By MIA Practice Review Department

Audit firms with Type 3 rating under the practice review framework need to submit the remedial action plan (RAP) one month after receipt of the final practice review report approved by the Practice Review Committee (PRC).

Upon the approval of the RAP by the PRC, the audit firm is reminded to ensure that all action plans and the timelines as stated in the approved RAP are strictly implemented / adhered to. The audit practitioners and their audit engagement team are cautioned to consider the application of the principles and guidance under all the professional standards, based on the distinct characteristics of each engagement. As the approved RAP is only meant to focus on specific areas of the audit and deficiencies noted and serves only as guidance, the listed audit procedures in the approved RAP may not be exhaustive for purpose of addressing all the audit assertions relating to any particular account balance or transaction. Practitioners must recognise that the remedial process is not a one-off exercise to satisfy the requirements of the Practice Review Programme (PRP) but an ongoing continuous project in the interest of elevating the audit quality of the firm.

Monitoring Review

A monitoring review on the implementation of the RAP and its ensuing requirements (as prescribed in the MIA By-Laws) will be imposed on the audit firm three months after the approval of the RAP by the PRC. The onus is on the audit firm to update the PRC on the firm’s progress on the implementation, including providing relevant supporting documents to substantiate the action plan implemented to facilitate the start of the monitoring review and it will be closely monitored by the reviewer. At the first stage of the monitoring review, the PRC expects the audit firm’s audit quality controls and procedures manual should have been established and implemented as it is the backbone towards better audit quality. Failure to update the PRC on the progress might lead to a complaint lodged with the Registrar.

The core focus of the monitoring review is to determine that the weaknesses identified in the practice review report are adequately rectified. Subsequent to the receipt of the audit firm’s update on its rectification progress, the second stage of the monitoring review will be conducted. The reviewer shall adopt an approach to ensure that the firm subjected to the monitoring review has adhered to professional standards, legal and regulatory requirements in the review of audit engagement files.


At the end of the monitoring review,  the factual findings as indicated in the Summary of Monitoring Review Findings (MRF) will be communicated to the sole proprietor or partner of the audit firm being reviewed. During the closing meeting, the practitioner has the opportunity to make representations on the audit work performed and make suggestions and recommendations in relation to the findings made by the reviewer before they sign off the MRF to confirm on the accuracy of the factual findings of the review.

Examples of MRF as below:

A dated draft report (known as Monitoring Review Comments or MRC) will then be sent to the audit firm for their comments subsequent to the closing meeting. Any comments made on the MRC must be submitted in writing within 21 days.

Monitoring Review Result  (MRR)

A meeting of the PRC will be held to consider the Monitoring Review Findings (MRF) and the audit firm’s comments.  Where the monitoring review shows that the audit firm failed to effectively remedy its weaknesses to uphold audit quality and standard, the PRC shall lodge a complaint with the Registrar.


Based on preliminary feedback from the firms, the RAP process allows firms to be more focused in identifying the shortcomings which need to be addressed. Firms should devote considerable attention, time and effort to analyse the deficiencies identified during the practice review exercise and identify the root causes underlying the failure of the quality control system.

The continual support and commitment of the audit firms are critical for the satisfactory outcome of the monitoring review process. The audit firm should proactively look out for improvements on the firm’s overall audit quality as what is effective now may be irrelevant tomorrow.

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