Index

Siddhartha Sankar Saha (Department of Commerce, University of Calcutta, Kolkata, India)
Mitrendu Narayan Roy (Goenka College of Commerce and Business Administration, University of Calcutta, Kolkata, India)

Quality Control Procedure for Statutory Financial Audit

ISBN: 978-1-78714-227-5, eISBN: 978-1-78714-226-8

Publication date: 30 June 2017

This content is currently only available as a PDF

Citation

Saha, S.S. and Roy, M.N. (2017), "Index", Quality Control Procedure for Statutory Financial Audit, Emerald Publishing Limited, Bingley, pp. 297-310. https://doi.org/10.1108/978-1-78714-226-820171002

Publisher

:

Emerald Publishing Limited

Copyright © 2017 Emerald Publishing Limited


INDEX

Note: Page numbers followed by ‘n’ with number indicate notes.

AASB. See Auditing and Assurance Standards Board (AASB)

Acceptance and continuance of client relationship and audit engagements

in USA
, 50

in UK
, 75

in India
, 97

Acceptance and continuance of the client relationship and specific engagements

in USA
, 46

in UK
, 71

in India
, 94–95

Accounting estimate(s)
, 86–87

auditing
, 122, 155, 179, 194, 215, 233

based on ISA (UK & Ireland)-540
, 86–87

based on SAS-122 (AU-C 540)
, 61–62

SA-540
, 106–108

Accounting firm(s)
, 27–28, 134

of auditors
, 3

quality control policies of

in India
, 93–96

in UK
, 69–74

in USA
, 45–49

structured governance arrangements
, 27–28

Agreement (A)
, 133, 184, 274

American Institute of Certified Public Accountants (AICPA)
, 46

Annual reports
, 30

Appointment procedure for statutory auditor

in USA
, 67

in UK
, 91

in India
, 110

Appointment procedure of statutory auditor
, 124

ASB. See Auditing Standards Board (ASB)

