The monitoring process comprises two parts:
- An annual assessment of the design and implementation of the firm’s policies and procedures in place to ensure that assurance engagements are being performed with quality.
- A cyclical inspection of completed engagement files that focuses on adherence to professional standards and applicable legal and regulatory requirements.
As such, there should be some form of monitoring being completed by the firm every year. This monitoring should not be confused with the Engagement Quality Control Review (EQCR), specific internal firm policies, or the practice review/inspection conducted by the provincial CPA body. These other reviews are not interchangeable and their existence does not mean your firm has met the monitoring requirements.