BA 105 WFW | An Operations Review and Assessment of SGV&Co.

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah

INTRODUCTION
Significant changes in a countrys economic condition increases the complexity and risks
associated in the business world; thus, prompting companies to employ audit services to secure
the confidence of investors and other business stakeholders. Audit plays a significant role in the
companys attainment of its business objectives making it one of the most sought-after services
by medium-sized and multinational companies.In the Philippines, the leading auditing firm is
SGV & Co., also known as EY Philippines. For 68 years, it has been providing the best possible
service they could offer to the clients. SGV has been performing consistently with their tagline,
Building a better working world. With quality as one of their primary values, the practice of
Total Quality Management in its operations is one of the vital determinants of its success.
For these reasons, the group chose to center its research in examining the TQM practices and
operational performance of SGV, specifically the Makati branch. This research study covers key
TQM elements such as customer satisfaction, top management commitment, continuous
improvement, TQM plan, and ISO certification. Information were gathered mainly through
research and interview. Moreover, with the advancements in information technology and its
increasing importance in the operations of an organization, SGV has changed its ways of
delivering value to the clients. In analyzing SGVs implementation of TQM, the group will also
put into consideration the effects of these changes in the firms overall operational performance.
SGV & CO. AND THE AUDITING INDUSTRY
Past and Present Performance in the Business Environment
SyCip, Gorres, Velayo & Co. (SGV & Co.) is an auditing firm founded in 1946 and based in
Makati City, Philippines with additional offices in Bacolod City, Baguio City, Cagayan de Oro
City, Cavite, Cebu, Davao, and General Santos. It is also a member practice of Ernst & Young
Global, a global leader in assurance, tax, transaction, and advisory services. Currently, SGV
offers External Audit, Compilation and Review Services, Accounting Consultations, International
Accounting Standards Conversions and Advisory, Regulatory Compliance, Extended Audit
Services, Accounting Advisory and Consultation Services on Deal Structuring and Fraud and
Investigative Dispute Services. Since 1996, it has been the only ISO 9002-certified professional
services firm in the country. As of 2007, the firm has employed over 1,800 professionals from
various disciplines, including Certified Public Accountants, lawyers, human resource
professionals and Financial Analyst.

BA 105 WFW | An Operations Review and Assessment of SGV&Co.

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah
Current Trends and News Events Affecting the Organization and Industry
Deloitte, PwC, SGV & Co. and KPMG, known as the Big Four, are the best auditing firms in
the Philippines providing the highest standard in auditing, taxation, management advisory,
business and financial accounting services. Big companies see it as a mark of prestige to have
their audits carried by a member of the Big Four, even though the cost of such a service may be
significantly higher than what would be charged by a smaller firm. This proves the integrity that
the Big Four upholds. Industry experts believe it is unlikely that any existing corporation will be
able to match a member of the Big Four. This is because of the current market share of the Big
Four and previous acquisition and merging.
SGV & Co.'s quality performance has remained unmatched in the industry. SGV maintains its
lead among auditors in the country with a 40% market share of the highest-grossing companies
included in the 2013 edition of BusinessWorld Top 1000 Corporations in the Philippines.
BusinessWorld reports that the SGV & Co. audited the financial statements of 407 of the Top
1000 corporations. It has delivered high quality operation utilizing state-of-the-art facilities,
strong international network and employing highly qualified and competent staff. Manabat
Delgado Amper &Co., an affiliate of Deloitte Touche Tohmatsu, ranks second in the Philippines.
Isla Lipana &Co., an affiliate of PricewaterhouseCoopers, and Manabat Sanagustin & Co.,
affiliate of KPMG, rank third and fourth, respectively.
In International Tax Awarding 2013, SGV was awarded as Philippine Tax Firm of the Year and
the Transactional Tax Team of the Year by Acquisition International Magazine for providing
highest quality services during challenging economic conditions. This affirms the firms
reputation and credibility.
BRIEF ASSESSMENT OF SGV & CO.
SWOT Analysis
The figure below shows an overview of SGV & Co.s strengths, weaknesses, opportunities, and
threats in terms of performance within the auditing industry.
Figure 1 - SWOT of SGV & Co.
STRENGTHS

WEAKNESSES
Strong management and

High turnover rate

BA 105 WFW | An Operations Review and Assessment of SGV&Co.

