International Quality Standards for Auditors: Uruguay

The International Quality Control Standard 1 (ISQC) deals with the responsibilities that an audit firm has in relation to its quality control system of its assignments, whether they are audits, review of financial statements and other assignments related to granting a reasonable degree of security.

This standard applies to all audit firms and professionals who perform audits or review work.

The objective of the standard is to establish and maintain a quality control system that provides reasonable assurance that the firm and its staff comply with professional and legal standards and that the reports issued by professionals are appropriate to the circumstances.

What elements should a quality control system include?

The audit firm must establish and maintain a system that includes policies and procedures that include:

• Quality leadership responsibilities within the firm
• Ethical requirements
• Acceptance and continuity of customer relationships
• Human Resources
• Development of commissioning
• Tracking or monitoring

These policies and procedures related to the topics mentioned above should be documented, for example in a manual, and shared with the entire team of the firm.
We will briefly describe what each of the elements of the quality control system mean.

In relation to leadership responsibilities, it is necessary that in the organization there is a leader in relation to quality. He must be an executive of the firm, a responsible partner, who ensures the development of an internal culture in favor of quality and who assumes the ultimate responsibility for having and maintaining the quality system.

Regarding the ethical requirements, the firm will design procedures that ensure that both the firm and its personnel comply with the ethical requirements, and independence stands out there. In other words, both the firm and the personnel involved must be independent of the audit and review work they carry out. For this, policies and procedures will be established and at least annually all personnel must confirm whether or not they are independent and, if not, detail the conflict.

Regarding the acceptance and continuity of clients and orders, it is necessary to define acceptance procedures, not just any client can be served, it will depend on several factors, including the type of business they do, their adherence to good practices, that is, we must associate our professional name to upright clients. We will also have to analyze if we have the necessary capacity to serve the client or order. This aspect is very important because if we do not have the capacity to do a certain job and we try to do it the same, surely the results are not of quality.

Regarding human resources, the firm must have a system that allows for the proper selection of personnel, and that also has a permanent training system that helps the professional and personal development of the team. Firms must select competent, upright personnel who are well paid.

By carrying out the order, the procedures that the firm has for the proper development of the work are understood, that is, the way in which the work is carried out through teamwork, an adequate level of review of the work, adequate documentation and a good team supervision.

Finally, the follow-up or monitoring refers to the controls that are carried out in a certain period of time that the system is working. International auditing firms have a quality control system normally based on 3 years that allows reviewing the practice in each country and that the general guidelines of the quality control system are met. The review is normally carried out by a firm that is a member of the same network of professionals.

As a final conclusion, we can affirm that maintaining an adequate quality control system and in compliance with the regulations is a task that takes time and money and that not just any firm can sustain it over time, a structure is needed that normally only international firms audit can provide it.