Assignment of engagement teams

in USA
, 50

in UK
, 75

in India
, 97

Assurance, firm
, 3

Attitude to authority
, 36

AU Section-161
, 49

AU Section-220
, 49–50

Audit
, 3

firm inspection
, 30

inspection mechanism
, 125

methodology
, 28

quality control for audit procedure
, 185, 186–187

regulations
, 36–37

Audit documentation
, 87–88, 122–123, 128, 195–196, 197, 215, 217, 233, 236

Chi-square test of homogeneity
, 179, 181

respondents percentage
, 155–159

SA-230
, 108

USA
, 62–64

Audit engagement
, 78–79, 119, 128, 142, 188–189, 203, 207, 225, 227

Chi-square test of homogeneity
, 169, 171

SA-210
, 99–100

USA
, 53–54

Audit evidence
, 81–82, 120, 128, 191–192, 193, 209, 211–212, 229, 231

Chi-square test of homogeneity
, 174–176

respondents percentage
, 148–152

SA-500
, 102–103

Audit Firm Governance Code
, 70

Audit inspection mechanism

in USA
, 68

in UK
, 92

in India
, 111–112

Audit planning
, 81, 120, 128, 190–191, 209, 210, 229–230

Chi-square test of homogeneity
, 169, 173

respondents percentage
, 145–148

SA-300
, 102

USA
, 56–57

Audit policies and procedures of engagement team

in India

accounting estimate
, 106–108

audit documentation
, 108

audit engagement
, 99–100

audit evidence
, 102–103

audit planning
, 102

audit report
, 109–110

audit sampling
, 103

internal control system and role of internal auditors
, 100–101

overall objectives of independent auditor
, 99

quality control policies of engagement team
, 97–99

working of expert
, 105–106

in UK
, 74

accounting estimates
, 86–87

audit documentation
, 87–88

audit engagement
, 78–79

audit evidence
, 81–82

audit planning
, 81

audit report
, 88–90

audit sampling
, 82–83

external party confirmation
, 83–84

internal control system and role of internal auditors
, 79–80

overall objectives of independent auditor
, 77–78

quality control policies of engagement team
, 74–77

work of expert
, 84–85

in USA
, 49

accounting estimates
, 61–62

audit documentation
, 62–64

audit engagement
, 53–54

audit evidence
, 57–58

audit planning
, 56–57

audit report
, 64–66

audit sampling
, 58

external party confirmation
, 59–60

internal control system and role of internal auditors
, 54–56

objectives of independent auditor
, 52–53

quality control policies of engagement team
, 49–52

work of expert
, 60–61

Audit quality
, 6, 10, 26

contextual factors of
, 33–37

factors of audit quality
, 26

input factors
, 27–28

output factors
, 29–30

process factors
, 28–29

regulatory framework at international level
, 37–39

Audit report
, 88–90, 123–124, 128, 196–198, 215, 218, 237, 238

Chi-square test of homogeneity
, 179, 181

respondents percentage
, 159

SA-700
, 109–110

USA
, 64–66

Audit sampling
, 82–83, 121, 128, 192, 194, 209, 213, 229, 229–233, 234

Chi-square test of homogeneity
, 174, 177

respondents percentage
, 152

SA-505
, 103

USA
, 58

Audited financial statements
, 29

Auditing accounting estimates
, 122, 128, 194, 196, 215, 216, 233, 235

Chi-square test of homogeneity
, 179, 180

respondents percentage
, 155

Auditing and Assurance Standards Board (AASB)
, 39

Auditing sections (AU sections). See Statement of Auditing Standard (SAS)

Auditing Standards Board (ASB)
, 49

Auditor
, 99

independent (SA-200)

report
, 29

Big Six firms
, 7

Business practices
, 33, 244

CAs. See Chartered accountants (CAs)

CCAI. See Council of Chartered Accountants of India (CCAI)

Central Intelligence Agency (CIA)
, 45

CEO. See Chief executive officer (CEO)

Certified public accountant firms (CPA firms)
, 45

Chartered accountants (CAs)
, 4, 185

analysing opinions of CAs and Students
, 133

audit documentation
, 155–159

audit engagement
, 142

audit evidence
, 148–152

audit planning
, 145–148

audit report
, 159

audit sampling
, 152

auditing accounting estimates
, 155

external party confirmation
, 152–155

general issues governing quality of audit
, 159–164

internal control system and internal auditors
, 142–145

overall objectives of independent auditor
, 139–142

quality control for audit procedure
, 134–139

research methodology
, 133–134

work of expert
, 155

examining homogeneity of opinions between CAs and students
, 165–184

nonparametric Mann‒Whitney test
, 198

audit documentation
, 215, 217

audit engagement
, 203, 207

audit evidence
, 209, 211–212

audit planning
, 209, 210

audit report
, 215, 218

audit sampling
, 209, 213

auditing accounting estimates
, 215, 216

external party confirmation
, 209, 214

fulfilment of assumptions for study
, 200–201

general issues governing quality of audit
, 215, 219, 220–221

internal control system and internal auditors
, 203, 208

methodology for test
, 201–202

overall objectives of independent auditor
, 203, 206

quality control for audit procedure
, 203, 204–205

quality control procedure for statutory financial audit
, 219, 222

work of expert
, 215, 216

Chartered Accountants (Amendment) Act
, 41

Chi-square test of homogeneity
, 165–184

methodology
, 165–166

audit documentation
, 179, 181

audit engagement
, 169, 171

audit evidence
, 174–176

audit planning
, 169, 173

audit report
, 179, 181

audit sampling
, 174, 177

auditing accounting estimates
, 179, 180

external party confirmation
, 174, 178

general issues governing quality of audit
, 179–184

internal control system and internal auditors
, 169, 172

objectives of independent auditor
, 169, 170

quality control for audit procedure
, 166–168

work of expert
, 174–179

Chief executive officer (CEO)
, 46, 94, 115

CIA. See Central Intelligence Agency (CIA)

Clarified Auditing Sections (AU-C Sections)
, 49

Client engagement
, 57

CLPs. See Continuous learning programmes (CLPs)

