Grant Thornton International Audit Review

Find out more here about:

The Grant Thornton International Audit Review (GTAR)
Frequency of GTAR inspections
Action plan review
Remedial actions

The Grant Thornton International Audit Review (GTAR) programme is part of the overall quality assurance monitoring procedures of Grant Thornton International, and under this programme every member firm that provides assurance services, whether to publicly or privately held businesses, is subject to review at least once every three years. The GTAR programme reviews the conduct of audit work performed by each member firm. Assessments evaluate policies and procedures of the member firm applicable to its assurance practice, benchmark those policies and  procedures against relevant policies and procedures of the international organisation, review financial statements and audit reports that have been issued, review engagement files, and interview partners and staff on various matters.

The principal objective of the GTAR programme is to monitor a member firm’s compliance with those expectations and tools that help promote quality throughout the Grant Thornton International organisation. Personnel conducting the GTAR programme are required to:

• evaluate whether audits by member firms are performed in accordance with professional standards and Grant Thornton International audit methodology (which incorporates International Standards on Auditing); 
• assess the attitude toward quality that is exhibited by the member firm’s leadership and how that attitude affects the development of a culture of high quality performance. This is commonly referred to as the “tone at the top”; 
• determine that, on their face, audit reports issued by member firms appear appropriate to the circumstances for the engagements reviewed;
• review compliance by member firms with applicable ethical and independence standards; 
• review the member firm’s compliance with ISQC 1 and the related Grant Thornton International policies and procedures.

The worldwide director – quality control oversees the GTAR programme. There are two main aspects of the GTAR programme: GTAR inspections and action plan reviews. During 2007, Grant Thornton International carried out 49 GTAR inspections and 30 action plan reviews.

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Frequency of GTAR inspections
Every member firm that provides assurance services is subject to an inspection at least once every three years. Firms that are registered with the US Public Company Accounting Oversight Board (PCAOB) are subject to a GTAR inspection every two years, until such time as the firm undergoes a review by the PCAOB, or an equivalent review by a local regulator. For those firms where the overall results of the GTAR inspections are not satisfactory, the firm is expected to address the deficiency within a reasonable period of time and submit appropriate documentation to Grant Thornton International. An accelerated GTAR assessment would be performed after the next “audit season” in order to give the member firm the opportunity to demonstrate improved results.

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Action plan reviews
During the GTAR inspection process, recommendations are made to improve a firm’s overall system of quality control. In the year following the GTAR inspection a member of the Grant Thornton International quality control team visits the member firm to review its implementation of these recommendations. These visits are referred to as action plan reviews. In some cases, the worldwide director – quality control may decide that an action plan review is not necessary.

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Remedial actions
One of the principal aims of Grant Thornton International is the setting and maintenance of standards for continued membership within the organisation. As stated in other Grant Thornton International policies and procedures these include, among others, compliance with all professional, statutory and regulatory mandates governing the performance of audit and other attest engagements. Grant Thornton International has established policies for remediating violations and deficiencies identified in a GTAR inspection. This policy includes flexible and graduated actions, in addition to expulsion, as remedial responses to violations or deficiencies identified in a GTAR inspection. The type of remedial action recommended will depend on the nature and severity of the violation or deficiency. The violations, deficiencies or criticisms that surface in a GTAR inspection are categorised as severe, moderate or sporadic. A number of factors influence the categorisation including, but not limited to, the size of a member firm, its risk profile and quality control systems, all of which will be considered in determining which remedial approach and actions are appropriate. The remedial measures and actions will be tailored to the specific situation.

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