Quality Control of Audit Services Rendering in the Context of External Inspections

Abstract

Statements of the key legal acts regulating quality control of audit services in Ukraine are studied. A review of studies on quality control, conducted by distinguished national scientists, is made.  It enables to highlight controversial and problematic aspects crucial for elaborating methodological and organizational support to high quality external control over the operation of the quality control system at audit entities in Ukraine. It is shown that the auditing practice in Ukraine is subject to a series of normative and legal acts laying methodological grounds for the quality control system in audit firms and determining its operational norms. Main documents (provisions, resolutions etc.) issued by the Audit Chamber of Ukraine, setting the regulatory framework for quality control of audit services and binding for audit entities in Ukraine are highlighted. Bodies charged with quality control of audit services in Ukraine and their authorities are shown. The organizational and methodological framework for the elaboration and implementation of the quality control system in audit and financial reporting reviews are highlighted. It is emphasized that the International Quality Control, Auditing, Review, Other Assurance and Related Services Pronouncements specify the responsibility of an audit firm for the elaborated and implemented quality control system for audit and financial reporting review, and other assurance and related services. From the perspective of International Quality Control, Auditing, Review, Other Assurance and Related Services Pronouncements it is substantiated that an audit firm needs to set and maintain the quality control system that has to include the policies and procedures studied in this article. An overview of inspections of the quality control system in 2016 and their results in Ukraine is made by Ukrainian region. An analysis of the controlling bodies’ performance is made by number of inspections devoted to quality control system. The results of the study allow for making conclusions about the performance of the external control over the operation of the quality system in audit entities inspected. Propositions on the fields of further studies aimed to clarify theoretical definitions and formulate practical recommendations on organization and performance of inspections are given.