Collective behaviour
, 36

Commercial law
, 33

Comparative study of quality control framework
, 114

audit documentation
, 122–123

audit engagement
, 119

audit evidence
, 120

audit planning
, 120

audit report
, 123–124

audit sampling
, 121

auditing accounting estimates
, 122

external confirmations
, 121

general issues governing quality of audit
, 124–125

objectives of independent auditor
, 118

quality control procedure at engagement level
, 117–118

quality control procedure at firm level
, 114–116

use of work of internal auditors
, 119–120

using work of expert
, 121–122

Consultation

in USA
, 47

in UK
, 72

in India
, 95

Consultation in case of audit engagement

in USA
, 51

in UK
, 76

Contextual factors of audit quality
, 33–37

Continuous learning programmes (CLPs)
, 132, 215, 237

Continuous professional development (CPD)
, 124–125

Continuous professional development for statutory auditors

in USA
, 67

in UK
, 91

in India
, 111

Corporate fraud
, 5

Corporate governance
, 35–36

Council of Chartered Accountants of India (CCAI)
, 41

CPA firms. See Certified public accountant firms (CPA firms)

CPD. See Continuous professional development (CPD)

Cultural factors
, 36

Data reliability rule
, 133

Decision rule
, 202

Degree of freedom
, 202

Demographic profile of respondents
, 21–23

Dependent variable
, 133, 200

Differences of opinion

in USA
, 48

in UK
, 73

in India
, 96

Differences of opinion in case of audit engagement

in USA
, 51

in UK
, 76

Disagreement (D)
, 133, 184, 274

Documentation of audit engagement

in USA
, 51

in UK
, 76–77

in India
, 98

Documentation of system of quality control

in USA
, 48

in UK
, 74

in India
, 96–97

Engagement documentation

in USA
, 48

in UK
, 73

in India
, 96

Engagement level

input factors at
, 28

process factors at
, 29

Engagement performance

in USA
, 47–48

in UK
, 72–73

in India
, 95–96

Engagement performance of an audit engagement

in USA
, 51

in UK
, 75–76

in India
, 98

Engagement quality control review (EQCR)
, 47, 51, 72, 95, 98, 115–116, 203

in USA
, 47–48

in UK
, 72–73

in India
, 95

Engagement quality control review in case of audit engagement

in USA
, 51

in UK
, 76

Engagement team, quality control policies of (SA-220)
, 97–99

Ethical audit
, 8

European Union (EU)
, 69

External confirmations
, 121

External party confirmation(s)
, 128

Chi-square test of homogeneity
, 174, 178

respondents percentage
, 152–155

USA
, 59–60

Financial Accounting Standards Board (FASB)
, 1n1

Financial decisions
, 3, 25

Financial fraud
, 4, 7

Financial manoeuvring
, 4–5

Financial reporting

applicable financial reporting framework
, 34–35

laws and regulations relating to
, 33–34

supply chain
, 30–33

timetable
, 37

Financial Reporting Council (FRC)
, 69–70

Financial statements
, 1, 88

audited financial statements
, 29

auditing
, 29

quality control for statutory audit of
, 5, 43

audit policies and procedures of engagement team
, 97–110

general issues governing quality of audit
, 110–112

quality control framework in India
, 93

quality control framework in UK
, 69–92

quality control framework in USA
, 45–68

quality control policies of accounting firm
, 93–96

in select countries
, 44

quality of statutory audit in
, 25

contextual factors of audit quality
, 33–37

factors of audit quality
, 26–30

financial reporting supply chain
, 30–33

users
, 32, 33

Firm level

input factors at
, 27–28

process factors at
, 28–29

Foreign investors
, 5

FRC. See Financial Reporting Council (FRC)

General issues governing quality of audit
, 110–112, 114, 124, 128

appointment procedure of statutory auditor
, 124

audit inspection mechanism
, 125

Chi-square test of homogeneity
, 179–184

CPD for statutory auditors
, 124–125

in India
, 110–112

nonaudit services of statutory auditors
, 125

respondents percentage
, 159–164

in UK
, 90–92

in USA
, 66–68

whistle blower policies
, 124

Generally Accepted Accounting Principles (GAAPs)
, 1

Generally Accepted Auditing Standards (GAAS)
, 50, 52

Human resources

in USA
, 47

in UK
, 71–72

in India
, 95

Hypothesis
, 201–202, 222

IAASB. See International Auditing and Assurance Standards Board (IAASB)

IAESB. See International Accounting Education Standards Board (IAESB)

IASB. See International Accounting Standard Board (IASB)

ICAI. See Institute of Chartered Accountants of India (ICAI)

IESBA. See International Ethics Standards Board for Accountants (IESBA)

IFAC. See International Federation of Accountants (IFAC)

IFRS. See International Financial Reporting Standards (IFRS)