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah
pricing power

Culture of excellence

Commitment to quality

Brand and company reputation

Customer loyalty and value for

Tradeoff between quality and

number of clients

the client
OPPORTUNITIES

Growth of the business sector

Globalization
Fluctuating economic

THREATS

industry

Competition in the auditing

Loss of the big bosses

conditions and changing business

environment
Strengths
Strong Management and Pricing Power
SyCip, Gorres, and Velayos supervision is an important factor in the establishment of SGVs
image as a superior firm in the auditing industry. These three are known for their brilliance and
virtuous performance in providing different audit services; thus, helps the firm create brand
value. Furthermore, because of SGVs good reputation, companies would prefer employing its
services although it charges relatively higher fees as compared to that of the other auditing
firms.
Culture of Excellence and Commitment to Quality
SGV has achieved its high quality services by building a working environment that fosters a
culture of excellence. The innovative culture in SGV allows continuous improvement for better
performance. It also employs control measures that ensures the delivery of quality services.
Brand and Company Reputation
Since its inception, SGV & Co. has been known for the quality services it provides and the
excellence of its employees. It has established its brand in the auditing industry over the years
and, thus, has gained a significant following.
Customer Loyalty and Value for the Client
SGV focuses their efforts on delivering quality audit services and also ensures the reliability of
their output. By doing so, the firm is able to provide high benefits to the clients resulting to
increased customer value and loyalty.
Weaknesses
High Employee Turnover Rate

BA 105 WFW | An Operations Review and Assessment of SGV&Co.

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah
Due to this, SGV may not be able to retain the best employees. This may lead to less superior
audit services; thus, adversely affecting its brand as a firm of excellence and quality.
Trade-off Between Quality and Number of Clients
Most senior associates in SGV & Co. handle too many clients. This affects the time and effort
allocated to each client.
Opportunities
Globalization and Growth of the Business Sector
As more companies decide to expand in a global dimension and as the number of companies
entering the business world increases, the demand for audit services also increases; thus,
resulting to more business opportunities for SGV & Co. to tap into.
Fluctuating Economic Conditions and Changes in the Business Environment
Uncertainties in the state of the economy also poses an opportunity for SGV & Co. because it
increases the likelihood of companies to employ audit services to provide assurance to
investors and other business stakeholders about a companys financial position.
Threats
Aggressive Competition in the Auditing Industry
The auditing industry is continually growing over the years and, consequently, more firms are
entering the market. Also, the competition among the Big Four auditing firms is increasing and
becoming more aggressive as they expand and grow in the industry.
Loss of the big bosses
The credibility and viability of SGV & Co. as a firm of excellence and quality is mainly
attributable to Sycip, Gorres, and Velayo. Consequently, as the firm starts to lose its original
establishers, the reliability of its services may diminish.
TOTAL QUALITY MANAGEMENT (TQM)
Total quality management is a strategic approach to business improvement aimed to increase
an organizations capability to meet or exceed customer requirements, satisfaction and
expectation at optimum cost utilizing all members of the organization to participate in the
processes, products and services. It integrates quality practices into the culture and activities
through strategy, data and effective communications. Also, it involves streamlining processes
and ensures a proactive work system. Productivity and efficiency is achieved through identifying
and eliminating problems in the processes and system.

BA 105 WFW | An Operations Review and Assessment of SGV&Co.

