Question

In order to achieve effective quality control, a firm of independent auditors should establish policies and procedures for:

• setting the scope of internal control study and evaluation.

• deciding whether to accept or continue a client.

• setting the scope of audit work.

• determining the minimum procedures necessary for unaudited financial statements.

Answer 1

Answer- In order to achieve effective quality control, a firm of independent auditors should establish policies and procedures for = deciding whether to accept or continue a client.

Explanation- A firm of independent auditors has a responsibility to adopt a system of quality control in conducting an audit practice. In order to achieve effective quality control, a firm of independent auditors should establish policies and procedures for deciding whether to accept or continue a client.

Thus, a firm should establish quality control procedures to provide it with reasonable assurance that its personnel comply with generally accepted auditing standards in its audit engagements.