IMF. See International Monetary Fund (IMF)

Independent auditor
, 128

Chi-square test of homogeneity
, 169, 170

overall objectives of an independent auditor
, 77–78, 118, 139–142, 185, 188, 203, 206, 225, 226

percentage of respondents
, 140–141

USA
, 52–53

Independent variable(s)
, 133, 200

using Pearson’s correlation coefficient and T-test
, 219, 222–237

India

quality control framework in
, 93

audit policies and procedures of engagement team
, 97–110

general issues governing quality of audit
, 110–112

quality control policies of accounting firm
, 93–96

roles of firm’s personnel
, 39

SQC-1
, 40

system of quality control
, 39–40

Individual audit, information on
, 30

Information system
, 35, 244

Input factors
, 26

at engagement level
, 28

at firm level
, 27–28

at national level
, 27

personal attributes
, 27

Institute of Chartered Accountants of India (ICAI)
, 4, 39, 128

Internal auditors
, 79–80, 189–190, 203, 208, 225, 228–229

SA-610
, 100–101

use of work of internal auditors
, 119–120

See also Statutory auditor(s)

Internal control system and internal auditors
, 79–80, 128, 189–190, 203, 208, 225, 228–229

Chi-square test of homogeneity
, 169, 172

Respondents’ percentage
, 142–145

USA
, 54–56

SA-610
, 100–101

International Accounting Education Standards Board (IAESB)
, 39

International Accounting Standard Board (IASB)
, 38–39

International Auditing and Assurance Standards Board (IAASB)
, 38, 43, 49

International Ethics Standards Board for Accountants (IESBA)
, 38

International Federation of Accountants (IFAC)
, 37–38, 43, 49

International Financial Reporting Standards (IFRS)
, 34–35

International level, regulatory framework governing audit quality at
, 37–39

International Monetary Fund (IMF)
, 45

International Public Sector Accounting Standard Board (IPSASB)
, 38–39

International Public Sector Accounting Standards (IPSAS)
, 38–39

International Standard on Auditing (ISA)
, 38, 49

(UK & Ireland)-200
, 77–78

(UK & Ireland)-210
, 78–79

(UK and Ireland)-220
, 97

quality control policies of accounting firm
, 69–74

quality control policies of engagement team
, 74–77

(UK & Ireland)-230
, 87–88

(UK & Ireland)-300
, 81

(UK & Ireland)-500
, 81–82

(UK & Ireland)-505
, 83–84

(UK & Ireland)-530
, 82–83

(UK & Ireland)-540
, 86–87

(UK & Ireland)-610
, 79–80

(UK & Ireland)-620
, 84–85

(UK & Ireland)-700
, 88–90

See also Quality Control for Audit Procedure; Standard on Auditing (SA)

International Standard on Quality Control (ISQC)
, 26n1, 38, 69–74, 114

ISQC-1
, 69–70, 93–94

IPSAS. See International Public Sector Accounting Standards (IPSAS)

IPSASB. See International Public Sector Accounting Standard Board (IPSASB)

ISA. See International Standard on Auditing (ISA)

