Document ID: chunk:federal_register_of_legislation:F2023C01118:body:0:p24
Version: federal_register_of_legislation:F2023C01118
Segment Type: other
Provision Reference: 
Character Range: 71121–74304

be absent, or not appropriately designed or implemented.

A12.         The other aspects of the system of quality management consist of the requirements in this ASQM addressing:

           * Assigning responsibilities (paragraphs 20–22);

           * The firm's risk assessment process;

           * The monitoring and remediation process; and

           * The evaluation of the system of quality management.
Examples of deficiencies related to other aspects of the system of quality management

      * The firm's risk assessment process fails to identify information that indicates changes in the nature and circumstances of the firm and its engagements and the need to establish additional quality objectives, or modify the quality risks or responses.

      * The firm's monitoring and remediation process is not designed or implemented in a manner that:

              + Provides relevant, reliable and timely information about the design, implementation and operation of the system of quality management.

              + Enables the firm to take appropriate actions to respond to identified deficiencies such that deficiencies are remediated on a timely basis.

      * The individual(s) assigned ultimate responsibility and accountability for the system of quality management does not undertake the annual evaluation of the system of quality management.

Engagement Team (Ref: Para. Aus 16.4)

A13.         ASA 220[8] provides guidance in applying the definition of engagement team in the context of an audit of a financial report.

External Inspections (Ref: Para. 16(g))

A14.         In some circumstances, an external oversight authority may undertake other types of inspections, for example, thematic reviews that focus on, for a selection of firms, particular aspects of audit engagements or firm-wide practices.

Findings (Ref: Para. 16(h))

A15.         As part of accumulating findings from monitoring activities, external inspections and other relevant sources, the firm may identify other observations about the firm's system of quality management, such as positive outcomes or opportunities for the firm to improve, or further enhance, the system of quality management. Paragraph A158 explains how other observations may be used by the firm in the system of quality management.

A16.         Paragraph A148 provides examples of information from other relevant sources.

A17.         Monitoring activities include monitoring at the engagement level, such as inspection of engagements. Furthermore, external inspections and other relevant sources may include information that relates to specific engagements. As a result, information about the design, implementation and operation of the system of quality management includes engagement-level findings that may be indicative of findings in relation to the system of quality management.

Firm (Ref: Para. 16(i))

A18.         The definition of "firm" in relevant ethical requirements may differ from the definition set out in this ASQM.

Network (Ref: Para. 16(l), 48)

A19.         Networks and the firms within the network may be structured in a variety of ways. For example, in the context of a firm's system