Updated: Aug 15, 2022
The firm shall establish policies and procedures designed to promote an internal culture recognizing that quality is essential in performing engagements.
Such policies and procedures shall require the firm’s chief executive officer (or equivalent) or, if appropriate, the firm’s managing board of partners (or equivalent) to assume ultimate responsibility for the firm’s system of quality control.
Promoting an Internal Culture of Quality
The firm’s leadership and the examples it sets significantly influence the internal culture of the firm.
The promotion of a quality-oriented internal culture depends on clear, consistent and frequent actions and messages from all levels of the firm’s management that emphasize the firm’s quality control policies and procedures, and the requirement to:
perform work that complies with professional standards and applicable legal and regulatory requirements; and
issue reports that are appropriate in the circumstances.
Such actions and messages encourage a culture that recognizes and rewards high-quality work.
These actions and messages may be communicated by, but are not limited to, training seminars, meetings, formal or informal dialogue, mission statements, newsletters, or briefing memoranda.
They may be incorporated in the firm’s internal documentation and training materials, and in partner and staff appraisal procedures such that they will support and reinforce the firm’s view on the importance of quality and how, practically, it is to be achieved.
Of particular importance in promoting an internal culture based on quality is the need for the firm’s leadership to recognize that the firm’s business strategy is subject to the overriding requirement for the firm to achieve quality in all the engagements that the firm performs.
Promoting such an internal culture includes:
Establishment of policies and procedures that address performance evaluation, compensation, and promotion (including incentive systems) with regard to its personnel, in order to demonstrate the firm’s overriding commitment to quality;
Assignment of management responsibilities so that commercial considerations do not override the quality of work performed; and
Provision of sufficient resources for the development, documentation and support of its quality control policies and procedures
The firm shall establish policies and procedures such that any person or persons assigned operational responsibility for the firm’s system of quality control by the firm’s chief executive officer or managing board of partners has sufficient and appropriate experience and ability, and the necessary authority, to assume that responsibility.
Assigning Operational Responsibility for the Firm’s System of Quality Control
Sufficient and appropriate experience and ability enable the person or persons responsible for the firm’s system of quality control to identify and understand quality control issues and to develop appropriate policies and procedures.
Necessary authority enables the person or persons to implement those policies and procedures.