Auditing Standard ASQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements
Network Requirements or Network ServicesNetwork Requirements or Network Services
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Network Requirements or Network Services
- When the firm belongs to a network, the firm shall understand, when applicable: (Ref: Para. A19, A175)
- The requirements established by the network regarding the firm’s system of quality management, including requirements for the firm to implement or use resources or services designed or otherwise provided by or through the network (i.e., network requirements);
- Any services or resources provided by the network that the firm chooses to implement or use in the design, implementation or operation of the firm’s system of quality management (i.e., network services); and
- The firm’s responsibilities for any actions that are necessary to implement the network requirements or use network services. (Ref: Para. A176)
The firm remains responsible for its system of quality management, including professional judgements made in the design, implementation and operation of the system of quality management. The firm shall not allow compliance with the network requirements or use of network services to contravene the requirements of this ASQM. (Ref: Para. A177)
- Based on the understanding obtained in paragraph 48, the firm shall:
- Determine how the network requirements or network services are relevant to, and are taken into account in, the firm’s system of quality management, including how they are to be implemented; and (Ref: Para. A178)
- Evaluate whether and, if so, how the network requirements or network services need to be adapted or supplemented by the firm to be appropriate for use in its system of quality management. (Ref: Para. A179–A180)
Monitoring Activities Undertaken by the Network on the Firm’s System of Quality Management
- In circumstances when the network performs monitoring activities relating to the firm’s system of quality management, the firm shall:
- Determine the effect of the monitoring activities performed by the network on the nature, timing and extent of the firm’s monitoring activities performed in accordance with paragraphs 36–38;
- Determine the firm’s responsibilities in relation to the monitoring activities, including any related actions by the firm; and
- As part of evaluating findings and identifying deficiencies in paragraph 40, obtain the results of the monitoring activities from the network in a timely manner. (Ref: Para. A181)
Monitoring Activities Undertaken by the Network Across the Network Firms
- The firm shall:
- Understand the overall scope of the monitoring activities undertaken by the network across the network firms, including monitoring activities to determine that network requirements have been appropriately implemented across the network firms, and how the network will communicate the results of its monitoring activities to the firm;