Document ID: chunk:federal_register_of_legislation:F2023C01118:body:0:p60
Version: federal_register_of_legislation:F2023C01118
Segment Type: other
Provision Reference: 
Character Range: 176099–179406

Address selecting engagement partners in a manner that is unpredictable; and

      * Address when it is necessary or appropriate to select engagement partners more, or less, frequently than the standard period set out in the policy, for example:

              + The firm may select engagement partners more frequently than the standard period set out in the firm's policy when:

                                Multiple deficiencies have been identified by the firm that have been evaluated as severe, and the firm determines that a more frequent cyclical inspection is needed across all engagement partners.

                                The engagement partner performs engagements for entities operating in a certain industry where there are high levels of complexity or judgement.

                                An engagement performed by the engagement partner has been subject to other monitoring activities, and the results of the other monitoring activities were unsatisfactory.

                                The engagement partner has performed an engagement for an entity operating in an industry in which the engagement partner has limited experience.

                                The engagement partner is a newly appointed engagement partner, or has recently joined the firm from another firm or another jurisdiction.

           * The firm may defer the selection of the engagement partner (e.g., deferring for a year beyond the standard period set out in the firm's policy) when:

                                Engagements performed by the engagement partner have been subject to other monitoring activities during the standard period set out in the firm's policy; and

                                The results of the other monitoring activities provide sufficient information about the engagement partner (i.e., performing the inspection of completed engagements would unlikely provide the firm with further information about the engagement partner).

A154.      The matters considered in an inspection of an engagement depend on how the inspection will be used to monitor the system of quality management. Ordinarily, the inspection of an engagement includes determining that responses that are implemented at the engagement level (e.g., the firm's policies and procedures in respect of engagement performance), have been implemented as designed and are operating effectively.

Individuals Performing the Monitoring Activities (Ref: Para. 39(b))

A155.      The provisions of relevant ethical requirements are relevant in designing the policies or procedures addressing the objectivity of the individuals performing the monitoring activities. A self-review threat may arise when an individual who performs:

           * An inspection of an engagement was:

                   + In the case of an audit of a financial report, an engagement team member or the engagement quality reviewer of that engagement or an engagement for a subsequent financial period; or

                   + For all other engagements, an engagement team member or the engagement quality reviewer of that engagement.

           * Another type of monitoring activity had participated in designing, executing or operating the response being monitored.

A156.      In some circumstances, for