Canada has an added dimension to this where there is no statutory immunity. If you do not identify an obvious code violation, you are presumed negligent in court. This means despite something being signed off by another inspector, I have to identify it or I could be found negligent.
Issuing a notice for correction on something that was previously approved adds another dimension still, due to procedural fairness, that contractor might be eligible for compensation from the agency that missed the violation in the first place (not a bad thing as pain helps with memory of failure). Basically, the contractor would still have to pay the costs to do it right, but the approving agency would be liable to compensate for any construction/materials destroyed in correcting the issue that would not have been destroyed had the deficiency been detected at the correct time.