Document ID: chunk:federal_register_of_legislation:F2023C01118:body:0:p27
Version: federal_register_of_legislation:F2023C01118
Segment Type: other
Provision Reference: 
Character Range: 79407–82587

address the actions of individuals external to the firm in the context of an audit of a financial report.

Service Provider (Ref: Para. 16(v))

A28.         Service providers include component auditors from other firms not within the firm's network.

Applying, and Complying with, Relevant Requirements (Ref: Para. 17)

A29.         Examples of when a requirement of this ASQM may not be relevant to the firm

           * The firm is a sole practitioner. For example, the requirements addressing the organisational structure and assigning roles, responsibilities and authority within the firm, direction, supervision and review and addressing differences of opinion may not be relevant.

           * The firm only performs engagements that are related services engagements. For example, if the firm is not required to maintain independence for related services engagements, the requirement to obtain a documented confirmation of compliance with independence requirements from all personnel would not be relevant.

System of Quality Management

Design, Implement and Operate a System of Quality Management (Ref: Para. 19)

A30.         Quality management is not a separate function of the firm; it is the integration of a culture that demonstrates a commitment to quality with the firm's strategy, operational activities and business processes. As a result, designing the system of quality management and the firm's operational activities and business processes in an integrated manner may promote a harmonious approach to managing the firm, and enhance the effectiveness of quality management.

A31.         The quality of professional judgements exercised by the firm is likely to be enhanced when individuals making such judgements demonstrate an attitude that includes an enquiring mind, which involves:

           * Considering the source, relevance and sufficiency of information obtained about the system of quality management, including information related to the nature and circumstances of the firm and its engagements; and

           * Being open and alert to a need for further investigation or other action.

Responsibilities (Ref: Para. 20–21, 28(d))

A32.         The governance and leadership component includes a quality objective that the firm has an organisational structure and assignment of roles, responsibilities and authority that is appropriate to enable the design, implementation and operation of the firm's system of quality management.

A33.         Notwithstanding the assignment of responsibilities related to the system of quality management in accordance with paragraph 20, the firm remains ultimately responsible for the system of quality management and holding individuals responsible and accountable for their assigned roles. For example, in accordance with paragraphs 53 and 54, although the firm assigns the evaluation of the system of quality management and conclusion thereon to the individual(s) assigned ultimate responsibility and accountability for the system of quality management, the firm is responsible for the evaluation and conclusion.

A34.         An individual(s) assigned responsibility for the matters in paragraph 20 is