For each of the following procedures that are taken from the quality control manual of a public accounting firm, identify the applicable element of quality control from Table 2-2 on page 39 and explain why the procedure is important for the audit engagement,
a. Appropriate accounting and auditing research requires adequate technical reference materials. Each firm professional has online password access through the firm’s website to electronic reference materials on accounting, auditing, tax, and other technical information including industry data.
b. Each audit engagement of the firm is directed by a partner and, in most instances, a manager of the firm. On every engagement, an attempt is made to maintain continuity of at least a portion of the personnel.
c. Audit engagement team members enter their electronic sig-natures in the firm’s engagement management software to indicate the completion of specific audit program steps. At the end of the audit engagement, the engagement management software will not allow archiving of the engagement file until all audit program steps have been electronically signed.
d. At all stages of any engagement, an effort is made to involve professional staff at appropriate levels in the accounting and auditing decisions. Various approvals of the manager or senior accountant are obtained throughout the audit.
e. No employee will have any direct or indirect financial interest, association, or relationship (for example, a close relative serving a client in a decision-making capacity) not otherwise disclosed that might be adverse to the firm’s best interest.
f. Each office of the firm shall be visited at least annually by review persons selected by the director of accounting and auditing. Procedures to be undertaken by the reviewers are illustrated by the office review program.
g. Existing clients of the firm are reviewed on a continuing basis by the engagement partner. Termination may result if circumstances indicate that there is reason to question the integrity of management or its independence, or if accounting and auditing differences of opinion cannot be reconciled. Doubts concerning whether the client- auditor relationship should be continued must be promptly discussed with the director of accounting and auditing.
h. Individual partners submit the nominations of those persons whom they wish to be considered for partner. To become a partner, an individual must have exhibited a high degree of technical competence; must possess integrity, motivation, and good judgment; and must have a desire to help the firm progress through the efficient dispatch of the job responsibilities to which he or she is assigned.
i. Through the continuing employee evaluation and counseling program and through the quality control review procedures as established by the firm, educational needs are reviewed and formal staff training programs modified to accommodate changing needs. At the conclusion of practice office reviews, apparent accounting and auditing deficiencies are summarized and reported to the firm’s director of personnel.