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3061 Engagement Team: Assigning and Managing Tasks
Dec-2023

Overview

This section discusses the importance of being satisfied that the engagement team has the appropriate competence and capabilities, including sufficient time to conduct the engagement, as well as the assignment of roles and responsibilities.

CPA Canada Copyright

CPA Canada Assurance Standards

Office

Annual Audit

Performance Audit, Special Examination, and Other Assurance Engagements

CSQM 1.32 The firm shall establish the following quality objectives that address appropriately obtaining, developing, using, maintaining, allocating and assigning resources in a timely manner to enable the design, implementation and operation of the system of quality management: (Ref: Para. A86-A87)

Human Resources

(d) Engagement team members are assigned to each engagement, including an engagement partner, who have appropriate competence and capabilities, including being given sufficient time, to consistently perform quality engagements. (Ref: Para. A88-A89, A95-A97)

CSQM 1.A88 Competence is the ability of the individual to perform a role and goes beyond knowledge of principles, standards, concepts, facts, and procedures; it is the integration and application of technical competence, professional skills, and professional ethics, values and attitudes. Competence can be developed through a variety of methods, including professional education, continuing professional development, training, work experience or coaching of less experienced engagement team members by more experienced engagement team members.

CSQM 1.A89 Law, regulation or professional standards may establish requirements addressing competence and capabilities, such as requirements for the professional licensing of engagement partners, including requirements regarding their professional education and continuing professional development.

CSQM 1.A95 Engagement team members may be assigned to engagements by:

The firm, including assigning personnel from a service delivery center in the firm.
The firm's network or another network firm when the firm uses individuals from the firm's network or another network firm to perform procedures on the engagement (e.g., a component auditor or a service delivery center of the network or another network firm).
A service provider when the firm uses individuals from a service provider to perform procedures on the engagement (e.g., a component auditor from a firm that is not within the firm's network).

CSQM 1.A96 CAS 220 addresses the responsibility of the engagement partner to determine that members of the engagement team, and any auditor's external experts and internal auditors who provide direct assistance who are not part of the engagement team, collectively have the appropriate competence and capabilities, including sufficient time, to perform the engagement. CAS 600 expands on how CAS 220 is to be applied in relation to an audit of group financial statements. The responses designed and implemented by the firm to address the competence and capabilities of engagement team members assigned to the engagement may include policies or procedures that address:

Information that may be obtained by the engagement partner and factors to consider in determining that the engagement team members assigned to the engagement, including those assigned by the firm's network, another network firm or service provider, have the competence and capabilities to perform the engagement.
How concerns about the competence and capabilities of engagement team members, in particular those assigned by the firm's network, another network firm or service provider, may be resolved.

CAS 220.25 The engagement partner shall determine that sufficient and appropriate resources to perform the engagement are assigned or made available to the engagement team in a timely manner, taking into account the nature and circumstances of the audit engagement, the firm's policies or procedures, and any changes that may arise during the engagement. (Ref: Para. A60-A71, A74-A75, A79)

CAS 220.26 The engagement partner shall determine that members of the engagement team, and any auditor's external experts and internal auditors who provide direct assistance who are not part of the engagement team, collectively have the appropriate competence and capabilities, including sufficient time, to perform the audit engagement. (Ref: Para. A63, A72-A75)

CAS 220.27 If, as a result of complying with the requirements in paragraphs 25 and 26, the engagement partner determines that resources assigned or made available are insufficient or inappropriate in the circumstances of the audit engagement, the engagement partner shall take appropriate action, including communicating with appropriate individuals about the need to assign or make available additional or alternative resources to the engagement. (Ref: Para. A76-A78)

CAS 220.28 The engagement partner shall take responsibility for using the resources assigned or made available to the engagement team appropriately, given the nature and circumstances of the audit engagement. (Ref: Para. A64-A70)

Competence and Capabilities of the Engagement Team (Ref: Para. 26)

CAS 220.A72 When determining that the engagement team has the appropriate competence and capabilities, the engagement partner may take into consideration such matters as the team's:

Understanding of, and practical experience with, audit engagements of a similar nature and complexity through appropriate training and participation.
Understanding of professional standards and applicable legal and regulatory requirements.
Expertise in specialized areas of accounting or auditing.
Expertise in IT used by the entity or automated tools or techniques that are to be used by the engagement team in planning and performing the audit engagement.
Knowledge of relevant industries in which the entity being audited operates.
Ability to exercise professional skepticism and professional judgment.
Understanding of the firm's policies or procedures.

CSAE 3001.36 The engagement partner shall: (Ref: Para. A68)

(a) Determine that sufficient and appropriate resources to perform the engagement are assigned or made available to the engagement team in a timely manner, taking into account the nature and circumstances of the engagement, the firm's policies or procedures, and any changes that may arise during the engagement.

