Importance of Independent Quality Control Review for CPA
Quality control is a vital element of any accounting practice, especially that provides attestation services. The quality control review for CPA firms was first initiated by the American Institute of Certified Public Accountants nearly 20 years ago. This program was established to ensure that the CPA firms providing attestation services meet higher professional standards.
Establishing and maintaining quality control policies also help CPA firms ensure they meet ethical as well as regulatory requirements, especially around independence. The program facilitates the firms to improve their efficiency, completing tasks with proper review procedures, and issuing deliverables that third parties can rely on.
Six Elements to develop Quality-Control System for CPA
A CPA firm must develop its quality-control system based on the following six elements:
1- Tone at the top
Require the firm’s leadership take on the responsibility for the firm’s system of quality control.
2- Up to date ethical guidelines
The purpose of this element is to guarantee that the firm and its personnel comply with relevant ethical requirements when accepting and performing tasks. The firm should have integrity and objectivity in mind while servicing clients.
3- Professional client-employee relationships
This element is to ensure that there is a clear understanding of the scope of services with the clients. This is normally achieved with a detailed engagement letter with the scope of services and other relevant terms and conditions.
4- Human Resources
The purpose of this element in a quality control system is to ensure that the firm has appropriate personnel who are capable of performing assigned tasks following higher professional standards and are fully committed to ethical guidelines.
5- Engagement Performance
This element is to guarantee that the tasks are consistently performed according to professional standards and guidelines.
This element ensures whether the design of the quality control system is suitable for the firm and whether the firm’s policies and processes are operating effectively.