The Council wishes to draw attention of all practicing members about the prevalent practice of signing audit and review reports in the name and style of the firm where the individual\u2019s responsibility for signing the audit and review reports is not identified for personal responsibility and accountability. This practice, based on the decisions taken nearly half a century ago, required a reassessment according to the current international practices prevalent in the profession.<\/p>\n
Paragraph 8 of ISA 220 (re-drafted) \u2018Quality Control for an audit of financial statement\u2019 states as follows:<\/p>\n
\u201cThe engagement partner shall take responsibility for the overall quality on each audit engagement to which that partner is assigned.\u201d<\/span><\/strong><\/p>\n In its paragraph 30, ISQC 1 (Re-drafted) \u2018Quality control for firms that perform audits and reviews of financial statements, and other assurance and related services engagements\u2019, states as follows:<\/p>\n \u201cThe firm shall assign responsibility for each engagement to an engagement partner and shall establish policies and procedures requiring that:<\/span><\/strong><\/p>\n (a) The identity and role of the engagement partner are communicated to key members of client management and those charged with governance;<\/span><\/strong><\/p>\n (b) The engagement partner has the appropriate competence, capabilities, and authority to perform the role; and<\/span><\/strong><\/p>\n (c) The responsibilities of the engagement partner are clearly defined and communicated to that partner.\u201d<\/span><\/strong><\/p>\n Further, attention is drawn to paragraph A 37 of ISA 700 (re-drafted) \u2018Forming an opinion and reporting on financial statements\u2019 which states as follows:<\/p>\n \u201cThe auditor’s signature is either in the name of the audit firm, the personal name of the auditor or both, as appropriate for the particular jurisdiction. In addition to the auditor’s signature, in certain jurisdictions, the auditor may be required to declare in the auditor’s report the auditor’s professional accountancy designation or the fact that the auditor or firm, as appropriate, has been recognized by the appropriate licensing authority in that jurisdiction.\u201d<\/span><\/strong><\/p>\n ISA 220 (re-drafted) defines an \u2018engagement partner\u2019 as \u2018the partner or other person in the firm who is responsible for the audit engagement and its performance, and for the auditor\u2019s report that is issued on behalf of the firm, and who, where required, has the appropriate authority from a professional, legal or regulatory body.\u2019<\/p>\n For purpose of clarity it may be noted that the opinion on each audit and review engagement is the collective responsibility of the firm appointed as the auditor\/reviewer and the opinion is the result of consultation with other partners.<\/p>\n However, by signing in his\/her own name alongwith the name of the firm the engagement partner is properly identified who is the person responsible for the audit or the review engagement.<\/p>\n In view of the above it has been decided by the Council that where the auditors\u2019 report on the financial statements or the interim financial information is signed in the firm\u2019s name, the name of the engagement partner shall be identified.<\/p>\n The above shall be applicable on all audit appointments made on or after July 1, 2011<\/p>\n However, with respect to audit appointments made prior to July 1, 2011, the requirements as contained in ATR -19 (Revised 2008) shall prevail.<\/p>\n (230th Meeting of the Council \u2013 December 17, 2011)<\/p>\n Correspondence with ICAP<\/span><\/strong><\/p>\n All correspondence related to policy matters from a firm to the Institute should be signed by a partner in the case of a partnership concerns and by the sole-proprietor in the case of a sole-proprietary concern, in his\/her name along with the name of the firm. Routine correspondence may be signed by any other person authorized in this behalf by the firm.<\/p>\n The statement is issued as a directive of the Council and supersedes ATR 1 and 9. Any contravention thereof shall be deemed to be an act of misconduct liable to punitive action in terms of clause 3 of Part 4 of Schedule I of the Chartered Accountants Ordinance, 1961 and is required to be followed by all practicing members of the Institute.<\/p>\n","protected":false},"excerpt":{"rendered":" Identification of the Engagement Partner in the Auditors\u2019 Report on the Financial Statements \/ Interim Financial Information The Council wishes to draw attention of all practicing members about the prevalent practice of signing audit and review reports in the name and style of the firm where the individual\u2019s responsibility for signing the audit and review […]<\/p>\n","protected":false},"author":14,"featured_media":0,"parent":41,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"class_list":["post-442","page","type-page","status-publish","hentry","entry"],"_links":{"self":[{"href":"https:\/\/icap.org.pk\/aseb\/wp-json\/wp\/v2\/pages\/442"}],"collection":[{"href":"https:\/\/icap.org.pk\/aseb\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/icap.org.pk\/aseb\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/icap.org.pk\/aseb\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/icap.org.pk\/aseb\/wp-json\/wp\/v2\/comments?post=442"}],"version-history":[{"count":1,"href":"https:\/\/icap.org.pk\/aseb\/wp-json\/wp\/v2\/pages\/442\/revisions"}],"predecessor-version":[{"id":443,"href":"https:\/\/icap.org.pk\/aseb\/wp-json\/wp\/v2\/pages\/442\/revisions\/443"}],"up":[{"embeddable":true,"href":"https:\/\/icap.org.pk\/aseb\/wp-json\/wp\/v2\/pages\/41"}],"wp:attachment":[{"href":"https:\/\/icap.org.pk\/aseb\/wp-json\/wp\/v2\/media?parent=442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}