Document ID: chunk:federal_register_of_legislation:F2023C01118:body:0:p49
Version: federal_register_of_legislation:F2023C01118
Segment Type: other
Provision Reference: 
Character Range: 144731–147855

may address quality risks related to quality objectives in resources (e.g., personnel's commitment to quality), relevant ethical requirements and governance and leadership. The specified responses alone are not sufficient to achieve the objectives of the system of quality management.

Relevant Ethical Requirements (Ref: Para. 34(a))

A117.      Relevant ethical requirements may contain provisions regarding the identification and evaluation of threats and how they are to be addressed. For example, the APESB Code provides a conceptual framework for this purpose and, in applying the conceptual framework, requires that the firm use the reasonable and informed third party test.

A118.      Relevant ethical requirements may specify how the firm is required to respond to a breach. For example, the APESB Code sets out requirements for the firm in the event of a breach of the APESB Code and includes specific requirements addressing breaches of the Australian Independence Standards, which includes requirements for communication with external parties.

A119.      Matters the firm may address relating to breaches of the relevant ethical requirements include:

           * The communication of breaches of the relevant ethical requirements to appropriate personnel;

           * The evaluation of the significance of a breach and its effect on compliance with relevant ethical requirements;

           * The actions to be taken to satisfactorily address the consequences of a breach, including that such actions be taken as soon as practicable;

           * Determining whether to report a breach to external parties, such as those charged with governance of the entity to which the breach relates or an external oversight authority; and

           * Determining the appropriate actions to be taken in relation to the individual(s) responsible for the breach.

Complaints and Allegations (Ref: Para. 34(c))

A120.      Establishing policies or procedures for dealing with complaints and allegations may assist the firm in preventing engagement reports from being issued that are inappropriate. It also may assist the firm in:

           * Identifying and dealing with individuals, including leadership, who do not act or behave in a manner that demonstrates a commitment to quality and supports the firm's commitment to quality; or

           * Identifying deficiencies in the system of quality management.

A121.      Complaints and allegations may be made by personnel, or others external to the firm (e.g., clients, component auditors or individuals within the firm's network).

Information That Becomes Known Subsequent to Accepting or Continuing a Client Relationship or Specific Engagement (Ref: Para. 34(d))

A122.      Information that becomes known subsequent to accepting or continuing a client relationship or specific engagement may:

           * Have existed at the time of the firm's decision to accept or continue the client relationship or specific engagement and the firm was not aware of such information; or

           * Relate to new information that has arisen since the decision to accept