Monitoring and Remediation ProcessMonitoring and Remediation Process

Monitoring and Remediation Process

1. The firm shall establish a monitoring and remediation process to: (Ref: Para. A138)
   1. Provide relevant, reliable and timely information about the design, implementation and operation of the system of quality management.
   2. Take appropriate actions to respond to identified deficiencies such that deficiencies are remediated on a timely basis.

Designing and Performing Monitoring Activities

1. The firm shall design and perform monitoring activities to provide a basis for the identification of deficiencies.
2. In determining the nature, timing and extent of the monitoring activities, the firm shall take into account: (Ref: Para. A139–A142)
   1. The reasons for the assessments given to the quality risks;
   2. The design of the responses;
   3. The design of the firm’s risk assessment process and monitoring and remediation process; (Ref: Para. A143–A144)
   4. Changes in the system of quality management; (Ref: Para. A145)
   5. The results of previous monitoring activities, whether previous monitoring activities continue to be relevant in evaluating the firm’s system of quality management and whether remedial actions to address previously identified deficiencies were effective; and (Ref: Para. A146–A147)
   6. Other relevant information, including complaints and allegations about failures to perform work in accordance with AUASB standards and applicable legal and regulatory requirements or non-compliance with the firm’s policies or procedures established in accordance with this ASQM, information from external inspections and information from service providers. (Ref: Para. A148–A150)
3. The firm shall include the inspection of completed engagements in its monitoring activities and shall determine which engagements and engagement partners to select. In doing so, the firm shall: (Ref: Para. A141, A151–A154)
   1. Take into account the matters in paragraph 37;
   2. Consider the nature, timing and extent of other monitoring activities undertaken by the firm and the engagements and engagement partners subject to such monitoring activities; and
   3. Select at least one completed engagement for each engagement partner on a cyclical basis determined by the firm.
4. The firm shall establish policies or procedures that:
   1. Require the individuals performing the monitoring activities to have the competence and capabilities, including sufficient time, to perform the monitoring activities effectively; and
   2. Address the objectivity of the individuals performing the monitoring activities. Such policies or procedures shall prohibit the engagement team members or the engagement quality reviewer of an engagement from performing any inspection of that engagement. (Ref: Para. A155–A156)