The system used to audit rest homes has been criticised following a number of high-profile cases of elder abuse.
The Belhaven Rest Home in Auckland is to close on Thursday, after an elderly resident was discovered with her mouth taped shut.
Lobby group Action on Elder Abuse says the current auditing system for rest homes lacks teeth, because auditors do not interview rest home residents or relatives.
An Age Concern spokesperson, Jane McKendry, says the system is flawed as spot checks on rest homes are only performed when a complaint is received.
Ms McKendry says many elderly victims and witnesses of abuse are too scared to complain.
The Ministry of Health says about 30 unannounced inspections were performed on rest homes in 2007 in response to complaints. It says there are a number of things it is doing to improve an already reasonable system.
A woman has appeared in court charged with assaulting a resident at Belhaven Rest Home.
The 60-year-old did not plead and was granted interim name suppression in Auckland District Court. She was granted bail and will reappear on 6 August.
She is accused of common assault on a woman, whose name is also suppressed.
The defendant's lawyer told the court she disputed the allegation that she taped the resident's mouth, and her reputation would be damaged if her name were made public before the facts were established.