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah
Design quality which is the inherent value and conformance quality which is quality at the
source and the degree on which design specifications are met should equip products and
services that meet customer objectives.
TQM is directed at identifying processes that need improvement and executing changes that
would answer its needs. It leads to continuously improving people, processes, technology and
machine capabilities. It includes cost savings through elimination of repetitive work, waste
products, rework and reduced customer support costs. Also, these includes ample quality costs
such as appraisal, prevention, internal and external costs that must be taken into consideration.
It frees up management time directing efforts to increased production, diversification and
improvement of products. The Gap model, on the other hand, highlights 5 gaps in quality. These
include the knowledge gap, the standards gap, the delivery gap, the communication gap and the
service gap. These measures include organizational commitment to sustain quality
development.
TOTAL QUALITY MANAGEMENT IN SGV & CO.
TQM has been in the firm since it began with Mr. Washington Sycip. As said by Wilson Tan,
SGV & Co.s Head Assurance, our reputation is based on providing high-quality professional
audit services objectively and ethically to each and every company we audit.
Commitment to Quality
EYs Vision 2020 sets out the strategies and audit methodologies it currently undertakes to
achieve its goal of being the leading audit practice in the accounting profession by 2020. It
emphasizes the need to provide exceptional client service worldwide by committing itself to
quality service that mainly focuses on objectivity, professional skepticism, and compliance to EY
professional standards. By reinforcing the value it places on superior performance within all
service lines, it is able to create an environment conducive to providing quality services by
adhering to EYs global policies and practices.
Specifically, EY Philippines assigns Service Line Quality leaders who oversee quality initiatives
and ensure the upkeep of such actions in their respective service lines. EY Philippines also has
access to the tools and enablers in the EY Area and Global organizations that provide for the

BA 105 WFW | An Operations Review and Assessment of SGV&Co.

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah
standards and policies in providing quality services. In that way, EY Philippines is on track with
EYs global systems.
Moreover, SGV & Co. is the first and only ISO 9001 certified company for assurance services in
the Philippines. ISO 9001, which is provided for by the International Organization for
Standardization (ISO), sets out international standards for an organizations quality
management services. Being ISO 9001 certified means that the organization have complied
with the requirements in providing quality services.
Throughout the years, the company continuously improves its TQM. They encourage their
personnel from all levels to give feedback on the TQM efforts of the company. The company
conducts quality inspections at least twice a year. The following actions are taken by the
company as part of its TQM:
A.

B.

For People
i.

Regular trainings, industry updates

ii.

IFRS certification courses and competency exams

iii.

Active feedback and development system

For Workplace
i.

Regular clean-up

ii.

ISO certification visits

iii.

Implemented house rules

Internal Quality Control System

With the aim of providing high quality professional services and in alignment with EYs Vision
2020, EY Philippines adopts global audit quality control policies and practices that are in
accordance with the International Standards on Quality Control and executes EY Audit Quality
Review (AQR) for the evaluation of the effectiveness of its internal quality control systems and
the inspection of such practices. According to the results of the most recent monitoring
conducted, EY Philippines internal control systems are designed appropriately and are
operating effectively.
Client Acceptance and Continuance
Another fundamental aspect of maintaining quality is the employment of Client Acceptance and
Continuance Policy. EYs policies with respect to this area involve establishing rigorous

BA 105 WFW | An Operations Review and Assessment of SGV&Co.

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah
processes in accepting or continuing client engagements and ensuring ethical requirements
have been complied with. Consistent with these policies, EY Philippines uses the Global Tool for
Acceptance and Continuance (GTAC) which is an intranet-based system to achieve efficient
coordination between the firm, the clients, and the aforementioned activities.
Performing Audits
In its ambition to be the leading audit practice by 2020, Ernst & Young continues to improve its
audit methodologies in performing its audit engagements. In fact, EY will spend US$400m to
develop its technological tools and services to enhance audit quality. In performing audit
engagements, SGV commits to provide high quality in all aspects of its services.The company
already makes sure that its employees possess the appropriate skills to deliver the highest audit
quality possible for the engagement. They consider all pertinent factors such as competence,
engagement size and complexity, specialized industry knowledge and experience, timing of
work, continuity, and opportunities for On-The-Job training.They contribute to the firms
efficiency initiatives by ensuring that engagement work is done within the prescribed budget.
Risk-based audit ensures that work is completed without overruns through scheduling of work
and time management. To comply with auditor rotation requirements, the company also requires
the annual review of its partner assignments. This is to reinforce that they have the desired
capabilities and they can fulfill their engagement responsibilities.
The company employs GAMx, a technological tool that executes EYs Global Audit Methodology
(EY GAM). EY GAM is a global framework that provides consistent application of thought
processes, judgments and procedures in delivering high quality audit service. EY GAM is
standardized into interdependent phases that focus on the risks of the audit engagement. . The
methodology covers all engagements offered by the firm, including documentation, from the
commencement to conclusion of the work / project. The components of EY GAM are:
1.