Kolmogorov–Smirnov test
, 260–271

Leadership responsibilities for quality on audits

in USA
, 50

in UK
, 75

in India
, 97

Leadership responsibilities for quality within the firm

in USA
, 46

in UK
, 70

in India
, 94

Litigation environment
, 37, 244

Management

and charged with governance
, 32

and regulator
, 32

statutory auditor and
, 30–31

and users of financial statements
, 33

Management Discussion and Analysis (MD & A)
, 1

Mann–Whitney test
, 198

See also Nonparametric Mann–Whitney test

Mean score
, 184

audit

documentation
, 195–196, 197

engagement
, 188–189

evidence
, 191–192, 193

planning
, 190–191

report
, 196–198

sampling
, 192, 194

auditing accounting estimates
, 194, 196

external party confirmation
, 192, 195

general issues governing quality of audit
, 198, 199

internal control system and internal auditors
, 189–190

overall objectives of independent auditor
, 185, 188

quality control

for audit procedure
, 185, 186–187

procedure for statutory financial audit
, 198, 200

work of expert
, 194, 195

Monitoring

in USA
, 48

in UK
, 73–74

in India
, 96

Monitoring of audit engagement

in USA
, 51

in UK
, 76

in India
, 98

National level

input factors at
, 27

process factors at
, 28

Neutral (N)
, 20, 133, 184, 198, 274

Non-Big Six firms
, 7, 12, 15

Nonaudit services of statutory auditors
, 67, 111, 125, 245

in USA
, 67–68

in UK
, 91–92

in India
, 111

Nonparametric Mann–Whitney test
, 198–219

assumptions for
, 200–201

audit documentation
, 215, 217

audit engagement
, 203

audit engagement
, 203, 207

audit evidence
, 209, 211–212

audit planning
, 209, 210

audit report
, 215, 218

audit sampling
, 209, 213

auditing accounting estimates
, 215, 216

CAs and students using
, 198

external party confirmation
, 209, 214

general issues governing quality of audit
, 215, 219

internal control system and internal auditors
, 203, 208

methodology
, 201–202

overall objectives of independent auditor
, 203, 206

quality control for audit procedure
, 203, 204–205

quality control procedure for statutory financial audit
, 219, 222

work of expert
, 215, 216

Null hypothesis
, 200

Output factors
, 26, 29

aggregate view on audit firm inspection
, 30

annual reports
, 30

audited financial statements
, 29

auditor’s report
, 29

information on individual audit
, 30

reports from those charged with governance
, 29–30

transparency report
, 30

PCAOB. See Public Company Accounting Oversight Board (PCAOB)

Pearson’s correlation coefficient
, 219, 222–237

Personal attributes
, 27

Primary data, questionnaire for
, 273

Principle-based approach
, 34–35

Process factors
, 26

at engagement level
, 29

at firm level
, 28–29

at national level
, 28

Public Company Accounting Oversight Board (PCAOB)
, 7

QRB. See Quality review board (QRB)

Quality control

for audit procedure
, 185, 186–187, 203, 204–205, 222–225

environment
, 5

policies of accounting firm
, 69–74, 93–96

policies of engagement team (SA-220)
, 97–99

procedure

at engagement level
, 117–118

at firm level
, 114–116

for statutory financial audit
, 127, 133, 164–165, 198, 200, 219, 222

of statutory audit
, 5

for statutory audit of financial statements
, 5

system
, 39–40

Quality Control for Audit Procedure
, 128

Chi-square test of homogeneity
, 166–168

respondents percentage
, 134–139

in different agreement levels
, 135–138

Quality control framework

in India
, 93–112

in UK
, 69–92

in USA
, 45–68

Quality of statutory audit of financial statements
, 25

contextual factors of audit quality
, 33–37

factors of audit quality
, 26–30

financial reporting supply chain
, 30–33

Indian scenario
, 39–41

regulatory framework governing audit quality at international level
, 37–39

Quality review board (QRB)
, 41

Regulator(s)
, 32

and financial statements users
, 33

and management
, 32

and those charged with governance
, 33

Regulatory framework
, 26

governing audit quality at international level
, 37–39

in India
, 5

at national level
, 27

Relationship between independent variables and satisfactory quality control of statutory audit
, 219

audit documentation
, 233, 236

audit engagement
, 225, 227

audit evidence
, 229, 231–232

audit planning
, 229, 230

audit report
, 237, 238

audit sampling
, 229, 233, 234

auditing accounting estimates
, 233, 235

external party confirmation
, 233, 234

general issues governing quality of audit
, 237, 239–240

internal control system and internal auditors
, 225, 228–229

overall objectives of independent auditor
, 225, 226

quality control for audit procedure
, 222–225

work of expert
, 233, 235

Relevant ethical requirement

in USA
, 46

in UK
, 70–71

in India
, 94

Relevant ethical requirement in an audit engagement

in USA
, 50

in UK
, 75

in India
, 97

Reliability of data
, 133

Reports

annual reports
, 30

auditor’s report
, 29

from charged with governance
, 29–30

transparency report
, 30

Respondents’ perception

analysing opinions of CAs and students
, 133–165

audit documentation
, 155–159

audit engagement
, 142

audit evidence
, 148–152

audit planning
, 145–148

audit report
, 159

audit sampling
, 152

auditing accounting estimates
, 155

external party confirmation
, 152–155

general issues governing quality of audit
, 159–164

internal control system and internal auditors
, 142–145

overall objectives of independent auditor
, 139–142

quality control for audit procedure
, 134–139

research methodology
, 133–134

work of expert
, 155

examining homogeneity of opinions between CAs and students
, 165–184

importance associated with variable by individual respondent groups using mean score
, 184–198

