## SA 220: Engagement Partner's Leadership Responsibility
### Scope
SA 220 deals with quality control for an audit of financial statements. The engagement partner bears overall responsibility for quality on each audit engagement.
### What the Engagement Partner Must Emphasise
The engagement partner's actions and messages to the team must emphasise two things:
1. The importance to audit quality of:
- Performing work that complies with professional, regulatory and legal requirements
- Complying with the firm's quality control policies and procedures as applicable
- Issuing auditor's reports that are appropriate in the circumstances
- The engagement team's ability to raise concerns without fear of reprisals
2. The fact that quality is essential in performing audit engagements.
### SA 220 vs. SQC 1 — Level of Application
| Standard | Applies To | Who is Responsible |
|---|
| SQC 1 | Entire firm | CEO / Managing Partners |
| SA 220 | Individual audit engagement | Engagement Partner |
> SA 220 is premised on the basis that the firm is subject to SQC 1. The firm's quality control system (SQC 1) provides the framework within which the engagement team implements engagement-level quality control per SA 220.
### Example 1
Q20 (MD 1 – 3 Marks): An engagement partner takes overall responsibility for maintaining audit quality per SA 220. What are his objectives?
Answer: The engagement partner's actions and messages must emphasise:
1. The importance to audit quality of: (i) work complying with professional/regulatory/legal requirements, (ii) firm's quality control policies, (iii) appropriate auditor's reports, and (iv) team freedom to raise concerns without fear of reprisals.
2. That quality is essential in performing audit engagements.
### Example 2
Q25 (RTP May 24): 'SA 220 is premised on the basis that the firm is subject to SQC 1.' Explain in the context of audit quality.
Answer:
- SQC 1 applies to the entire firm; SA 220 applies to a particular audit engagement.
- SQC 1 establishes the firm's overall system of quality control.
- Based on this system, engagement teams decide quality control policies for specific engagements per SA 220.
- The engagement partner is responsible for quality control procedures of that particular engagement under SA 220.
- Therefore, SA 220 depends on SQC 1 — within the firm's system of quality control, engagement teams implement applicable quality control procedures.