Document ID: chunk:federal_register_of_legislation:F2023C01119:body:0:p39
Version: federal_register_of_legislation:F2023C01119
Segment Type: other
Provision Reference: 
Character Range: 111392–114436

1 requires the firm to establish a quality objective that addresses differences of opinion that arise within the engagement team, or between the engagement team and the engagement quality reviewer or individuals performing activities within the firm's system of quality management. ASQM 1 also requires that differences of opinion are brought to the attention of the firm and resolved.

A108.      In some circumstances, the engagement partner may not be satisfied with the resolution of the difference of opinion. In such circumstances, appropriate actions for the engagement partner may include, for example:

           * Seeking legal advice; or

           * Withdrawing from the audit engagement, when withdrawal is possible under applicable law or regulation.

Monitoring and Remediation (Ref: Para. 39)

A109.      ASQM 1 sets out requirements for the firm's monitoring and remediation process. ASQM 1 requires the firm to communicate to engagement teams information about the firm's monitoring and remediation process to enable them to take prompt and appropriate action in accordance with their responsibilities.[45] Further, information provided by members of the engagement team may be used by the firm in the firm's monitoring and remediation process, and exercising professional judgement and professional scepticism while conducting the audit may assist the members of the engagement team in remaining alert for information that may be relevant to that process.

A110.      Information provided by the firm may be relevant to the audit engagement when, for example, it relates to findings on another engagement performed by the engagement partner or other members of the engagement team, findings from the local firm office or inspection results of previous audits of the entity.

A111.      In considering information communicated by the firm through its monitoring and remediation process and how it may affect the audit engagement, the engagement partner may consider the remedial actions designed and implemented by the firm to address identified deficiencies and, to the extent relevant to the nature and circumstances of the engagement, communicate accordingly to the engagement team. The engagement partner may also determine whether additional remedial actions are needed at the engagement level. For example, the engagement partner may determine that:

           * An auditor's expert is needed; or

           * The nature, timing and extent of direction, supervision and review needs to be enhanced in an area of the audit where deficiencies have been identified.

    If an identified deficiency does not affect the quality of the audit (e.g., if it relates to a technological resource that the engagement team did not use) then no further action may be needed.

A112.      An identified deficiency in the firm's system of quality management does not necessarily indicate that an audit engagement was not performed in accordance with Australian Auditing Standards and applicable legal and regulatory requirements, or