objectives
, 128

percentage of respondents
, 165

quality control procedure for statutory financial audit
, 127, 133, 164–165

reliability of data
, 133

satisfactory quality control of statutory audit
, 219, 222–237, 238–240

significant difference between CAs and students using nonparametric Mann–Whitney test
, 198–219

variables selection
, 128–132

Rule-based framework
, 35

SA. See Standard on Auditing (SA); Strong agreement (SA)

Sarbanes Oxley Act (SOX Act)
, 9

SAS. See Statement of Auditing Standard (SAS)

SAS-122 (AU-C 200), independent auditor objectives
, 52–53

SAS-122 (AU-C 210), audit engagement
, 53–54

SAS-122 (AU-C 220), quality control policies of engagement team
, 49–52

SAS-122 (AU-C 230), audit documentation
, 62–64

SAS-122 (AU-C 300), audit planning
, 56–57

SAS-122 (AU-C 500), audit evidence
, 57–58

SAS-122 (AU-C 505), external party confirmation
, 59–60

SAS-122 (AU-C 530), audit sampling
, 58

SAS-122 (AU-C 540), accounting estimates
, 61–62

SAS-122 (AU-C 620), work of expert
, 60–61

SAS-122 (AU-C 700), audit report
, 64–66

SAS-128 (AU-C 610), internal control system and role of internal auditors
, 54–56

SD. See Strong disagreement (SD)

SEBI. See Securities Exchange Board of India (SEBI)

SEC. See Securities and Exchange Commission (SEC)

Securities and Exchange Commission (SEC)
, 4

Securities Exchange Board of India (SEBI)
, 4

SOX Act. See Sarbanes Oxley Act (SOX Act)

SQC. See Standard on Quality Control (SQC)

SQCS. See Statement of Quality Control Standard (SQCS)

Stakeholders
, 1, 2, 25

interactions among
, 30–33

Standard on Auditing (SA)
, 3n10, 39, 97, 128

accounting estimates (SA-540)
, 106–108

audit documentation (SA-230)
, 108

audit engagement (SA-210)
, 99–100

audit evidence (SA-500)
, 102–103

audit planning (SA-300)
, 102

audit report (SA-700)
, 109–110

audit sampling (SA-505)
, 103

internal control system and role of internal auditors (SA-610)
, 100–101

overall objectives of an independent auditor (SA-200)
, 99

quality control policies of engagement team (SA-220)
, 97–99

working of expert (SA-620)
, 105–106

See also International Standard on Auditing (ISA)

Standard on Quality Control (SQC)
, 3n11, 114

SQC-1
, 4, 17, 40, 93–97, 134

Standardised test statistic (Z)
, 202

Statement of Auditing Standard (SAS)
, 49–52

Statement of Quality Control Standard (SQCS)
, 114

SQCS-8
, 45–49

Statutory auditor(s)
, 25, 119

appointment procedure of
, 124

CPD for
, 124–125

and financial statements users
, 32

and management
, 30–31

nonaudit services of
, 125

plans
, 81

and regulators
, 32

and those charged with governance
, 31–32

Statutory financial audit, quality control procedure for
, 198, 200, 219, 222

Strong agreement (SA)
, 133, 184, 274

Strong disagreement (SD)
, 133, 184, 274

t-test
, 219, 222–237

Test statistic (U)
, 200, 201–202

Transparency report
, 30

Uncertainty avoidance
, 36

United Kingdom (UK)
, 34–35, 44, 69

principle-based approach
, 34

quality control framework in
, 69

audit policies and procedures of engagement team
, 74–90

general issues governing quality of audit
, 90–92

quality control policies of accounting firm
, 69–74

United States of America (USA)
, 4, 35, 37–38, 44

quality control framework in
, 45

audit policies and procedures of engagement team
, 49–66

general issues governing quality of audit
, 66–68

quality control policies of accounting firm
, 45–49

SAS-122 (AU-C 210)
, 119

Variables selection
, 128–132

Whistle blower policies
, 124

in USA
, 67

in UK
, 91

in India
, 110–111