Frequency of Reviews
An audit practice is obliged to carry out cyclical inspections of its Whole Practice Review and completed audit engagement (Cold File Review). The selection of the reviewer and the frequency of this review is determined by the size of the audit practice and should comply with the Guidance Note on Compliance Reviews under ‘Clarified’ ISQC 1 as issued by the Quality Assurance Oversight Committee (February 2011) of the Accountancy Board of Malta.
Sole practitioner without audit staff
Sole practitioners with no employees or subcontracted staff involved on audit work and having no public interest entities as audit clients should carry out an audit compliance review (including a cold file review) at least once every three years. The audit compliance review may be carried out by the practitioner. However, cold file reviews should be carried out by an external person, provided that such person had not acted as an engagement quality control reviewer on that audit.
Audit Compliance Review
| Whole Practice Review | Cold File Review | |
|---|---|---|
| Frequency | Once every 3 years (minimum) |
Once every 3 years (minimum) |
| Reviewer | Internal or External | External (not EQCR reviewer) |
Sole practitioner with audit staff
In the case of a sole practitioner with staff, the cold file review may be carried out at least once every three years by an employee who was not involved on the audit, as long as the staff member is a holder of a practicing certificate in auditing and is experienced in current auditing requirements, did not act as an engagement quality control reviewer on that engagement and as long as the selection criteria are not compromised. Otherwise, such a sole practitioner should use an external reviewer, provided that such person had not acted as an engagement quality control reviewer on that audit.
Audit Compliance Review
| Whole Practice Review | Cold File Review | |
|---|---|---|
| Frequency | Annually | Once every 3 years (minimum) |
| Reviewer | Internal or External | Internal or External (reviewer not involved in audit / EQCR) |
Firm with or without audit staff
In the case of a firm, partners may carry out cold file reviews as long as they were not involved on that audit or acted as engagement quality control reviewer on that audit. Cold file reviews should be carried out as part of the annual audit compliance review process. One audit file from each audit engagement partner should be selected for inspection at least once every three years.
Audit Compliance Review
| Whole Practice Review | Cold File Review | |
|---|---|---|
| Frequency | Annually | Annually (each partner once every three years – minimum) |
| Reviewer | Internal or External | Internal or External (reviewer not involved in audit / EQCR) |
