Auditing and assurance revision question and answer

Auditing and Assurance Revision Questions and Answers

As a quality control manager of the audit engagement team of D Limited, how can you ensure that your team has performed the audit works as per the standard maintained your audit firm along with the other mandatory compliance of various national and international standards in auditing and accounting? Points out the review procedures to ensure the quality of the audit work?

The quality control manager informs the responsibilities of the engagement team and also give some of the things to be ensured before starting the works as follows;
 understanding the nature of the entity’s business
 Possible risk related issues
 Problems that may arise; and
 The detailed approach to the performance of the engagement.

The engagement team’s responsibilities include maintaining an objective state of mind and an appropriate level of professional skepticism, and performing the work delegated to them in accordance with the ethical principle of due care.
The quality control manager before review the files, will supervise the engagement team and do the following works:
 Tracking the progress of the audit engagement;
 Considering the capabilities and competence of individual members of the engagement team, whether they have sufficient time to carry out their work, whether they understand their instructions, and whether the work is being carried out in accordance with the planned approach to the audit engagement.
 Addressing significant issues arising during the audit engagement, considering their significance and modifying the planned approach appropriately.
 Identifying matters for consultation or consideration more experienced engagement team member during the audit engagement.

The quality control manager will review the work performed their team members and consider the following while reviewing the works and working papers:
 The work has been performed in accordance with professional standards and regulatory and legal requirements;
 Significant matters have been raised for further consideration;
 Appropriate consultations have taken place and the resulting conclusions have been documented and implemented.
 There is a need to revise the nature, timing and extent of work performed;
 The work performed supports the conclusions reached and is appropriately documents;
 The evidence obtained is sufficient and appropriate to support the auditor’s report;
 The objectives of the engagement procedures have been achieved.

The engagement partner conducts timely reviews at appropriate stages during the engagement. This allows significant matters to be resolved on a timely basis to the engagement partner‟s satisfaction before the auditor‟s report is issued. The reviews cover critical areas of judgment, especially those relating to difficult or contentious matters identified during the course of the engagement, significant risks, and other areas the engagement partner considers important. The engagement partner need not review all audit documentation. However, the partner documents the extent and timing of the reviews. Issues arising from the reviews are resolved to the satisfaction of the engagement partner.

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