Document ID: chunk:federal_register_of_legislation:F2023C01118:body:0:p51
Version: federal_register_of_legislation:F2023C01118
Segment Type: other
Provision Reference: 
Character Range: 150345–153443

its engagements may be enhanced through relevant, reliable and transparent communication by the firm about the activities that it has undertaken to address quality, and the effectiveness of those activities.

A125.      External parties who may use information about the firm's system of quality management, and the extent of their interest in the firm's system of quality management, may vary based on the nature and circumstances of the firm and its engagements.
Examples of external parties who may use information about the firm's system of quality management

      * Management or those charged with governance of the firm's clients may use the information to determine whether to appoint the firm to perform an engagement.

      * External oversight authorities may have indicated a desire for the information to support their responsibilities in monitoring the quality of engagements across a jurisdiction and in understanding the work of firms.

      * Other firms who use the work of the firm in the performance of engagements (e.g., in relation to a group audit) may have requested such information.

      * Other users of the firm's engagement reports, such as investors who use engagement reports in their decision making, may have indicated a desire for the information.

A126.      The information about the system of quality management provided to external parties, including information communicated to those charged with governance about how the system of quality management supports the consistent performance of quality engagements, may address such matters as:

           * The nature and circumstances of the firm, such as the organisational structure, business model, strategy and operating environment.

           * The firm's governance and leadership, such as its culture, how it demonstrates a commitment to quality, and assigned roles, responsibilities and authority with respect to the system of quality management.

           * How the firm fulfills its responsibilities in accordance with relevant ethical requirements, including those related to independence.

           * Factors that contribute to quality engagements, for example, such information may be presented in the form of engagement quality indicators with narrative to explain the indicators.

           * The results of the firm's monitoring activities and external inspections, and how the firm has remediated identified deficiencies or is otherwise responding to them.

           * The evaluation undertaken in accordance with paragraphs 53–54 of whether the system of quality management provides the firm with reasonable assurance that the objectives of the system are being achieved and the conclusion thereon, including the basis for the judgements made in undertaking the evaluation and concluding.

           * How the firm has responded to emerging developments and changes in the circumstances of the firm or its engagements, including how the system of quality management has been adapted to respond to such changes.

           * The relationship between the firm and the network,