AU-C Section 220.01-08: Quality Control (Scope and Objectives)

AU-C Section 220.01-08 says:

"Introduction

Scope of This Section
 
.01 This section addresses the specific responsibilities of the auditor regarding quality control procedures for an audit of financial statements. It also addresses, when applicable, the responsibilities of the engagement quality control reviewer. This section also applies, adapted as necessary, to other engagements conducted in accordance with generally accepted auditing standards (GAAS) (for example, a review of interim financial information conducted in accordance with section 930, Interim Financial Information). This section is to be read in conjunction with the AICPA Code of Professional Conduct and other relevant ethical requirements.
 
.02 Although Statements on Quality Control Standards are not applicable to auditors in government audit organizations, this section is applicable to auditors in government audit organizations who perform financial audits in accordance with GAAS. 

System of Quality Control and the Role of the Engagement Teams
 
.03 Quality control systems, policies, and procedures are the responsibility of the audit firm. Under QC section 10, A Firm's System of Quality Control, the firm has an obligation to establish and maintain a system of quality control to provide it with reasonable assurance that 

1. the firm and its personnel comply with professional standards and applicable legal and regulatory requirements and
2. reports issued by the firm are appropriate in the circumstances.

.04 Within the context of the firm's system of quality control, engagement teams have a responsibility to implement quality control procedures that are applicable to the audit engagement and provide the firm with relevant information to enable the functioning of that part of the firm's system of quality control relating to independence.
 
.05 Engagement teams are entitled to rely on the firm's system of quality control, unless the engagement partner determines that it is inappropriate to do so based on information provided by the firm or other parties. 

.06 The engagement partner may use the assistance of other members of the engagement team or other personnel within the firm in meeting the requirements of this section. The requirements imposed by this section on engagement partners do not relieve other members of the engagement team of any of their professional responsibilities.
 
Effective Date
 
.07 This section is effective for engagements conducted in accordance with GAAS for periods ending on or after December 15, 2012.
 
Objective
 
.08 The objective of the auditor3 is to implement quality control procedures at the engagement level that provide the auditor with reasonable assurance that

1. the audit complies with professional standards and applicable legal and regulatory requirements and
2. the auditor's report issued is appropriate in the circumstances."

AU-C Section 220 provides the requirements for Quality Control in the audit of financial statements.  It also discusses the requirements of the quality control review, if applicable, and should be read in conjunction with the AICPA Code of Professional Conduct.

Best practices for quality control policies are discussed in QC Section 10 "A Firm's System of Quality Control", which can be found at this link: https://www.aicpa.org/content/dam/aicpa/research/standards/auditattest/downloadabledocuments/qc-00010.pdf

QC Section 10 requires that the audit firm establish and maintain a system of quality control that provides reasonable assurance that the firm and its personnel comply with professional standards and legal and regulatory requirements, and the reports issued by the firm are appropriate in the circumstances.  To fulfill that responsibility, QC Section 10 addresses the following topics:

• Leadership responsibilities for quality within the firm
• Relevant ethical requirements
• Acceptance and continuance of client relationships and specific engagements
• Human resources
• Engagement performance
• Monitoring

Engagement teams have a responsibility to comply with the quality control policies implemented by the audit firm, especially those related to independence.  In addition, the engagement team is entitled to rely on the firm's system of quality control, for example:

• 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.
• adherence to applicable legal and regulatory requirements through the monitoring process.

Many of the requirements in this section are addressed to the engagement partner; but the engagement partner may delegate some of the duties to others within the firm.  In turn, the duties imposed on engagement partners in this section does not relieve other engagement team members of their duties.

https://www.aicpa.org/content/dam/aicpa/research/standards/auditattest/downloadabledocuments/au-c-00220.pdf