Document ID: chunk:federal_register_of_legislation:F2020C00630:reg:25:p30
Version: federal_register_of_legislation:F2020C00630
Segment Type: reg
Provision Reference: reg 25 (pt 30/31)
Character Range: 94897–98119

an identification of the specific engagements concerned, although there may be cases where such identification may be necessary for the proper discharge of the responsibilities of the individuals other than the engagement partners.

Complaints and Allegations

Source of Complaints and Allegations (Ref: Para. 55)

A70.         Complaints and allegations (which do not include those that are clearly frivolous) may originate from within or outside the firm.  They may be made by firm personnel, clients or other third parties.  They may be received by engagement team members or other firm personnel.

Investigation Policies and Procedures (Ref: Para. 56)

A71.         Policies and procedures established for the investigation of complaints and allegations may include for example, that the partner supervising the investigation:

           * Has sufficient and appropriate experience;

           * Has authority within the firm; and

           * Is otherwise not involved in the engagement.

The partner supervising the investigation may involve legal counsel as necessary.

Considerations specific to smaller firms

A72.         It may not be practicable, in the case of firms with few partners, for the partner supervising the investigation not to be involved in the engagement.  These small firms and sole practitioners may use the services of a suitably qualified external person or another firm to carry out the investigation into complaints and allegations.

Documentation of the System of Quality Control (Ref: Para. 57)

A73.         The form and content of documentation evidencing the operation of each of the elements of the system of quality control is a matter of judgement and depends on a number of factors, including the following:

           * The size of the firm and the number of offices.

           * The nature and complexity of the firm's practice and organisation.

    For example, large firms may use electronic databases to document matters such as independence confirmations, performance evaluations and the results of monitoring inspections.

A74.         Appropriate documentation relating to monitoring includes, for example:

           * Monitoring procedures, including the procedure for selecting completed engagements to be inspected.

           * A record of the evaluation of:

                   + Adherence to AUASB Standards, relevant ethical requirements, and applicable legal and regulatory requirements;

                   + Whether the system of quality control has been appropriately designed and effectively implemented; and

                   + Whether the firm's quality control policies and procedures have been appropriately applied, so that reports that are issued by the firm or engagement partners are appropriate in the circumstances.

           * Identification of the deficiencies noted, an evaluation of their effect, and the basis for determining whether and what further action is necessary.

Considerations Specific to Smaller Firms

A75.         Smaller firms may use more informal methods in the documentation of their systems of quality control such as manual notes, checklists and forms.
[*]  See ASA 102 Compliance with Ethical Requirements when