Quality Assurance Grading System

The Quality Assurance process will result in a report which is issued to the member/member firm which will state a final grade awarded to the member/member firm.

The grade awarded will determine the follow up action required by the member/member firm.

The member/member firm will awarded a grade as follows;

  1. “Grade 1” – The firm has adequate arrangements in place in respect of the matters referred to in 10.3 (a) – (f) and no further action or follow-up is required.
  2. “Grade 2” – The firm has a small number of minor issues with their arrangements in respect of the matters referred to in 10.3 (a) – (f). The firm will be required to address and report back to the Monitoring Committee on within an eight week period.
  3. “Grade 3” – The firm has a moderate number of minor issues with their arrangements in respect of 10.3 (a) – (f). The firm will be required to address these matters and report back to the Monitoring Committee within an eight-week period and will be subject to a revisit in six months, or whenever the Monitoring Committee feels is appropriate.
  4. “Grade 4” – The firm has a large number of minor issues or a small number of significant issues with their arrangements in respect of 10.3 (a) – (f). The firm will be required to address these matters and report back to the Monitoring Committee within four weeks. In addition they will be required to immediately engage appropriate professional guidance from an appropriate source. This may include requiring the firm to obtain some or all of the following:
    1. Professional advice on standards, ethics, technical or legal matters from an individual or firm acceptable to the Monitoring Committee.
    2. A hot file review by a firm specialising in the provision of hot file reviews of a specific file or files in advance of an audit opinion being signed by the auditor. A copy of the report of the hot file reviewer must be forwarded by the hot file reviewer to the Institute within 7 days of its completion.
    3. A hot file review of all audit files for a specified or unspecified period of time period, or in any other form that the Monitoring Committee feels is appropriate.
    4. Restriction of the types of work that the firm may undertake.
    5. Any other restrictions or recommendations that the Monitoring Committee deems appropriate or necessary.
  5. “Grade 5” – The firm has a large number of significant issues with their arrangements with respect to 10.3 (a) – (f). Prompt action will be taken by the Monitoring Committee in respect of any firm receiving a “Grade 5”. This action will include the suspension of the Members Practising Certificate and referral of the matter to the Director of Professional Conduct as a Complaint. The Committee many also take any other actions that it thinks is desirable, necessary and/or in the public interest.