Document ID: chunk:federal_register_of_legislation:F2023C01118:body:0:p69
Version: federal_register_of_legislation:F2023C01118
Segment Type: other
Provision Reference: 
Character Range: 203286–206426

of the firm's system of quality management may include information such as:

           * A description of the monitoring activities, including their nature, timing and extent;

           * Findings, identified deficiencies, and other observations about the firm's system of quality management (e.g., positive outcomes or opportunities for the firm to improve, or further enhance, the system of quality management); and

           * The network's evaluation of the root cause(s) of the identified deficiencies, the assessed effect of the identified deficiencies and recommended remedial actions.

Monitoring Activities Undertaken by the Network Across the Network Firms (Ref: Para. 51(b))

A182.      The information from the network about the overall results of the network's monitoring activities undertaken across the network firms' systems of quality management may be an aggregation or summary of the information described in paragraph A181, including trends and common areas of identified deficiencies across the network, or positive outcomes that may be replicated across the network. Such information may:

           * Be used by the firm:

                   + In identifying and assessing quality risks.

                   + As part of other relevant information considered by the firm in determining whether deficiencies exist in the network requirements or network services used by the firm in its system of quality management.

           * Be communicated to group engagement partners, in the context of considering the competence and capabilities of component auditors from a network firm who are subject to common network requirements (e.g., common quality objectives, quality risks and responses).

A183.      In some circumstances, the firm may obtain information from the network about deficiencies identified in a network firm's system of quality management that affects the firm. The network may also gather information from network firms regarding the results of external inspections over network firms' systems of quality management. In some instances, law or regulation in a particular jurisdiction may prevent the network from sharing information with other network firms or may restrict the specificity of such information.

A184.      In circumstances when the network does not provide the information about the overall results of the network's monitoring activities across the network firms, the firm may take further actions, such as:

           * Discussing the matter with the network; and

           * Determining the effect on the firm's engagements, and communicating the effect to engagement teams.

Deficiencies in Network Requirements or Network Services Identified by the Firm (Ref: Para. 52)

A185.      As network requirements or network services used by the firm form part of the firm's system of quality management, they are also subject to the requirements of this ASQM regarding monitoring and remediation. The network requirements or network services may be monitored by the network, the firm, or a combination of both.
Example of when a network requirement or network service is monitored