Page 15 - CA Final PARAM Digital Book.

(ii) Complaints and allegations (which do not include those that are clearly frivolous) may originate
from within or outside the firm. They may be made by firm personnel, clients or other third parties.
They may be received by engagement team members or other firm personnel.

Channel
(iii) As part of this process, the firm establishes clearly defined channels for firm personnel to raise any
concerns in a manner that enables them to come forward without fear of reprisals.

Investigation
(iv) The firm investigates such complaints and allegations in accordance with established policies and
procedures. The investigation is supervised by a partner with sufficient and appropriate experience and
authority within the firm but who is not otherwise involved in the engagement, and includes involving
legal counsel as necessary. Small firms and sole practitioners may use the services of a suitably qualified
external person or another firm to carry out the investigation. Complaints, allegations and the responses
to them are documented.

Deficiencies

(v) Where the results of the investigations indicate deficiencies in the design or operation of the firm’s
quality control policies and procedures, or non-compliance with the firm’s system of quality control by
an individual or individuals, the firm takes appropriate action.

QNO Relevance of EQCR New Course – (SM23)
127.750 TITANIUM CNO-- SQC.300

GVN & Associates are auditors of a listed company involved in “fin-tech” sector. The engagement team is
stuck up with some issue pertaining to a particular Ind AS applicable to the company. They have framed a
query and sent to ICAI for expert opinion on the matter. The issue was resolved upon receipt of expert

opinion. Since expert opinion was provided by ICAI, engagement team was of the view that appointment
of engagement quality control reviewer has lost its relevance. Do you agree?

Answer 1. SQC 1: Reference to SQC 1, its full name & its requirement have Quality Control System.
2. Concept: CNO SQC.300 Engagement quality control review

1A. Purpose: Engagement quality control review is a critical part of the audit process, ensuring
significant judgments are objectively examined to minimize the risk of issuing an inappropriate report.
1B. Extent: The complexity of the engagement and the potential risk of an inappropriate report
determine the extent of the review. More complex and higher-risk engagements require a more
comprehensive review.
2A. Mandatory: Engagement quality control review is compulsory for all audits of financial statements
of listed entities, ensuring a higher level of scrutiny and oversight for publicly traded companies.
2B. Criteria: For engagements other than audits of financial statements for listed entities, the firm must
establish criteria.
to determine which cases necessitate the performance of an engagement quality control review.
3. Responsibility: The engagement quality control review does not reduce the responsibilities of the
engagement partner, who remains accountable for the overall quality and accuracy of the engagement.
3. Case Discussion: Discuss given case.
4. Conclusion: Expert’s Opinion is Related to an issue of interpretation. Engagement quality control review
is mandatory for listed entities. The appointment of an engagement quality control reviewer is a separate
and compulsory requirement in audits of listed companies

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