STANDARD SSA 220
Quality Control for Audits of Historical Financial Information
The Singapore Standard on Auditing SSA 7 “Quality Control for Audit
Work” was approved by the Council of the Institute of Certified Public
Accountants of Singapore in September 1996.
SSA 220 supersedes SSA 7 of the same title in June 2004.
This revised SSA 220 supersedes SSA 220 “Quality Control for Audit
Work” in March 2005.
Auditors are required to comply with the auditing standards contained
in this SSA in respect of audits of historical financial information for
periods beginning on or after 15 June 2005.
Singapore Standards on Auditing (SSAs) are to be applied in the audit of financial statements. SSAs are also to be applied, adapted as necessary, to the audit of other information and to related services.
SSAs contain the basic principles and essential procedures (identified in bold type black lettering) together with related guidance in the form of explanatory and other material. The basic principles and essential procedures are to be interpreted in the context of the explanatory and other material that provide guidance for their application.
To understand and apply the basic principles and essential procedures together with the related guidance, it is necessary to consider the whole text of the SSA including explanatory and other material contained in the SSA, not just that text which is black lettered.
In exceptional circumstances, an auditor may judge it necessary to depart from an SSA in order to more effectively achieve the objective of an audit. When such a situation arises, the auditor should be prepared to justify the departure.
SSAs need only be applied to material matters.
The Public Sector Perspective (PSP) is set out at the end of an SSA. Where no PSP is added, the SSA is applicable in all material respects to the public sector.
SINGAPORE STANDARD ON AUDITING 220
QUALITY CONTROL FOR AUDIT
Paragraphs Foreword Introduction 1 - 4 Definitions 5 Leadership Responsibilities for Quality on Audits 6 - 7 Ethical Requirements 8 - 13 Acceptance and Continuance of Client Relationships and Specific Audit Engagements 14 - 18 Assignment of Engagement Teams 19 - 20 Engagement Performance 21 - 40 Monitoring 41 - 42 Effective Date 43
STANDARD SSA 220
QUALITY CONTROL FOR AUDITS OF HISTORICAL
This Standard is based on International Standard on Auditing 220.
1. The purpose of this Singapore Standard on Auditing (SSA) is to establish standards and
provide guidance on specific responsibilities of firm personnel regarding quality control
procedures for audits of historical financial information, including audits of financial statements.
This SSA is to be read in conjunction with both the ICPAS and the Accounting and Corporate
Regulatory Authority Codes of Professional Conduct and Ethics (the ICPAS and ACRA
2. The engagement team should implement quality control procedures that are applicable
to the individual audit engagement.
3. Under Singapore Standard on Quality Control (SSQC) 1, “Quality Control for Firms that
Perform Audits and Reviews of Historical Financial Information, and Other Assurance and
Related Services Engagements,” a firm has an obligation to establish a system of quality
control designed to provide it with reasonable assurance that the firm and its personnel
comply with professional standards and regulatory and legal requirements, and that the
auditor’s reports issued by the firm or engagement partners are appropriate in the
4. Engagement teams:
(a) Implement quality control procedures that are applicable to the audit engagement;
(b) Provide the firm with relevant information to enable the functioning of that part of the
firm’s system of quality control relating to independence; and
(c) Are entitled to rely on the firm’s systems (for example in relation to capabilities and
competence of personnel through their recruitment and formal training; independence
through the accumulation and communication of relevant independence information;
maintenance of client relationships through acceptance and continuance systems; and
adherence to regulatory and legal requirements through the monitoring process), unless
information provided by the firm or other parties suggests otherwise.