Requirements typical flow of how EY Philippines executes an audit

2.

Supplemental Guidance requirements and guidance for specific situations and

circumstances that may arise during an audit

3.

Supporting forms, templates and examples leading practice illustrations and

assist in performing and documenting audit procedures

BA 105 WFW | An Operations Review and Assessment of SGV&Co.

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah
EY GAM is designed based on International Standards on Auditing and compliant with relevant
ethical requirements. Furthermore, EY ensures that their audit methodology is adjusted to suit
the local needs of their affiliate company without compromising the quality brought by the
standardized processes. It is attuned to local Philippine auditing standards and regulatory
requirements. For instance, EY GAM also addresses the legal requirements relevant to the
creation and maintenance of working papers as obligated by R.A. 9298 or the Philippine
Accountancy Act of 2004.
GAMx also provides standardized processes in the documentation of the audit engagement. It
enables secure peer-to-peer communications and linked access to the companys databases,
templates and other tools needed in the audit documentation.
Review and Consultation
Another key element in the quality management of the company is the review of its audit work.
Timely and direct professional participation are considered essential in the engagement.
Engagement team members include supervisory and expert members who perform detailed
reviews to check the accuracy and completeness of audit documentation. For example, tax
representatives are also members who review tax compliance and documentation.
In cases of differences of professional opinion, the company adopts policies that are designed
to resolve these issues at the audit engagement team level. These empower members to speak
up in matters concerning the differences. The company does not encourage its employees to
withdraw or step aside from the engagement unless an agreement is reached. In connection
with this, the audit report may only be issued after the matter is resolved through consultation
processes for resolving the differences.
External Quality - Assurance Review
To further ensure the effectiveness of its quality management, SGV is subject to periodic
inspection by the US PCAOB. The last inspection made by PCAOB was in 2012. The report,
issued on 30 November 2012 stated that they:did not identify any audit performance issues
that, in the inspection teams view, resulted in the Firm failing to obtain sufficient appropriate
audit evidence to support its audit opinion on the financial statements or ICFR of the issuer audit
client to fulfill the objectives of its role in the other engagement.And that they:did not identify
anything that is considered to be a quality control defect that warrants discussion in a Board
inspection report.

BA 105 WFW | An Operations Review and Assessment of SGV&Co.

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah
Dealing with Client Complaints
Client complaints are dealt with by the partner in charge of the engagement, engagement
manager and senior associate. Issue are resolved to avoid any long standing conflicts that may
affect the engagement. Also, staff members are highly encouraged to raise issues as soon as
these are noted. With this, client satisfaction is gauged by management executives through
formal and informal feedback and regular client meetings.
Compliance with Legal Requirements
In compliance with EYs Global Code of Conduct, SGV follows a set of standards that guides
them in the face of unethical and illegal activities. The firm establishes policies that adhere to
applicable laws and regulations as part of its goal to build a better working world. These policies
include:
1.

Anti-Bribery Global Policy

This provides a clear cut definition of what actions constitute bribery. In this way, the

firms personnel are directed to avoid these actions. It also provides the actions that the
personnel should take in case bribery is discovered.
2.

Insider Trading Global Policy

This identifies what constitutes insider information and how it should be traded with

unauthorized personnel. Likewise, it also defines the process to be followed in consultations

regarding employee responsibilities.
3.

Trade Sanctions
This provides guidance on activities affected by sanctions issued in other geographies.

4.

Global Personal Data Privacy Policy

This is applied in the maintenance of privacy of the personal data used by the firm. It

establishes the rules in the use and protection of these data.

5.

Document Retention Policy

BA 105 WFW | An Operations Review and Assessment of SGV&Co.

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah
This constitutes policies regarding documentation processes of the company. It applies to all
engagements and personnel and follows the legal requirements in the country with regard to the
creation and maintenance of working papers used in the engagement.

