ASCQC1 requires the audit:
A) firm to establish policies and procedures to provide reasonable assurance to maintain an appropriate level of independence.
B) firm to not receive fees totalling more than 15% of total fees from one audit client.
C) firm to establish procedures to assess the integrity of the audit client.
D) team to be independent.

Question

Quizplus · Accepted Answer

ASCQC1 requires the audit firm to establish policies and procedures to provide reasonable assurance to maintain an appropriate level of independence. This is necessary to ensure that the audit opinion given to the client is unbiased and free from any external influence. It includes policies like not accepting gifts or any other form of incentives from the client that could compromise independence.

B is incorrect as the 15% cap on fees is a requirement of SEC, not ASCQC1.

C is incorrect as there is no such requirement in ASCQC1 to establish procedures to assess the integrity of the client.

D is incorrect as ASCQC1 is about the audit firm's quality control, not the team's independence.

ASCQC1 Requires the Audit