5. In this SSA, the following terms have the meanings attributed below:
(a) “Engagement partner” – the partner or other person in the firm who is responsible for
the audit engagement and its performance, and for the auditor’s report that is issued on
behalf of the firm, and who where required, has the appropriate authority from a
professional, legal or regulatory body;
(b) “Engagement quality control review” – a process designed to provide an objective
evaluation, before the auditor’s report is issued, of the significant judgments the
engagement team made and the conclusions they reached in formulating the auditor’s
(c) “Engagement quality control reviewer” – a partner, other person in the firm, suitably
qualified external person, or a team made up of such individuals, with sufficient and
appropriate experience and authority to objectively evaluate, before the auditor’s report
is issued, the significant judgments the engagement team made and the conclusions
they reached in formulating the auditor’s report;
(d) “Engagement team” –all personnel performing an audit engagement, including any
experts contracted by the firm in connection with that audit engagement;
(e) “Firm” – a sole practitioner, partnership, corporation or other entity of professional
(f) “Inspection” – in relation to completed audit engagements, procedures designed to
provide evidence of compliance by engagement teams with the firm’s quality control
policies and procedures;
(g) “Listed entity” – an entity whose shares, stock or debt are quoted or listed on a
recognized stock exchange, or are marketed under the regulations of a recognized
stock exchange or other equivalent body;
(h) “Monitoring” – a process comprising an ongoing consideration and evaluation of the
firm’s system of quality control, including a periodic inspection of a selection of ? – an entity under common control, ownership or management with the completed engagements, designed to enable the firm to obtain reasonable assurance firm or any entity that a reasonable and informed third party having knowledge of all that its system of quality control is operating effectively; relevant information would reasonably conclude as being part of the firm nationally or (i) “Network firm”internationally;
(j) “Partner” – any individual with authority to bind the firm with respect to the performance
of a professional services engagement;
(k) “Personnel” – partners and staff;
(l) “Professional standards” – ICPAS engagement standards and relevant ethical
requirements, which ordinarily comprise both the ICPAS and PAB Codes;
(m) “Reasonable assurance” – in the context of this SSA, a high, but not absolute, level of
(n) “Staff” – professionals, other than partners, including any experts the firm employs; and
(o) “Suitably qualified external person” – an individual outside the firm with the capabilities
and competence to act as an engagement partner, for example a partner of another firm,
or an employee (with appropriate experience) of either a professional accountancy body
whose members may perform audits of historical financial information or of an
organization that provides relevant quality control services.
Leadership Responsibilities for Quality on Audits
6. The engagement partner should take responsibility for the overall quality on each audit
engagement to which that partner is assigned.
7. The engagement partner sets an example regarding audit quality to the other members of the
engagement team through all stages of the audit engagement. Ordinarily, this example is
provided through the actions of the engagement partner and through appropriate messages to
the engagement team. Such actions and messages emphasize:
(a) The importance of:
(i) Performing work that complies with professional standards and regulatory and
(ii) Complying with the firm’s quality control policies and procedures as applicable;
and Ethical Requirements (iii) Issuing auditor’s reports that are appropriate in the circumstances; and
8. The engagement partner should consider whether members of the engagement team (b) The fact that quality is essential in performing audit engagements. have complied with ethical requirements.
9. Ethical requirements relating to audit engagements ordinarily comprise both the ICPAS and
PAB Codes together with national requirements that are more restrictive. The ICPAS and PAB
Codes establish the fundamental principles of professional ethics, which include:
(c) Professional competence and due care;
(d) Confidentiality; and
(e) Professional behaviour.
10. The engagement partner remains alert for evidence of non-compliance with ethical
requirements. Inquiry and observation regarding ethical matters amongst the engagement
partner and other members of the engagement team occur as necessary throughout the audit
engagement. If matters come to the engagement partner’s attention through the firm’s
systems or otherwise that indicate that members of the engagement team have not complied
with ethical requirements, the partner, in consultation with others in the firm, determines the
11. The engagement partner and, where appropriate, other members of the engagement team,
document issues identified and how they were resolved.
12. The engagement partner should form a conclusion on compliance with independence
requirements that apply to the audit engagement. In doing so, the engagement partner
(a) Obtain relevant information from the firm and, where applicable, network firms, to
identify and evaluate circumstances and relationships that create threats to
(b) Evaluate information on identified breaches, if any, of the firm’s independence
policies and procedures to determine whether they create a threat to
independence for the audit engagement;
(c) Take appropriate action to eliminate such threats or reduce them to an acceptable
level by applying safeguards. The engagement partner should promptly report to
the firm any failure to resolve the matter for appropriate action; and
(d) Document conclusions on independence and any relevant discussions with the
firm that support these conclusions.
13. The engagement partner may identify a threat to independence regarding the audit
engagement that safeguards may not be able to eliminate or reduce to an acceptable level. In
that case, the engagement partner consults within the firm to determine appropriate action,
which may include eliminating the activity or interest that creates the threat, or withdrawing
from the audit engagement. Such discussion and conclusions are documented.
Acceptance and Continuance of Client Relationships and Specific Audit
14. The engagement partner should be satisfied that appropriate procedures regarding the
acceptance and continuance of client relationships and specific audit engagements
have been followed, and that conclusions reached in this regard are appropriate and
have been documented.
