Explain the responsibilities of the engagement partner under SA 220, Quality Control for an Audit of Financial Statements in relation to: (i)…

SA 220 is modelled on the lines of SQC 1. It describes the responsibilities of the engagement partner in relation to various matters. In the context of the question, the responsibilities relating to leadership responsibilities for quality on audits and relevant ethical requirements are explained below: A. Leadership responsibilities for quality on audits: Leadership responsibility of an engagement partner is to take responsibility for the overall quality on each audit engagement. The actions of the engagement partner and appropriate messages to the other members of the engagement team, in taking responsibility for the overall quality on each audit engagement, emphasise (I) The importance to audit quality of: - (i) Performing work that complies with professional standards and regulatory and legal requirements; (ii) Complying with the firm's quality control policies and procedures as applicable; (iii) Issuing auditor's reports that are appropriate in the circumstances; and (iv) The engagement team's ability to raise concerns without fear of reprisals. (II) The fact that quality is essential in performing audit engagements. B. Relevant ethical requirements: The responsibilities of an engagement partner in relation to ethical requirements in an audit engagement are as under: Identifying a threat to independence regarding the audit engagement that safeguards may not be able to eliminate or reduce to an acceptable level. Reporting by engagement partner to the relevant persons within the firm to determine appropriate action, which may include eliminating the activity or interest that creates the threat, or withdrawing from the audit engagement, where withdrawal is legally permitted.