1. Consider the following quality control policy and identify the quality control element it relates to: “Designate individuals as specialists to serve as authoritative sources; provide procedures for resolving differences of opinion between audit personnel and specialists.”

2. What is a practice inspection, and what roles does it play in the quality control self-regulation of the profession?

3. Compare the quality inspection reports of the CPAB and PCAOB. Do the public accounting firms in the United States and Canada have similar quality control problems?

4. What is the meaning of quality control as it relates to a public accounting firm?

CPA Canada's Guide for Developing Quality Control Systems in Public Accounting was a study that proposed detailed guidance based on five key components or areas: clients, personnel, engagement procedures, practice administration, and a quality control review program.

Exhibit 2B-1 illustrates the implementation of a quality control system using the five key components included in CPA Canada's study. The study proposed that the areas of client relationships (including independence from the clients) and engagement procedures be given top priority when implementing a system in stages. The right-hand columns in Exhibit 2B-1 suggest priority in setting up a firm-wide quality control system. Note in Exhibit 2B-1 that the five areas have each been subdivided into a series of elements that allow firms to better articulate all the different aspects of quality control. While the exhibit framework is not a standard, it indicates where Canadian guidance may be headed. Note that tax and management advisory services could be included in the framework, but the extent to which they should be considered in the quality control system is controversial.
The International Federation of Accountants (IFAC) issued a standard on quality control, ISQC-1. As a result, CPA Canada added to its Handbook the section, "Canadian Standard on Quality Control, CSQC-1 (was CGSF-QC)," for firms performing assurance engagements. This standard is outlined in Exhibit 2B-2.

There are only minor differences between CSQC-1 and the international equivalent ISQC-1.

Firms can use the evolving quality control standards to develop their own policies and procedures, along with the related documentation. When peer or quality reviews are conducted, the reviewers "audit" the public accounting firm's policies and procedures designed to ensure compliance with the elements of CSQC-1, and perhaps additional criteria. The statements of policy and procedures may vary in length and complexity, depending on the size of the public accounting firm and the regulatory system affecting it.