Audit Quality Reviews

The Global Audit Quality Program (AQR) is essential to monitor audit quality through reports
and responsive action plans. Its primary goal is to see whether quality controls are properly
executed to provide reasonable assurance of its compliance with policies, procedures,
professional standards and regulatory requirements.
Engagements reviewed are selected on a risk-based approach asserting audit clients
that are large, complex or of significant public interest. It includes detailed, risk focused file
reviews of listed and non listed engagements to measure compliance with internal policies,
procedures, standards and regulatory requirements.
In 2013, 83% of audit engagements inspected internally were seen to have no
deficiencies. Whether it be material or not, it identifies its root causes, develops action plans and
improves audit quality. Skills and professional competence are standards for selecting AQR
reviewers and team leaders.. Results of these program are communicated and evaluated to
improve quality and provides important practice monitoring feedback for our continuing quality
improvement efforts.
Creating high performance teams
In creating high performance teams, SGV & Co. undertake the following actions:
Developing Outstanding Leaders. SGV & Co. encourages employees to build their skills and
experiences, learn from each other and deliver exceptional client service. This culture of high
performance is supported by EM member firms commitment to recruiting, managing and
retaining top talent;learning and development; and EY member firms inclusive culture.IFRS
updates are made available to employees through pigeon holes to ensure that they are always
up-to-date. Also, there are weekly meetings and consultations with superiors to guide them in
performing their work and to discuss significant matters regarding the engagements.

BA 105 WFW | An Operations Review and Assessment of SGV&Co.

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah
Creating a Culture of High-Performance Teams. This includes the practice of the firm in
valuing diversity and inclusiveness and creating right working environment.The global workforce
is becoming more diverse as a result of an increasingly mobile International workforce and
demograpic and social shifts. An important aspect in this is a focus on inclusiveness. It is
essential to make the diverse mix work. It means equity and opportunity to cater talented people
from any background to rise and become the top. Thus, ensuring opportunities to develop and
advance will help SGV in creating high-performance teasm.

In addition, according to Atty.

Winnie Tan Chung who worked at SGVs Tax Consultancy Group for two years, the firm ensures
that everyone undergoes training that is restricted to formal and actual environment and actual
findings. SGV selects associates that are self-operating, smart and have the best aptitudes.
These new associates are provided with basic modules and programs that will guide them in
performing well at work. EY member firms are regularly cited by external organizations as being
leaders in diversity practices and providing an excellent working environment.
Continuing Education of Statutory Auditors. SGV adopts an extensive and globally
consistent learning curriculum that helps all of their people develop the right technical and
personal leadership skills. Learning programs were developed in response to changes in
accounting and reporting standards, independence and professional standards, and emerging
practice issues. Audit professionals are required to obtain at least 20 hours of continuing
professional education each year and at least 120 hours over a three-year period. 40% of these
must cover technical subjects related to accounting and auditing.
Coaching. Coaching helps transform knowledge and experience into practice.Experienced
professionals are expected to coach and develop less experienced personnel to create a
continual learning environment. SGV also manage the assignment of employees to particular
engagements in a systematic way that ensures the employees that they have exposures to a
range of experiences as part of their own development.
Performance Management. A comprehensive performance management process requires
people to set goals, have clear work expectations, and receive feedback about their
performance. The performance management and development process is designed to help
employees grow and succeed.

BA 105 WFW | An Operations Review and Assessment of SGV&Co.

