Question Tag: Regulatory Sanctions

The partners of a number of small firms, some of whom act as alternate firms to each other, were considering the outcome of some reviews by the Financial Reporting Council on some of the financial statements the firms prepared. These reviews showed significant lapses in the works they carried out and compliance failure of some appropriate standards. Some other practitioners among them also raised concerns about their failure to meet most of the monitoring guidelines issued by the Professional Practice Monitoring Committee of the Institute. Based on these, it has become imperative that something has to be done urgently to save them from further sanctions and possible litigations.

The partners of these small firms have consulted, sought, and obtained approval of your firm to train them on the requirements of relevant regulatory bodies as part of your firm’s contribution to the accountancy profession in general and in recognition of your firm as one of the reputable big firms. Your partner has directed that you prepare and make a presentation to help improve their service delivery standards.

Required:

Prepare an outline for a paper that will be used to address these practitioners on the following:

a. The consequences and actions that could arise as a result of poor quality professional service delivery.

(3 Marks)

b. The responsibilities of “key quality control matters” placed on the engagement partner in accordance with ISA 220-Quality Control for an Audit of Financial Statements. (12 Marks)

(Total 15 Marks)