Grant Thornton Audit Review

Each member firm is obligated to submit to an inspection of its quality control system, referred to as the Grant Thornton Audit Review (GTAR), at least once every three years. The GTAR process is designed to monitor member firm compliance with professional standards and global audit policies and procedures. The GTAR is conducted by independent and suitably qualified partners and managers from other member firms under the overall direction of the global audit quality control leader.

GTAR inspection teams review the conduct of audit work performed by each member firm. The inspection process includes an evaluation of policies and procedures of the member firm applicable to its assurance practice, benchmarking those policies and procedures against relevant policies and procedures of the international organisation. The inspection team reviews financial statements, audit reports and engagement work papers and files. The inspection team also interviews partners and staff on various matters.

The GTAR inspection team members assess whether a firm’s system of quality control is designed, implemented and operated to provide the member firm with reasonable assurance that the member firm and its personnel comply with professional standards and applicable legal and regulatory requirements; and the reports issued by the member firm are appropriate in the circumstances. These include leadership responsibilities for quality, ethics and independence, client acceptance and continuance, human resources, engagement performance and monitoring. The inspection team, as part of evaluating engagement performance, also reviews a sample of assurance engagements.

GTAR inspection team members use a proprietary Quality monitoring tool (QMT) to record and track individual findings. Member firm management is provided all of the individual findings identified during the GTAR. This enables the reports to focus on overall conclusions. This approach also provides an effective way of communicating the detailed GTAR findings and results to member firm management.

Upon the conclusion of each GTAR, the global organisation issues a report based on the inspection findings. The report on a firm’s quality control system will be one of the following:

• suitably designed and operating effectively (an ‘unqualified’ report)
• suitably designed and operating effectively except for one or more significant deficiencies, (an ‘except for’ report)
• having material weaknesses in the design or operation of the quality control system, (an ‘adverse’ report).

When the GTAR identifies a deficiency, the member firm is expected to address the deficiency within a reasonable period of time and submit appropriate documentation. When follow-up actions are required by member firms to address findings identified during the GTAR, a further visit or remote assessment is made to review progress in implementing these actions.