REC, being a small public accountancy firm, has developed a simple yet comprehensive quality review program in order to ensure that its audit field works are substantially done and audit reports as well as audited financial statements are professionally presented to its clients. Commencing January 1, 2003, REC has started adopting in its external audit program the newly promulgated Philippine standards on auditing, which generally conforms with international standards on auditing.
To ensure high quality audits, only an associate auditor or a senior auditor handle the audit field work. In case a junior auditor handles the audit field work, the Firm makes sure that they are supervised by a senior auditor, associate auditor or a partner.
Once the audit field work is finished, the audit working papers are submitted to the partner in-charge for review. If the partner in-charge has some things to be cleared or additional procedures to be performed, the audit working papers file goes back to the field auditor to clear up the partner's queries or for more audit procedures to be done. Once the audit working papers are finally approved by the partner in-charge, the field auditor prepares drafts of the audited financial statements and management letter, if applicable, and submits to the partner for review.
Once the drafts of the audited financial statements and management letter are finally approved by the partner in-charge, drafts of audit reports and notes to the audited financial statements are prepared by the Associate Auditor or partner in-charge.
Once the drafts of audit reports, audited financial statements, notes to audited financial statements and the management letter are ready, they are send by the partner-in charge to another audit partner for quality review. Once the quality review is through, the partner in-charge provides copies of the drafts to the client and an exit conference is scheduled with the client to discuss the drafts.
Once the drafts are finally accepted by the client, the drafts are finalized and copies of the final audit report and audited financial statements are sent immediately to the client.