Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TAX RATES - GOODS TAXABLE @ 4% :: cpt :: articles on VAT and GST in India :: empanelment :: ACCOUNTING STANDARDS :: list of goods taxed at 4% :: due date for vat payment :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company :: VAT Audit
News Headlines »
 Income tax returns (ITR) filing guide: 10 excellent tax-saving options other than Section 80C to save money
 TDS Rate Chart for AY 2018-19
 Last date to submit third installment of advance tax is December 15
 5 tax-saving funds that have given stellar returns in the past 5 years
 Find out which ITR Form is suitable for you
  Pr CIT vs. Baisetty Revathi (Andhra Pradesh High Court)
 What is income tax?
 Refund procedure initiated under GST
 Income tax returns (ITR) filing: How to get capital gains tax benefits on assets in own name
 7 avenues to help you save tax under Section 80C of Income Tax Act
 How to make income tax law less taxing

Overdose of QC?
October, 11th 2007
After a spate of regulations over the last couple of years, the ICAI has come out with yet another document Standard on Quality Control 1.

Mohan R. Lavi

The importance of Quality Control (QC) in any area of operation can never be overemphasised in an era when business is transcending boundaries and giving rise to complexities. There is a story about a company in the US which felt that it had adopted the best quality control methodology till a Toyota team came in and proved that the same quality product can be produced in a much lesser time.

QC entered the auditing world too when a couple of top-notch corporates in US sunk apparently with a little bit of a nod from their auditors. After a spate of regulations over the last couple of years, the Institute of Chartered Accountants of India (ICAI) has come out with yet another document Standard on Quality Control (SQC) 1, Quality Control for firms that perform audits and reviews of historical financial information, and other assurance and related service engagements. This Standard is recommendatory from April 1, 2008, and mandatory from April 1, 2009.

QC areas

The Standard starts off by informing one that the Standard on Auditing (SA) 220, Quality Control for Audit work, would also be applicable since it deals with quality control procedures for specific types of engagements. The very fact that there was an erstwhile Auditing and Assurance Standard 17 with the same title implies that quality control has been on the statute book for some time now and, hence, the need for reinventing the wheel needs to be questioned.

It can also be argued that a firm should adopt a single QC policy for every assignment that it does instead of attempting to document different QC procedures for each assignment. The entire substance of QC in a firm has been given six main areas:

Leadership qualities for quality within the firm;

Ethical requirements;

Acceptance and continuance of client relationships and specific engagements;

Human resources;

Engagement performance; and


Although this sounds like a QC chart for a software release, the importance of all these areas can never be overemphasised, as firms would have to commence thinking and working like corporates now.

The write-up on leadership qualities for quality within the firm mentions the title Chief Executive Officer.

Past QC initiatives

Since the early days of its inception, the ICAI has had a Disciplinary Action Committee that has decided on quite a few cases of professional misconduct and the booklet of the ICAI on the same topic contains many examples of such conduct.

The Standard just reemphasises the importance of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour during the conduct of an assignment.

Independence of an auditor has become the subject matter of much debate over the last few years but it is clear that independence of any person is a state of mind and any amount of vigilant legislation cannot make an independent person non-independent and vice-versa.

Before commencing an assignment, the firm is supposed to get reassured that the client has integrity, the firm has the resources and the competency to complete the assignment and can comply with the ethical requirements too.

(The author is a Hyderabad-based chartered accountant.)

The Standard exhorts firms to develop human resources in a manner that the QC mission of the firm is not jeopardised just because of a bad hire. Engagement performance and monitoring detail the steps to be followed during an audit assignment to maintain QC benchmarks.

One of the main benefits of the Sarbanes Oxley Act was the Walk-Through principle which laid out that every year, one walks through every major area of operation right from placement of a purchase order till it is paid out and entered into the General Ledger. Since one assumes that a lot of things are in place during the course of ones normal duties, the Walk-Through can sometimes be an awakening that not everything is hunky-dory. A software company realised that there was a delay in capitalisation of fixed assets by a week after doing a Walk-Through.

Its the documentation

The need for documenting each and every major area of QC initiatives flows right through the Standard. A reading of this Standard and past ones on similar topics, one gets the impression that there is an overdose of literature on the same subject since we have not had any major debacle wherein we can point our fingers at only the auditors.

In case there have been instances wherein, for instance, some banks have wound up, one could blame it on loose legislation and inept supervision. A firm in India gives enough disclaimers in its report, notes on accounts and the management representation letter to escape legal embarrassment.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Organic SEO Outsourcing Organic Search Engine Optimization Outsourcing Organic Website SEO Organic SEO India Website SEO India Organic Search Engine Optimization India Organic Internet SEO India Organic Web

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions