is being impartial and unbiased on making professional judgment. It is the
avoidance of conflict of interest to ensure integrity. The two types of independence are:
a. Independence of mind – The state of mind that permits the expression of a
conclusion without being affected by influences that compromise professional

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 judgment, allowing an individual to act with integrity, and exercise objectivity and
professional skepticism.

b. Independence in Appearance – The avoidance of facts and circumstances that are

so significant that a reasonable and informed third party, having knowledge of all
relevant information, including safeguards applied, would reasonably conclude a
firm’s, or a member of the assurance team’s, integrity, objectivity or professional
skepticism had been compromised.

Does PSQC require firms to establish policies and procedures for independence?
Yes, it does as indicated in paragraph 18 of PSQC.

What are the objectives of quality control policies and procedures for independence?

Firms should establish policies and procedures:

1. Designed to provide it with reasonable assurance that the firm, its personnel
and, where applicable, others subject to independence requirements
(including experts contracted by the firm and network firm personnel),
maintain independence where required by the Philippine Code.

Such policies and procedures should enable the firm to:

a. Communicate its independence requirements to its personnel and, where

applicable, others subject to them; and
b. Identify and evaluate circumstances and relationships that create threats to
independence, and to take appropriate action to eliminate those threats or
reduce them to an acceptable level by applying safeguards, or, if considered
appropriate, to withdraw from the engagement.

Further, the policies and procedures should require:

a. Engagement partners to provide the firm with relevant information about client
engagements, including the scope of services, to enable the firm to evaluate the
overall impact, if any, on independence requirements.
b. Personnel to promptly notify the firm of circumstances and relationships that
create a threat to independence so that appropriate action can be taken.
c. The accumulation and communication of relevant information to appropriate
personnel so that:
 The firm and its personnel can readily determine whether they satisfy
independence requirements.
 The firm can maintain and update its records relating to independence.
 The firm can take appropriate action regarding identified threats to
independence.

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 2. Designed to provide it with reasonable assurance that it is notified of breaches
of independence requirements, and to enable it to take appropriate actions to
resolve such situations.

The policies and procedures should include requirements for:

a. All who are subject to independence requirements to promptly notify the firm of
independence breaches of which they become aware.
b. The firm to promptly communicate identified breaches of these policies and
procedures to:
 The engagement partner who, with the firm, needs to address the breach; and
 Other relevant personnel in the firm and those subject to the independence
requirements who need to take appropriate action.
c. Prompt communication to the firm, if necessary, by the engagement partner and
the other individuals referred to in subparagraph of the actions taken to resolve
the matter, so that the firm can determine whether it should take further action.

Are firm personnel required to acknowledge compliance with policies and procedures on
independence?
Yes, they must. At least annually, the firm should obtain written confirmation of
compliance with its policies and procedures on independence from all firm personnel required
to be independent by the Philippine Code.

What specific threat to compliance will be created when using the same senior personnel
on an assurance engagement over a long period of time?
It may create familiarity threat that is being too sympathetic to a client.

What should firm to do to address familiarity threat?

The firm should establish and implement policies and procedures for familiarity threat by:
a. Setting out criteria for determining the need for safeguards to reduce the
familiarity threat to an acceptable level when using the same senior personnel on an
assurance engagement over a long period of time; and
b. For all audits of financial statements of listed entities, requiring the rotation of
the engagement partner after a specified period in compliance with the Philippine
Code.
What are examples of criteria for determining the need for safeguards to reduce the
familiarity threat to an acceptable level?
1. The nature of the engagement, including the extent to which it involves a matter of
public interest.
2. The length of service of the senior personnel on the engagement.

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Pertaining to financial statements audits of listed entities, when does rotation of
engagement partner take place?
The Philippine Code requires the rotation of the engagement partner after a pre- defined
period, normally no more than five (5) years, and provides related standards and guidance

Acceptance and continuance of client relationships and specific engagements

What is the objective of quality control policies and procedures for the acceptance and
continuance of client relationships and specific engagements?
It is design to provide it with reasonable assurance that it will only undertake or
continue relationships and engagements where it:
 Has considered the integrity of the client and does not have information that would
lead it to conclude that the client lacks integrity;
 Is competent to perform the engagement and has the capabilities, time and
resources to do so; and
 Can comply with ethical requirements.

Is the identified issue with acceptance and continuance of client relationship or

engagement needed to be documented?
Yes, it is a must. The resolution for the issue should be documented as well.

