"An effective system of quality control includes a monitoring process designed to provide the firm with reasonable assurance that its policies and procedures relating to the system of quality control are relevant, adequate, and operating effectively. The engagement partner should consider
- the results of the firm's monitoring process as evidenced in the latest information circulated to the engagement partner by the firm and, if applicable, other network firms and
- whether deficiencies noted in that information may affect the audit engagement. (Ref: par. .A32–.A34)"
QC section 10 requires the firm to establish a monitoring process designed to provide it with reasonable assurance that the policies and procedures relating to the system of quality control are relevant, adequate, and operating effectively.
In considering deficiencies that may affect the audit engagement, the engagement partner may consider measures the firm took to rectify the situation that the engagement partner considers sufficient in the context of that audit.
A deficiency in the firm's system of quality control does not necessarily
indicate that a particular audit engagement was not performed in accordance
with professional standards and applicable legal and regulatory requirements
or that the auditor's report was not appropriate.
https://www.aicpa.org/content/dam/aicpa/research/standards/auditattest/downloadabledocuments/au-c-00220.pdf
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