3. For the purposes of section 20 of the Act, an audit practice review shall consist of –
(a) an overall firm review; and
(b) an individual file review.
4. An overall firm review may include –
(a) an off-site inspection whereby the auditors of the firm may be required to fill in self assessment questionnaires issued by the Panel;
(b) an on-site inspection to assess compliance with the ISA, the Financial Reporting Act 2004, regulations made under the Act and any rules made by the Council.
5. An individual file review may include the carrying out of an inspection of the audit files of the clients of an audit practice to verify compliance with the ISA, the Financial Reporting Act 2004, regulations made under the Act and any rules made by the Council.
6. In the course of a practice review,
(a) the audit practice shall make available any book, document and record in its possession, or under its control;
(b) the Panel may take any abstract of, or extract from, any such book, document and record; and
(c) the Panel may seek information or clarification from any relevant partner or employee of the audit practice
7. The process of an on-site review shall include –
(a) a notification by the Panel to the audit practice 2 weeks before the review that such review shall take place, within which time the audit practice shall communicate to the Panel its contact persons and the arrangements made with regards to logistics;
(b) a set time-frame for the review, depending on such factors as the size of the audit practice, number of licensed auditors, number of public interest entity clients, and past records;
(c) an opening meeting by the Panel with the management of the audit practice where explanation on the purpose and requirements of the review shall be given;
(d) collaboration of the staff of the audit practice which is considered to be of utmost importance;
(e) communication by the audit practice of all relevant documents to the Panel for inspection; and
(f) a closing meeting by the Panel with management of the audit practice on completion of the review.
8. The Panel shall, within 2 weeks of the completion of the audit practice review, issue a report to the audit practice on its findings with recommendations for improvements, where necessary.
9. The audit practice shall provide to the Panel its management response to the report with an action plan within 30 days of the receipt of the report.
10. The audit practice shall pay the Council a fee of 35,000 rupees per auditor per review carried out.