15. The engagement partner may or may not initiate the decision-making process for acceptance
or continuance regarding the audit engagement. Regardless of whether the engagement
partner initiated that process, the partner determines whether the most recent decision
16. Acceptance and continuance of client relationships and specific audit engagements include
? The integrity of the principal owners, key management and those charged with
governance of the entity;
? Whether the engagement team is competent to perform the audit engagement and has
the necessary time and resources; and
? Whether the firm and the engagement team can comply with ethical requirements.
Where issues arise out of any of these considerations, the engagement team conducts the
appropriate consultations set out in paragraphs 30-33, and documents how issues were
17. Deciding whether to continue a client relationship includes consideration of significant matters
that have arisen during the current or previous audit engagement, and their implications for
continuing the relationship. For example, a client may have started to expand its business
operations into an area where the firm does not possess the necessary knowledge or
18. Where the engagement partner obtains information that would have caused the firm to
decline the audit engagement if that information had been available earlier, the
engagement partner should communicate that information promptly to the firm, so that
the firm and the engagement partner can take the necessary action.
Assignment of Engagement Teams
19. The engagement partner should be satisfied that the engagement team collectively has
the appropriate capabilities, competence and time to perform the audit engagement in
accordance with professional standards and regulatory and legal requirements, and to
enable an auditor’s report that is appropriate in the circumstances to be issued.
20. The appropriate capabilities and competence expected of the engagement team as a whole
include the following:
? An understanding of, and practical experience with, audit engagements of a similar
nature and complexity through appropriate training and participation.
? An understanding of professional standards and regulatory and legal requirements.
? Appropriate technical knowledge, including knowledge of relevant information
4 ? Knowledge of relevant industries in which the client operates.
? Ability to apply professional judgment.
? An understanding of the firm’s quality control policies and procedures. Engagement Performance
21. The engagement partner should take responsibility for the direction, supervision and
performance of the audit engagement in compliance with professional standards and
regulatory and legal requirements, and for the auditor’s report that is issued to be
appropriate in the circumstances.
22. The engagement partner directs the audit engagement by informing the members of the
engagement team of:
(a) Their responsibilities;
(b) The nature of the entity’s business;
(c) Risk-related issues;
(d) Problems that may arise; and
(e) The detailed approach to the performance of the engagement.
The engagement team’s responsibilities include maintaining an objective state of mind and an
appropriate level of professional scepticism, and performing the work delegated to them in
accordance with the ethical principle of due care. Members of the engagement team are
encouraged to raise questions with more experienced team members. Appropriate
communication occurs within the engagement team.
23. It is important that all members of the engagement team understand the objectives of the work
they are to perform. Appropriate team-working and training are necessary to assist less
experienced members of the engagement team to clearly understand the objectives of the
24. Supervision includes the following:
? Tracking the progress of the audit engagement.
? Considering the capabilities and competence of individual members of the engagement
team, whether they have sufficient time to carry out their work, whether they understand
their instructions, and whether the work is being carried out in accordance with the
planned approach to the audit engagement. ? Addressing significant issues arising during the audit engagement, considering their
significance and modifying the planned approach appropriately. ? Identifying matters for consultation or consideration by more experienced engagement
team members during the audit engagement.
25. Review responsibilities are determined on the basis that more experienced team members,
including the engagement partner, review work performed by less experienced team members.
Reviewers consider whether:
(a) The work has been performed in accordance with professional standards and regulatory
and legal requirements;
(b) Significant matters have been raised for further consideration;
(c) Appropriate consultations have taken place and the resulting conclusions have been
documented and implemented;
(d) There is a need to revise the nature, timing and extent of work performed;
(e) The work performed supports the conclusions reached and is appropriately documented;
(f) The evidence obtained is sufficient and appropriate to support the auditor’s report; and
(g) The objectives of the engagement procedures have been achieved.
26. Before the auditor’s report is issued, the engagement partner, through review of the
audit documentation and discussion with the engagement team, should be satisfied
that sufficient appropriate audit evidence has been obtained to support the
conclusions reached and for the auditor’s report to be issued.
27. The engagement partner conducts timely reviews at appropriate stages during the
engagement. This allows significant matters to be resolved on a timely basis to the
engagement partner’s satisfaction before the auditor’s report is issued. The reviews cover
critical areas of judgment, especially those relating to difficult or contentious matters identified
during the course of the engagement, significant risks, and other areas the engagement
partner considers important. The engagement partner need not review all audit documentation.