What is the information needed to determine integrity of management?

Information such as, but not limited to:
 The identity and business reputation of the client’s principal owners, key
management, related parties and those charged with its governance.
 The nature of the client’s operations, including its business practices.
 Information concerning the attitude of the client’s principal owners, key
management and those charged with its governance towards such matters as
aggressive interpretation of accounting standards and the internal control
environment.
 Whether the client is aggressively concerned with maintaining the firm’s fees as
low as possible.
 Indications of an inappropriate limitation in the scope of work.
 Indications that the client might be involved in money laundering or other criminal
activities.
 The reasons for the proposed appointment of the firm and non- reappointment of
the previous firm.

Where to get the information about integrity of management?

It can be obtained from various such as, but not limited to:

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  Communications with existing or previous providers of professional accountancy
services to the client in accordance with the Philippine Code, and discussions with
other third parties.
 Inquiry of other firm personnel or third parties such as bankers, legal counsel and
industry peers.
 Background searches of relevant databases.

How to check competencies, capabilities, time and resources to undertake

engagements?
The firm reviews the specific requirements of the engagement and existing partner
and staff profiles at all relevant levels. Matters the firm considers include whether:
 Firm personnel have knowledge of relevant industries or subject matters.
 Firm personnel have experience with relevant regulatory or reporting requirements, or
the ability to gain the necessary skills and knowledge effectively.
 The firm has sufficient personnel with the necessary capabilities and competence.
 Experts are available, if needed.
 Individuals meeting the criteria and eligibility requirements to perform engagement
quality control review are available, where applicable.
 The firm is able to complete the engagement within the reporting deadline.

If there is conflict of interest between client and firm, what should the latter do?
Where a potential conflict, actual or perceived, is identified, the firm considers whether it
is appropriate to accept the engagement.

What should the firm do when information is obtained regarding integrity of management
that would have caused the firm to decline an engagement if that information had been
available earlier?
There should be policies and procedures for this circumstance and must include
consideration of:
 The professional and legal responsibilities that apply to the circumstances,
including whether there is a requirement for the firm to report to the person or persons
who made the appointment or, in some cases, to regulatory authorities; and
 The possibility of withdrawing from the engagement or from both the
engagement and the client relationship.

Human Resources

What is the objective of quality control policies and procedures for human resources?
It 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

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standards and regulatory and legal requirements, and to enable the firm or engagement
partners to issue reports that are appropriate in the circumstances.
Such policies and procedures should address (1) recruitment, (2) performance
evaluation, (3) capabilities, (4) competence, (5) career development, (6) promotion, (7)
compensation and (8) estimation of personnel needs.

How important are quality controls for the manpower recruitment of firm?
Quality policies and procedures help the firm select individuals of integrity with the
capacity to develop the capabilities and competence necessary to perform the firm’s work.

How are capabilities and competence developed?

Capabilities and competence are developed through a variety of methods, including
the following:
 Professional education.
 Continuing professional development, including training.
 Work experience.
 Coaching by more experienced staff, for example, other members of the
engagement team.

What is continuing professional development?

It is maintenance of firm personnel knowledge and capabilities. The firm therefore
emphasizes in its policies and procedures the need for continuing training for all levels of firm
personnel, and provides the necessary training resources and assistance to enable personnel to
develop and maintain the required capabilities and competence. Where internal technical and
training resources are unavailable, or for any other reason, the firm may use a suitably qualified
external person for that purpose

How important quality control policies and procedures for performance evaluation,
compensation and promotion?
Those give due recognition and reward to the development and maintenance of
competence and commitment to ethical principles.

What should the firm do for performance evaluation, compensation and promotion?
In particular, the firm:
a. Makes personnel aware of the firm’s expectations regarding performance and
ethical principles;
b. Provides personnel with evaluation of, and counseling on, performance, progress
and career development; and
c. Helps personnel understand that advancement to positions of greater
responsibility depends, among other things, upon performance quality and
adherence to ethical principles, and that failure to comply with the firm’s policies
and procedures may result in disciplinary action.

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Assignment of Engagement Teams

What should be included on the quality control policies and procedures for assignment
of engagement teams?
1. The firm should assign responsibility for each engagement to an
engagement partner. The firm should establish policies and procedures
requiring that:
a. The identity and role of the engagement partner are communicated to key
members of client management and those charged with governance;
b. The engagement partner has the appropriate capabilities, competence,
authority and time to perform the role; and
c. The responsibilities of the engagement partner are clearly defined and
communicated to that partner.
Policies and procedures include systems to monitor the workload and
availability of engagement partners so as to enable these individuals to have
sufficient time to adequately discharge their responsibilities.

