Document ID: chunk:federal_register_of_legislation:F2023C01118:body:0:p68
Version: federal_register_of_legislation:F2023C01118
Segment Type: other
Provision Reference: 
Character Range: 198832–203587

that need to be considered by the firm in accepting and continuing client relationships and specific engagements.

A179.      The purpose of the network requirements may include the promotion of consistent performance of quality engagements across the network firms. The firm may be expected by the network to implement the network requirements, however, the firm may need to adapt or supplement the network requirements such that they are appropriate for the nature and circumstances of the firm and its engagements.
Examples of how the network requirements or networks services may need to be adapted or supplemented
Network Requirement or Network Service                                                                                                                                                                                                                                                                                                        How the Firm Adapts or Supplements the Network Requirement or Network Service

The network requires the firm to include certain quality risks in the system of quality management, so that all firms in the network address the quality risks.                                                                                                                                                                               As part of identifying and assessing quality risks, the firm includes the quality risks that are required by the network.

                                                                                                                                                                                                                                                                                                                                              The firm also designs and implements responses to address the quality risks that are required by the network.

The network requires that the firm design and implement certain responses.                                                                                                                                                                                                                                                                    As part of designing and implementing responses, the firm determines:

                                                                                                                                                                                                                                                                                                                                                         * Which quality risks the responses address.

                                                                                                                                                                                                                                                                                                                                                         * How the responses required by the network will be incorporated into the firm's system of quality management, given the nature and circumstances of the firm. This may include tailoring the response to reflect the nature and circumstances of the firm and its engagements (e.g., tailoring a methodology to include matters related to law or regulation).
The firm uses individuals from other network firms as component auditors. Network requirements are in place that drive a high degree of commonality across the network firms' systems of quality management. The network requirements include specific criteria that apply to individuals assigned to work on a component for a group audit.  The firm establishes policies or procedures that require the engagement team to confirm with the component auditor (i.e., the other network firm) that the individuals assigned to the component meet the specific criteria set out in the network requirements.

A180.      In some circumstances, in adapting or supplementing the network requirements or network services, the firm may identify possible improvements to the network requirements or network services and may communicate these improvements to the network.

Monitoring Activities Undertaken by the Network on the Firm's System of Quality Management (Ref: Para. 50(c))

A181.      The results of the network's monitoring activities of the firm's system of quality management may include information such as:

           * A description of the monitoring activities, including their nature, timing and extent;

           * Findings, identified deficiencies, and other observations about the firm's system of quality management (e.g.,