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1161 Evidencing the extent of review of audit documentation
Dec-2023

Overview

Similar to the importance of documenting who performed the audit work and the date the work was completed is the importance of documenting what audit work was reviewed, who reviewed this work, and when it was reviewed. This section outlines this documentation.

Reviewers should also use review notes if they determine follow-up actions or modifications to documentation are necessary.

CPA Canada Copyright

CPA Canada Assurance Standards

Office

Annual Audit

Performance Audit, Special Examination, and Other Assurance Engagements

CAS 230.9 In documenting the nature, timing and extent of audit procedures performed, the auditor shall record:

(a) The identifying characteristics of the specific items or matters tested; (Ref: Para. A12)

(b) Who performed the audit work and the date such work was completed; and

Identification of Specific Items or Matters Tested, and of the Preparer and Reviewer (Ref: Para. 9)

CAS 230.A13 CAS 220 contains requirements and guidance on the review of audit documentation. The requirement to document who reviewed the audit work performed does not imply a need for each specific working paper to include evidence of review. The requirement, however, means documenting what audit work was reviewed, who reviewed such work, and when it was reviewed.

CAS 220.A90 As required by CAS 230, the engagement partner documents the date and extent of the review.

CAS 220.A91 Timely review of documentation by the engagement partner at appropriate stages throughout the audit engagement enables significant matters to be resolved to the engagement partner's satisfaction on or before the date of the auditor's report. The engagement partner need not review all audit documentation.

Responsibilities of the Engagement Partner

CSAE 3001.37 The engagement partner shall take overall responsibility for managing and achieving quality on the engagement and being sufficiently and appropriately involved throughout the engagement. This includes responsibility for:

[…]

(c) Reviews being performed in accordance with the firm’s policies or procedures, and reviewing the engagement documentation on or before the date of the assurance report;

[…]

Review Responsibilities (Ref: Para. 37 (c))

CSAE 3001.A73 Under CSQM 1, the firm is required to establish a quality objective that addresses the nature, timing and extent of the direction and supervision of engagement team members and review of their work. CSQM 1 also requires that such direction, supervision and review is planned and performed on the basis that the work performed by less experienced engagement team members is directed, supervised and reviewed by more experienced engagement team members.

CSAE 3001.A201 Documentation may include a record of, for example:

The identifying characteristics of the specific items or matters tested;
Who performed the engagement work and the date such work was completed;
Who reviewed the engagement work performed and the date and extent of such review; and
Discussions of significant matters with the appropriate party(ies) and others, including the nature of the significant matters discussed and when and with whom the discussions took place.

OAG Policy

In documenting the nature, timing, and extent of audit procedures performed, auditors shall record who reviewed the audit work performed and the date and extent of this review. [Nov-2011]

OAG Guidance

Review of audit work

Engagement leaders, team managers, team members and quality reviewers all have a responsibility for the review of audit working papers. OAG Audit 3071 discusses the nature and extent of this responsibility and provides guidance on performing reviews.

Documenting evidence of review

The audit working paper software automatically records the name of the person who marked the working paper as reviewed and the date of their review. Teams provide evidence of review of external working papers that are not stored electronically by manually signing and dating the paper documents (OAG Audit 1121).

The extent of review by the engagement leader and quality reviewer is a matter of judgment; however, each should include evidence of their review and involvement in the audit file. OAG Audit 1162 and OAG Audit 1163 provide guidance on minimum documentation requirements of which the engagement leader and quality reviewer, respectively, need to provide evidence of review.

Planning and reporting sign-offs

Documentation of the timing of the review at appropriate stages of the audit is also evidenced by the team manager, engagement leader and engagement quality reviewer signing off the applicable planning and completion sign-off procedures. Sign-off requires the team manager, engagement leader and engagement quality reviewer to address the affirmations within the planning and completion sign-off procedures. Some of the affirmations include explicit references to procedures where the engagement leader's involvement is documented. These referenced procedures include documentation of the engagement leader's involvement in the work because their involvement in specific procedures is required by the standards, and these procedures serve to provide documentation of this involvement. Even though the engagement leader may not be required to review these procedures, it may be prudent to do so to further evidence their involvement in the audit documentation. The engagement leader uses their judgment on whether to mark those procedures, or any other procedures, as reviewed.

Use review notes if follow-up actions or modifications to documentation are necessary

If, upon review of the audit working paper or procedure step, reviewers find follow-up actions or modifications to documentation are necessary, they should document this in a review note, to which the preparer of the working paper must respond.

Auditors should not use review notes to document audit evidence. Audit working papers should stand alone as a record of work done in an audit. Auditors should address and document in the working papers matters that have been raised during file review and coaching.

Audit Guidance

Our System of Quality Management

1161 Evidencing the extent of review of audit documentation Dec-2023