Section 31E (1)(d) of the Securities Commission Act, 1993 (“SCA”) provides that one of the key responsibilities of the AOB is to conduct inspections and monitoring programs on auditors to assess the degree of compliance with auditing and ethical standards.
In discharging the above responsibilities, the AOB may inspect an audit firm of PIEs under a regular inspection program or a special inspection program.
Under either program, an AOB inspection may be carried out at the firm level or engagement level or both. A firm review focuses on the review of an audit firm’s quality control systems and practices and the degree of compliance with the requirements of the International Standards of Quality Control 1 (“ISQC 1”). An engagement review aims to assess the degree of compliance with auditing and ethical standards of an audit engagement conducted by an auditor.