Document ID: chunk:federal_register_of_legislation:F2020C00630:reg:25:p14
Version: federal_register_of_legislation:F2020C00630
Segment Type: reg
Provision Reference: reg 25 (pt 14/31)
Character Range: 47466–50764

as a result of the monitoring process and determine whether they are either:

(a)                Instances that do not necessarily indicate that the firm's system of quality control is insufficient to provide it with reasonable assurance that it complies with AUASB Standards, relevant ethical requirements, and applicable legal and regulatory requirements, and that the reports issued by the firm or engagement partners are appropriate in the circumstances; or

(b)                Systemic, repetitive or other significant deficiencies that require prompt corrective action.

50.               The firm shall communicate to relevant engagement partners and other appropriate personnel deficiencies noted as a result of the monitoring process and recommendations for appropriate remedial action.  (Ref: Para. A69)

51.               Recommendations for appropriate remedial actions for deficiencies noted shall include one or more of the following:

(a)                Taking appropriate remedial action in relation to an individual engagement or member of personnel;

(b)                The communication of the findings to those responsible for training and professional development;

(c)                Changes to the quality control policies and procedures; and

(d)                Disciplinary action against those who fail to comply with the policies and procedures of the firm, especially those who do so repeatedly.

52.               The firm shall establish policies and procedures to address cases where the results of the monitoring procedures indicate that a report may be inappropriate or that procedures were omitted during the performance of the engagement.  Such policies and procedures shall require the firm to determine what further action is appropriate to comply with relevant AUASB Standards, relevant ethical requirements, and applicable legal and regulatory requirements, and to consider whether to obtain legal advice.

53.               The firm shall communicate at least annually the results of the monitoring of its system of quality control to engagement partners and other appropriate individuals within the firm, including the firm's chief executive officer or, if appropriate, its managing board of partners.  This communication shall be sufficient to enable the firm and these individuals to take prompt and appropriate action where necessary in accordance with their defined roles and responsibilities.  Information communicated shall include the following:

(a)                A description of the monitoring procedures performed.

(b)                The conclusions drawn from the monitoring procedures.

(c)                Where relevant, a description of systemic, repetitive or other significant deficiencies and of the actions taken to resolve or amend those deficiencies.

54.               Some firms operate as part of a network and, for consistency, may implement some of their monitoring procedures on a network basis.  Where firms within a network operate under common monitoring policies and procedures designed to comply with this Standard, and these firms place reliance on such a monitoring system, the firm's policies and procedures shall require that:

(a)                At least annually, the network communicate the overall scope, extent and