2. The firm should also assign appropriate staff with the necessary capabilities,
competence and time to perform engagements in accordance with
professional standards and regulatory and legal requirements, and to enable the
firm or engagement partners to issue reports that are appropriate in the
circumstances.

The firm establishes procedures to assess its staff’s capabilities and

competence.

How to assess staff’s capabilities and competence when assigning them to

engagements?
The capabilities and competence considered when assigning engagement teams, and
in determining the level of supervision required, include the following:
 An understanding of, and practical experience with, engagements of a similar
nature and complexity through appropriate training and participation.
 An understanding of professional standards and regulatory and legal requirements.
 Appropriate technical knowledge, including knowledge of relevant information
technology.
 Knowledge of relevant industries in which the clients operate.
 Ability to apply professional judgment.
 An understanding of the firm’s quality control policies and procedures.

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Engagement Performance

What is the scope of engagement performance?

It covers (1) performance compliance with relevant standards and requirements, (2)
supervision, (3) review, (4) consultation, (5) documentation (6) differences of opinion and (7)
quality review.

What is the objective of quality control policy and procedures for engagement
performance?
It should be designed to provide it with reasonable assurance that engagements
are performed in accordance with professional standards and regulatory and legal
requirements, and that the firm or the engagement partner issue reports that are
appropriate in the circumstances.
Through its policies and procedures, the firm seeks to establish consistency in the
quality of engagement performance.

How can firms establish consistency in the quality of engagement performance?

This is often accomplished through written or electronic manuals, software tools or
other forms of standardized documentation, and industry or subject matter-specific guidance
materials. Matters addressed include the following:
 How engagement teams are briefed on the engagement to obtain an
understanding of the objectives of their work. It is important that all members of
the engagement team understand the objectives of the work they are to
perform.
 Processes for complying with applicable engagement standards.
 Processes of engagement supervision, staff training and coaching. Appropriate
team-working and training are necessary to assist less experienced
members of the engagement team to clearly understand the objectives of the
assigned work.
 Methods of reviewing the work performed, the significant judgments made and the
form of report being issued.
 Appropriate documentation of the work performed and of the timing and extent of
the review.
 Processes to keep all policies and procedures current.

Is supervision of work performed necessary and what should be included on it?

Yes, it is. Supervision includes the following:
 Tracking the progress of the engagement.
 Considering the capabilities and competence of individual members of the
engagement team, whether they have sufficient time to carry out their work, whether
they understand their instructions and whether the work is being carried out in
accordance with the planned approach to the engagement.

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  Addressing significant issues arising during the engagement, considering their
significance and modifying the planned approach appropriately.
 Identifying matters for consultation or consideration by more experienced
engagement team members during the engagement.

How important a review conducted by firms?

Review responsibilities are determined on the basis that more experienced
engagement team members, including the engagement partner, review work performed by less
experienced team members. Reviewers consider whether:
 The work has been performed in accordance with professional standards and
regulatory and legal requirements;
 Significant matters have been raised for further consideration;
 Appropriate consultations have taken place and the resulting conclusions have
been documented and implemented;
 There is a need to revise the nature, timing and extent of work performed;
 The work performed supports the conclusions reached and is appropriately
documented;
 The evidence obtained is sufficient and appropriate to support the report; and
 The objectives of the engagement procedures have been achieved.

What is the objective of quality control policy and procedures for consultation?
It should be designed to provide it with reasonable assurance that:
 Appropriate consultation takes place on difficult or contentious matters;
 Sufficient resources are available to enable appropriate consultation to take
place;
 The nature and scope of such consultations are documented; and
 Conclusions resulting from consultations are documented and implemented.

What is consultation?
Consultation includes discussion, at the appropriate professional level, with
individuals within or outside the firm who have specialized expertise, to resolve a difficult or
contentious matter.
Consultation uses appropriate research resources as well as the collective experience
and technical expertise of the firm. Consultation helps to promote quality and improves the
application of professional judgment. The firm seeks to establish a culture in which consultation
is recognized as strength and encourages personnel to consult on difficult or contentious
matters.
Consultation should be documented.

