Document ID: chunk:federal_register_of_legislation:F2023C01118:body:0:p59
Version: federal_register_of_legislation:F2023C01118
Segment Type: other
Provision Reference: 
Character Range: 173063–176366

Examples of matters in paragraph 37 that may be considered by the firm in selecting completed engagements for inspection

           * In relation to the conditions, events, circumstances, actions or inactions giving rise to the quality risks:

                   + The types of engagements performed by the firm, and the extent of the firm's experience in performing the type of engagement.

                   + The types of entities for which engagements are undertaken, for example:

                   Entities that are listed.

                   Entities operating in emerging industries.

                   Entities operating in industries associated with a high level of complexity or judgement.

                   Entities operating in an industry that is new to the firm.

               * The tenure and experience of engagement partners.

           * The results of previous inspections of completed engagements, including for each engagement partner.

           * In relation to other relevant information:

                   + Complaints or allegations about an engagement partner.

                   + The results of external inspections, including for each engagement partner.

                   + The results of the firm's evaluation of each engagement partner's commitment to quality.

A152.      The firm may undertake multiple monitoring activities, other than inspection of completed engagements, that focus on determining whether engagements have complied with policies or procedures. These monitoring activities may be undertaken on certain engagements or engagement partners. The nature and extent of these monitoring activities, and the results, may be used by the firm in determining:

           * Which completed engagements to select for inspection;

           * Which engagement partners to select for inspection;

           * How frequently to select an engagement partner for inspection; or

           * Which aspects of the engagement to consider when performing the inspection of completed engagements.

A153.      The inspection of completed engagements for engagement partners on a cyclical basis may assist the firm in monitoring whether engagement partners have fulfilled their overall responsibility for managing and achieving quality on the engagements they are assigned to.
Example of how a firm may apply a cyclical basis for the inspection of completed engagements for each engagement partner

The firm may establish policies or procedures addressing the inspection of completed engagements that:

      * Set forth the standard period of the inspection cycle, such as the inspection of a completed engagement for each engagement partner performing audits of financial reports once every three years, and for all other engagement partners, once every five years;

      * Set out the criteria for selecting completed engagements, including that for an engagement partner performing audits of financial reports, the engagement(s) selected include an audit engagement;

      * Address selecting engagement partners in a manner that is unpredictable; and

      * Address when it is necessary or appropriate to select engagement partners more, or less, frequently than the standard period set out in the policy, for example:

              + The