KC Lim & Associates

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OVERVIEW OF QUALITY CONTROL MANUAL

A. Leadership Responsibilities for Quality Within KC LIM & ASSOCIATES

–          Leadership Positions

–          Tone at the Top

B. Relevant Ethical Requirements

–          Independence

–          Long Association of Senior Personnel (Including Partner Rotation) on Audit Engagements for Public Interest Entities

–          Conflict of Interest

–          Confidentiality

C. Acceptance and Continuance of Client Relationships and Specific Engagements

–          Acceptance and Continuance

–          New Client Proposals

–          Resignation of a Client Relationship

D. Human Resources

–          Recruitment and Retention

–          Continuing Professional Development

–          Assignment of Engagement Teams

–          Enforcement of Quality Control Policies (Discipline)

–          Rewarding Compliance

E. Engagement Performance

–          Role of the SP as Engagement Leader

–          Consultation

–          Differences of Opinion

–          Engagement Quality Control Review (EQCR)

–          Nature, Timing, and Extent of an Engagement Quality Control Review

–          Engagement Quality Control Reviewer (QCR)

F. Monitoring

–          Monitoring Program

–          Inspection Procedures

–          Report on the Results of Monitoring

–          Evaluating, Communicating, and Remedying Deficiencies

–          Non-compliance

–          Complaints and Allegations

G. Documentation

–          Documentation of the Firm’s Policies and Procedures

–          Documentation of the Engagement

–          Documentation of the Engagement Quality Control Review

–          File Access and Retention

1          OFFICE PROCEDURES

1.1        Aims of this section

1.2        Types of work

1.3        Engagement of a client

1.3.1     Terms

1.3.2     New client packages

1.3.3     Other considerations

1.3.4     One-off assignments

1.3.5     Subcontracting

1.4        Working practices

1.4.1     Staff

1.4.2     Filing

1.4.3     Referencing

1.4.4     Reminder systems

1.4.5     Working papers

1.4.6     Attendance notes

1.4.7     Review

1.4.8     Billing

1.4.9     Record retention

1.4.10   Correspondence

1.5        Insurance

2 AUDIT

2.1        Introduction

2.1.1     Aims

2.1.2     Main risk areas

2.1.3     Terms of Engagement

2.1.4     Objectivity, independence and interaction with audit services

2.2        Planning and control

2.2.1     Client Background Information Sheet

2.2.2     Audit Planning Memorandum

2.2.3     Letters/confirmations to be sent

2.2.4     Issues/matters highlighted in previous year’s audit

2.2.5     Management accounts

2.2.6     Group audit if we are principal auditors

2.2.7     Group audit if we are not principal auditors

2.2.8     Check outstanding bills

2.2.9     Use Audit Progress Report

2.3        Detailed work

2.3.1 Statutory Records Audit

2.3.1.1 Experience staff to conduct statutory records audit

2.3.1.2 Use audit program

2.3.1.3 Use of appropriate audit ticks

2.3.1.4 Inspection of annual return

2.3.1.5 Inspection of register of charges/mortgages

2.3.1.6 Minutes of meetings and resolutions

2.3.2     Financial Statements Audit

2.3.2.1 Commencement of Audit Fieldwork

2.3.2.2 Lead Schedules

2.3.2.3 Supporting Schedules

2.3.2.4 Adjustments

2.3.2.5 Audit ticks/Work done

2.3.2.6 Cross referencing

2.3.2.7 Audit programs

2.3.2.8 Draft accounts

2.4        Completion

2.4.1     Completion of audit files before submission for review

2.5        Other issues

3 ACCOUNTS PREPARATION

3.1        Introduction

3.1.1       Aims

3.1.2       Main risk areas

3.1.3       Terms of engagement

3.1.4       Objectivity, independence and interaction with audit services

3.2        Planning and control

3.2.1       General planning issues and permanent file documentation

3.2.2       Indices

3.2.3       Pre-year end

3.2.4       Booking records in

3.2.5       Controlling the assignment

3.2.6       Timetabling

3.2.7       Budgeting

3.3        Detailed work

3.3.1       Working papers

3.4        Completion

3.4.1       The review process

3.4.2       Calling and casting

3.4.3       Completion questionnaires

3.4.4       Discussion of accounts

3.4.5       Approval

3.5 Other matters

3.5.1       Interaction with taxation

3.5.2       Date recognition issues

4 MANAGEMENT ACCOUNTS

4.1 Introduction

4.1.1     Aims

4.1.2     Main risk areas

4.1.3     Terms of engagement

4.1.4     Objectivity, independence and interaction with audit services

4.2 Planning and control

4.2.1     Overlap with accounts production

4.2.2     Assignments in the office

4.2.3     Assignments at the client’s premises

4.3 Detailed work

4.3.1     Working papers

4.3.2     Assumptions

4.4 Completion

4.4.1     Casting

4.4.2     Review

4.4.3     Quality control

4.4.4     Disclaimers and restrictions on use

4.4.5     Completion questionnaires

4.4.6     If the client will not sign the accounts


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