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah
Job Performance Reviews. Periodic job performance reviews are combined with annual selfappraisal and annual reviews. With the help of more experienced professionals, each
professional identifies opportunities for further development. Furthermore, SGV ensured quality
performance among its employees buy conducting peer evaluation where supervisors and
clients rate associates and vice versa on a quarterly basis.
Internal Communication. Global Accounting and Auditing Information Tool is a standard
accounting and auditing research tool which includes local and international accounting and
auditing standards and interpretative guidance. Moreover, publications are posted to keep
practitioners and clients informed of the latest reporting regulations and guidance such as
international GAAP, IFRS developments and illustrative financial statements.
Overall, SGV & Co. has instilled integrity, respect, and leadership to its people. The company
has been successful in building relationship based on doing the right thing to achieve
unwavering commitment to quality.
Employment of Topnotchers
The firm believes that the quality of its people is paramount to the overall quality of the firm. In
order to be the leading firm in the profession, its people must also be leading in skills and
competence. The company boasts of the top placers in the board exams that joined their
company. They even have a separate section in their website dedicated to these topnotchers.
Accordingly, the firm exerts effort in convincing top placers in the exam to join the firm. Signing
bonuses are even used as incentives to encourage them.
GAP MODEL
Analysis of Gaps on Quality Management
The Gap Model for service quality in SGV is used to identify gaps that lead to unsuccessful
service delivery.
Gap 1: Knowledge Gap (Between customer expectations and management perceptions of those
expectations):SGV may perceive that clients expect that financial statement accounts are
audited accordingly. But in reality, client may be more concerned on their own interest of making
figures look good in expense of reliability.
Gap 2: Standards Gap (Between management perceptions of a target level of quality and the
task of translating these perceptions into executable specifications):SGV perceives a target of

BA 105 WFW | An Operations Review and Assessment of SGV&Co.

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah
quality standard through the usage of PSAs, IFRSs and the ISO. But it is not properly
communicated to and implemented by associates.
Gap 3: Delivery Gap (Between quality specifications and their implementations):SGV trains
associates to properly implement and do the auditing procedures strictly following the schedule.
But then, clear cut strategies and monitoring may not be available, which in return creates
loopholes and inefficiencies in service delivery.
Gap

4:

Communication

Gap

(Between

actual

delivery

performance

and

external

communications with the customer):SGV may project themselves with a very well ventilated
working environment during campus talks. But in reality, the office is very dirty and a lot of
working papers are filed on the desk.
Gap 5: Service Gap (Between customers expectations and perceptions):This arises when
clients misinterpret intentions of management. For example, SGV may want to extend auditing
procedures for subsequent events, but the client may interpret it that SGV just wants additional
payment of fees.
Being one of the top audit firm players with its prestige in quality, it can be deduced that SGV
has effectively addressed these gaps.
SUMMARY AND CONCLUSION
Given our findings above, SGV upholds its commitment to quality with the policies and practices
it undertakes to ensure the quality of the firm. The group was able to deduce that SGV is in a
strong position in the auditing industry. It has been performing exceptionally well. Its
commitment to quality and culture of excellence contributes most in providing the best possible
audit services to their clients. The companys strengths tells us what SGV has achieved through
high quality. The weaknesses are the results of the issues pointed out in the GAP model.
Improvements in quality service of SGV will help SGV ace opportunities while industry grow.The
firm perpetrates itself to quality service by highlighting its commitment to provide notable client
service. Superior exceptional performance is evident by its compliance with the ISO certification,
its technological tool GAMx for global audit methodology and adhering to EYs global policies
and practices. Its communication of quality objectives from the partner to the staff has been an
effective medium to uphold its value of quality through orientations, trainings, updates and the
like.

BA 105 WFW | An Operations Review and Assessment of SGV&Co.

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah
Although the quality management that the company employs has already pushed the firm to the
top, we still recommend the following for the firm to continuously improve its TQM:
Incentive System - The company can utilize an incentive system to compensate for the number
of clients that an employee handles. This responds to the tradeoff between the quality of the
service of the employee and the number of clients he/she handles. Without reducing the number
of clients, the company can still ensure that quality is not compromised since the employees are
incentivised to ensure that they uphold the highest quality in performing the engagements.
Recognition for exemplary efforts can be given as well as opportunities for growth.
Communication - With young professional associates employed in the business, they are still
prone to mistakes with little or no knowledge of the flow and complexity of the audit procedures.
Guidance, experience and skills are needed as much as the communication and interaction with
the supervisors. This must be maintained and managed well especially with supervisors
handling a large group of associates and accounts to maintain quality. Also, opinions from both
parties must be shared in a frequent basis.

2) Your gap model is quite interesting. Further discussion on how do the gaps affect SGV's
efforts to achieve total quality would be very much helpful. If you can elaborate on each gap,
that would be very good.