However, the partner documents the extent and timing of the reviews. Issues arising from the
reviews are resolved to the satisfaction of the engagement partner.
28. A new engagement partner taking over an audit during the engagement reviews the work
performed to the date of the change. The review procedures are sufficient to satisfy the new
engagement partner that the work performed to the date of the review has been planned and
performed in accordance with professional standards and regulatory and legal requirements.
29. Where more than one partner is involved in the conduct of an audit engagement, it is
important that the responsibilities of the respective partners are clearly defined and
understood by the engagement team.
30. The engagement partner should:
(a) Be responsible for the engagement team undertaking appropriate consultation
on difficult or contentious matters;
(b) Be satisfied that members of the engagement team have undertaken
appropriate consultation during the course of the engagement, both within the
engagement team and between the engagement team and others at the
appropriate level within or outside the firm;
(c) Be satisfied that the nature and scope of, and conclusions resulting from, such
consultations are documented and agreed with the party consulted; and
(d) Determine that conclusions resulting from consultations have been
31. Effective consultation with other professionals requires that those consulted be given all the
relevant facts that will enable them to provide informed advice on technical, ethical or other
matters. Where appropriate, the engagement team consults individuals with appropriate
knowledge, seniority and experience within the firm or, where applicable, outside the firm.
Conclusions resulting from consultations are appropriately documented and implemented.
32. It may be appropriate for the engagement team to consult outside the firm, for example, where
the firm lacks appropriate internal resources. They may take advantage of advisory services
provided by other firms, professional and regulatory bodies, or commercial organizations that
provide relevant quality control services.
33. The documentation of consultations with other professionals that involve difficult or
contentious matters is agreed by both the individual seeking consultation and the individual
consulted. The documentation is sufficiently complete and detailed to enable an
(a) The issue on which consultation was sought; and
(b) The results of the consultation, including any decisions taken, the basis for those
decisions and how they were implemented.
Differences of Opinion
34. Where differences of opinion arise within the engagement team, with those consulted
and, where applicable, between the engagement partner and the engagement quality
control reviewer, the engagement team should follow the firm’s policies and
procedures for dealing with and resolving differences of opinion.
35. As necessary, the engagement partner informs members of the engagement team that they
may bring matters involving differences of opinion to the attention of the engagement partner
or others within the firm as appropriate without fear of reprisals.
Engagement Quality Control Review
36. For audits of financial statements of listed entities, the engagement partner should:
(a) Determine that an engagement quality control reviewer has been appointed;
(b) Discuss significant matters arising during the audit engagement, including those
identified during the engagement quality control review, with the engagement
quality control reviewer; and
(c) Not issue the auditor’s report until the completion of the engagement quality
For other audit engagements where an engagement quality control review is performed, the
engagement partner follows the requirements set out in subparagraphs (a) to (c).
37. Where, at the start of the engagement, an engagement quality control review is not
considered necessary, the engagement partner is alert for changes in circumstances that
would require such a review.
38. An engagement quality control review should include an objective evaluation of:
(a) The significant judgments made by the engagement team; and
(b) The conclusions reached in formulating the auditor’s report.
39. An engagement quality control review ordinarily involves discussion with the engagement
partner, a review of the financial information and the auditor’s report, and, in particular,
consideration of whether the auditor’s report is appropriate. It also involves a review of
selected audit documentation relating to the significant judgments the engagement team
made and the conclusions they reached. The extent of the review depends on the complexity
of the audit engagement and the risk that the auditor’s report might not be appropriate in the
circumstances. The review does not reduce the responsibilities of the engagement partner.
40. An engagement quality control review for audits of financial statements of listed entities
includes considering the following:
? The engagement team’s evaluation of the firm’s independence in relation to the specific
? Significant risks identified during the engagement (in accordance with SSA 315,
“Understanding the Entity and its Environment and Assessing the Risks of Material
Misstatement”), and the responses to those risks (in accordance with SSA 325,
“Auditor’s Procedures in Response to Assessed Risks”), including the engagement
team’s assessment of, and response to, the risk of fraud.
? Judgments made, particularly with respect to materiality and significant risks.
? Whether appropriate consultation has taken place on matters involving differences of
opinion or other difficult or contentious matters, and the conclusions arising from those