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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Quality management (firm and engagement level)

Kestrel & Co's root cause analysis shows that several engagement files lacked adequate evidence on inventory counts because staff were overloaded during peak season. Which remedial action best addresses the root cause?

The best response is to reassess resource planning and staff allocation for peak periods, since overload is the root cause, and then monitor whether the change works. A reminder email or lowering objectives would not address the cause, and reperforming all counts is disproportionate.

  1. AReassess resource planning and staffing allocation for peak periods, and monitor the remedial action's effectivenessCorrect
  2. BIssue a reminder email to all staff to document inventory counts
  3. CReperform the inventory count on all clients at the firm's cost
  4. DLower the firm's quality objectives for busy periods

Explanation

Remedial actions under ISQM 1 should respond to the root cause, here resource shortage. Adjusting staffing and planning addresses it, and effectiveness must be monitored. A reminder does not tackle workload, and lowering quality objectives is inappropriate. Reperforming counts is impractical and not directed at the cause.

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