What is the objective of quality control policies and procedures for differences in
opinion?

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 It should be designed dealing with and resolving differences of opinion within the
engagement team, with those consulted and, where applicable, between the engagement
partner and the engagement quality control reviewer. Conclusions reached should be
documented and implemented.
What is an engagement quality control review?
It is a process designed to provide an objective evaluation, before the report is
issued, of the significant judgments the engagement team made and the conclusions they
reached in formulating the report.

What is the objective of quality control policies and procedures for engagement quality
control review?
It provides an objective evaluation of the significant judgments made by the
engagement team and the conclusions reached in formulating the report.

What should be covered by the quality control policies and procedures for engagement
quality control review?
Such policies and procedures should:
 Require an engagement quality control review for all audits of financial
statements of listed entities;
 Set out criteria against which all other audits and reviews of historical
financial information, and other assurance and related services engagements
should be evaluated to determine whether an engagement quality control review
should be performed; and
 Require an engagement quality control review for all engagements meeting
the criteria established in compliance with subparagraph (b).
 Require the completion of the engagement quality control review before the
report is issued.

What are the criteria that should be included to determine engagements, other than audit
of financial statements of listed entities, subject to quality review?
 The nature of the engagement, including the extent to which it involves a
matter of public interest.
 The identification of unusual circumstances or risks in an engagement or class
of engagements.
 Whether laws or regulations require an engagement quality control review.

What are the other important things to consider in quality policies and procedures for an
engagement quality control review?
The firm should establish policies and procedures setting out:
 The nature, timing and extent of an engagement quality control review;
 Criteria for the eligibility of engagement quality control reviewers; and
 Documentation requirements for an engagement quality control review.

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Does a quality control review reduce the responsibilities of engagement partners?
No, it doesn’t. The purpose of quality control review is to ensure quality of services
performed.
What exactly are being reviewed for audits of financial statements of listed entities?
An engagement quality control review for audits of financial statements of listed
entities includes considering the following:
 The engagement team’s evaluation of the firm’s independence in relation to the
specific engagement.
 Significant risks identified during the engagement and the responses to those risks.
 Judgments made, particularly with respect to materiality and significant risks.
 Whether appropriate consultation has taken place on matters involving differences
of opinion or other difficult or contentious matters, and the conclusions arising from
those consultations.
 The significance and disposition of corrected and uncorrected misstatements
identified during the engagement.
 The matters to be communicated to management and those charged with
governance and, where applicable, other parties such as regulatory bodies.
 Whether working papers selected for review reflect the work performed in relation to
the significant judgments and support the conclusions reached.
 The appropriateness of the report to be issued.

What are exactly being reviewed for engagements other than audit of financial
statements of listed entities?
Engagement quality control reviews for engagements other than audits of financial
statements of listed entities may, depending on the circumstances, include some or all of the
considerations mentioned on audits of financial statements of listed entities.

When to perform the engagement quality control review of engagements?

The engagement quality control review is conducted in a timely manner at
appropriate stages during the engagement so that significant matters may be promptly
resolved to the reviewer’s satisfaction before the report is issued.

What is engagement quality control reviewer?

It is a partner, other person in the firm, suitably qualified external person, or a team
made up of such individuals, with sufficient and appropriate experience and authority to
objectively evaluate, before the report is issued, the significant judgments the engagement team
made and the conclusions they reached in formulating the report.

When an engagement quality control reviewer makes recommendations that the

engagement partner does not accept and the matter is not resolved to the reviewer’s
satisfaction, what should be the appropriate course of action to take?
The report is not issued until the matter is resolved by following the firm’s procedures
for dealing with differences of opinion.

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To become an engagement quality control reviewer, what are the criteria to be met?
The firm’s policies and procedures should address the appointment of engagement
quality control reviewers and establish their eligibility through:
 The technical qualifications required to perform the role, including the
necessary experience and authority; and
 The degree to which an engagement quality control reviewer can be
consulted on the engagement without compromising the reviewer’s objectivity.

What are the requirements on quality control policies and procedures for the
documentation of engagement quality control review?
Policies and procedures on documentation of the engagement quality control review
should require documentation that:
 The procedures required by the firm’s policies on engagement quality control review
have been performed;
 The engagement quality control review has been completed before the report is
issued; and
 The reviewer is not aware of any unresolved matters that would cause the reviewer
to believe that the significant judgments the engagement team made and the
conclusions they reached were not appropriate.

