How Can Reviewers Help Firms Understand Monitoring?

Peer Review Guide

Peer Review Guide > Summary of Statements on Quality Control Standards

How Can Reviewers Help Firms Understand Monitoring?
n While all firms undergoing peer reviews must have adopted monitoring procedures, many firms may still have difficulty understanding the monitoring standard. It can be a great value-added service to inquire about the firm’s understanding of the monitoring process and offer suggestions or clarification about how to effectively implement the process.

n Review the Standards at the Exit Conference.. Discuss the new changes with firms during their exit conferences. Firms with well-established systems of quality control may not find it necessary to make significant changes to their policies or procedures. See the summary of the monitoring standard for additional guidance.

n Differentiate Between Monitoring and Inspection.. Some firms have difficulty understanding how to effectively implement the monitoring standard. In particular, firms may struggle with differentiating monitoring, as an element of quality control, and inspection which is a monitoring procedure. One way to help firms understand the difference might be to explain that monitoring is the collective effort of a number of on-going procedures and that inspection is only one of those procedures.

n Suggest Ways for a Firm to Improve its Monitoring Plan. Your current understanding of the firm’s system is the best source of information. Review the firm’s current monitoring policies and procedures. Determine which procedures allow the firm to best identify and communicate the need for:

Changes in the design of its QC system.
Improved compliance with its policies and procedures.

Next, analyze whether the design and application of the current procedures are likely to be effective in achieving the objectives of monitoring. Here are a few questions to consider:

Should the firm consider additional monitoring procedures?
Should the firm consider the use of new or different practice aids in its performance or documenting of monitoring?
Are the personnel who perform monitoring appropriately qualified to identify issues that should be identified as part of monitoring procedures?
Do monitoring procedures include consideration of non-engagement performance areas such as personnel management, client acceptance and continuance and independence?
Can the firm revise any of its current procedures to achieve greater efficiency in its monitoring procedures?

Finally, offer the firm suggestions about how it might improve its monitoring policies and procedures. Here are a few examples of the kinds of suggestions, if they apply, that you might offer a firm:

Add a certain monitoring procedure, for example, review of administrative or personnel files.
Change the timing of procedures, for example, engagement inspection procedures might be performed on an ongoing basis rather than at a fixed time of year.
Change or rotate the assignment of personnel performing monitoring procedures.
Improve the methods of communicating the results of monitoring.
Suggest ways for the firm to improve documentation of its monitoring procedures.
Suggest ways for the firm to improve monitoring its professional development programs, for example, by monitoring with the goal of maintaining or increasing the firm’s overall knowledge base in the most efficient/effective way.
Show the firm how it might include pre-issuance or post-issuance reviews as part of its monitoring procedures.