Sir, in the previous questions asked on peer review, the following difference has been provided by you:
SQC 1 — Specifies principle / policies / procedures to be developed by / at CA Firm level to maintain quality of all types of assignments audits / review / examination of non- historical info / related services
SA 220 — Talks about implementation of firm level quality policies / procedures to individual audit level by engagement partner
Peer Review — Reviewer checks whether ca firm has system of quality control for performing assurance assignments and checks whether it is being implemented. Deficiencies are pointed and ca firm is given chance to improve .
Now, you also stated that incase of non compliance with the recommendations made by the reviewer, the following action shall be taken:
If the report of the reviewer continues to be adverse then the deficiencies as reported shall be referred to a sub group of the Board. The Sub Group shall consider the nature and materiality of the deficiencies contained in the follow-on review and gives its findings within 30 days from the date the said matter has been referred to it by the Board.
If the Board is of the opinion that the findings of the subgroup contains material deficiencies then the Board shall refer the matter to the Council for considering whether the same may be referred to the Disciplinary Directorate for initiating disciplinary action.
The provisions contained in Clause 8.4 of this Statement shall be applicable to Peer Reviews initiated or ordered after April 1, 2014.
My question is, incase if there is non compliance of SA 220 and SQC1, does it make a valid point to modify the audit opinion in audit report? Please elaborate a bit on this.
Please comment on same question in answer section from next time onward.
It is audit firm’s responsibility to implement SQC 1 and SA 220 while conducting audit of a client.
client, his financial statements and audit report on such financial statements has nothing to do with SQC 1 and SA 220.
so auditor will not modify his audit report even if he has not implemented SQC 1 and SA 220 properly.