Monitoring

What is monitoring?
It is a process comprising an ongoing consideration and evaluation of the firm’s
system of quality control, including a periodic inspection of a selection of completed
engagements, designed to enable the firm to obtain reasonable assurance that its system of
quality control is operating effectively

What is the objective of quality control policies and procedures for monitoring?
It is design 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. Such policies and procedures should include an
ongoing consideration and evaluation of the firm’s system of quality control, including a periodic
inspection of a selection of completed engagements.

What is the purpose of monitoring compliance with quality control policies and
procedures?
The purpose of monitoring compliance with quality control policies and procedures is
to provide an evaluation of:

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  Adherence to professional standards and regulatory and legal requirements;
 Whether the quality control system has been appropriately designed and
effectively implemented; and
 Whether the firm’s quality control policies and procedures have been appropriately
applied, so that reports that are issued by the firm or engagement partners are
appropriate in the circumstances.

To whom responsibility for the monitoring process of system of quality control is

entrusted by the firm?
The firm entrusts responsibility for the monitoring process to a partner or partners or
other persons with sufficient and appropriate experience and authority in the firm to
assume that responsibility. Monitoring of the firm’s system of quality control is performed by
competent individuals and covers both the appropriateness of the design and the effectiveness
of the operation of the system of quality control.

What should be done when there are deficiencies noted as a result of monitoring
process?
 Evaluate the effect of deficiencies whether they are either:
a. Instances that do not necessarily indicate that the firm’s system of quality
control is insufficient to provide it with reasonable assurance that it complies
with professional standards and regulatory and legal requirements, and that
the reports issued by the firm or engagement partners are appropriate in the
circumstances; or
b. Systemic, repetitive or other significant deficiencies that require prompt
corrective action.
 Communicate to relevant engagement partners and other appropriate
personnel deficiencies noted as a result of the monitoring process and
recommendations for appropriate remedial action
 The firm’s evaluation of each type of deficiency should result in recommendations
for one or more of the following
a. Taking appropriate remedial action in relation to an individual engagement or
member of personnel;
b. The communication of the findings to those responsible for training and
professional development;
c. Changes to the quality control policies and procedures; and
d. Disciplinary action against those who fail to comply with the policies and
procedures of the firm, especially those who do so repeatedly.

Where the results of the monitoring procedures indicate that a report may be
inappropriate or that procedures were omitted during the performance of the
engagement, what should the firm do?
The firm should determine what further action is appropriate to comply with
relevant professional standards and regulatory and legal requirements. It should also
consider obtaining legal advice.

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How often should the firm communicate the results of the monitoring of its quality
control system to engagement partners and other appropriate individuals within the
firm?
It should be at least annually. Such communication should enable the firm and these
individuals to take prompt and appropriate action where necessary in accordance with their
defined roles and responsibilities.

What information should be communicated as a result of monitoring process?

 A description of the monitoring procedures performed.
 The conclusions drawn from the monitoring procedures.
 Where relevant, a description of systemic, repetitive or other significant
deficiencies and of the actions taken to resolve or amend those deficiencies.

What is the objective of quality control policies and procedures for complaints and
allegations?
It is design to provide it with reasonable assurance that it deals appropriately
with:
 Complaints and allegations that the work performed by the firm fails to
comply with professional standards and regulatory and legal requirements;
and
 Allegations of non-compliance with the firm’s system of quality control.

What is documentation?
Documentation is a set of documents provided on paper, or online, or on digital or
analog media, such as audio tape or CDs. Example are user guides, white papers, on-line help,
quick-reference guides. Source: Wikipedia

What is the objective of quality control policies and procedures for documentation?
It aims to provide evidence of the operation of each element of its system of
quality control.
How such matters are documented is the firm’s decision. For example, large firms
may use electronic databases to document matters such as independence confirmations,
performance evaluations and the results of monitoring inspections. Smaller firms may use more
informal methods such as manual notes, checklists and forms

What are the factors to be considered when determining the form and content of
documentation for quality control policies and procedures?
 The size of the firm and the number of offices.
 The degree of authority both personnel and offices have.
 The nature and complexity of the firm’s practice and organization.

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How long the documentation should be retained by a firm?
The firm retains this documentation for a period of time sufficient to permit those
performing monitoring procedures to evaluate the firm’s compliance with its system of
quality control, or for a longer period if required by law or regulation.

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