36. What factors should I consider in selecting completed engagements for inspection as part of the monitoring process?

Canadian Standard on Quality Control (CSQC) 1, Quality Control Standards for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance Engagements, provides a list of factors that may affect how a firm organizes its inspection cycle, including the timing of selection of individual engagements. The following are examples of things a firm may consider in establishing an inspection process:

• A firm may find it prudent to inspect complex and/or high-risk engagements annually and other engagements less frequently.
• If results of external practice inspection programs (for example, by the provincial institutes or the Canadian Public Accountability Board) or internal monitoring has identified significant deficiencies in files completed by a particular engagement team, the firm may find it prudent to inspect engagements completed by the particular engagement team more frequently and may select such files without prior notification to the engagement team.
• In the case of a firm with engagements in a variety of industries, or where different types of engagement are performed, a firm may select engagements in a manner that allows the firm to inspect the full spectrum of industries and types of engagement.