(b) Be satisfied that those persons who are to perform the engagement collectively have the appropriate competence and capabilities, including having sufficient time to:

(i) Perform the engagement in accordance with relevant standards and applicable legal and regulatory requirements; and

(ii) Enable an assurance report that is appropriate in the circumstances to be issued.

(i) A practitioner's expert where the work of that expert is to be used; and (Ref: Para. A69-A70)

(ii) Another practitioner, not part of the engagement team, where the assurance work of that practitioner is to be used, (Ref: Para. A71-A72)

to an extent that is sufficient to accept responsibility for the assurance conclusion on the underlying subject matter.

CSAE 3001.59 If information to be used as evidence has been prepared using the work of a responsible party’s expert, the practitioner shall, to the extent necessary having regard to the importance of that expert’s work for the practitioner’s purposes:

(a) Evaluate the competence, capabilities and objectivity of that expert;

(b) Obtain an understanding of the work of that expert; and

OAG Policy

The engagement leader shall

assess and be satisfied that sufficient and appropriate resources to perform the engagement are assigned or made available to the engagement team in a timely manner, taking into account any changes that may arise during the engagement;
assess and be satisfied that members of the engagement team, and any auditor’s external experts and internal auditors who provide direct assistance who are not part of the engagement team, collectively have the appropriate competence and capabilities, including sufficient time, to perform the audit engagement; and
be satisfied with the assigned roles and responsibilities. [Dec-2022]

If the engagement leader determines that resources assigned or made available are insufficient or inappropriate in the circumstances of the audit engagement, the engagement leader shall take appropriate action, including communicating with appropriate individuals about the need to assign or make available additional or alternative resources to the engagement. [Dec-2022]

OAG Guidance

The engagement leader is responsible for the overall quality of the engagement and, is accountable for compliance with Office policies, professional standards and for the appropriateness of the assurance report that is issued. The engagement leader is responsible to determine that sufficient and appropriate resources to perform the engagement are assigned or made available to the engagement team in a timely manner, taking into account the nature and circumstances of the assurance engagement. The engagement leader is also responsible to determine that members of the engagement team, and any auditor’s external experts and internal auditors who provide direct assistance who are not part of the engagement team, collectively have the appropriate competence and capabilities, including sufficient time, to perform the audit engagement.

This means the engagement leader

models, through their personal conduct and actions, behaviors that emphasize a commitment to audit quality;
properly assesses the assignment and structure of the engagement team, and any auditor's external experts and internal auditors who provide direct assistance who are not part of the engagement team;
is satisfied that the planned resources have been allocated to the team and there is sufficient time to perform the work expected of them;
is satisfied that engagement team roles and responsibilities are properly assigned and communicated, including responsibilities for maintaining an objective state of mind and an appropriate level of professional skepticism, and for performing work in accordance with relevant ethical requirements;
in assigning roles and responsibilities, matches the level of knowledge and experience to the risk and complexity of the tasks;
encourages a culture of knowledge sharing and communication, so that engagement team members draw on the totality of their understanding of the entity and their personal knowledge and experience;
clearly defines the tasks to be performed, including the review responsibilities and reporting lines to the engagement leader; and
is proactively involved, together with the team manager, in assessing team capabilities and performance throughout the audit, and takes appropriate action where they become aware that additional resources or expertise is needed.

The composition of the engagement team and the proper assignment of roles and responsibilities are essential to the performance of an effective audit. Every audit is different, and the engagement team is structured to meet those specific circumstances.

The engagement leader is satisfied that assigned roles and responsibilities, supported by an integrated coaching culture, provide for the development of each team member. The development of team members is achieved by

providing team members with a range of challenging opportunities to build their knowledge, relationships, and experience;
engaging team members in setting expectations and measurable goals aligned to the audit, Office, and personal success;
leading by example and sharing knowledge and experience; and
providing for high-quality on-the-job coaching.

This means that auditors

develop their technical competence, team-working skills, knowledge-sharing abilities, and professionalism;
perform high-quality engagements; and
manage risk appropriately.

If the engagement leader determines that resources assigned or made available are insufficient or inappropriate in the circumstances of the engagement and additional or alternative resources have not been made available, appropriate actions may include:

communicating with appropriate individuals about the need to assign or make available additional or alternative resources to the engagement,
changing the planned approach to the nature, timing and extent of direction, supervision and review;
discussing an extension to reporting deadlines with management or those charged with governance, when an extension is possible under applicable law or regulation; or
following the Office's policies or procedures for withdrawing from the assurance engagement, when withdrawal is possible under applicable law or regulation.

Audit Guidance

Our System of Quality Management

3061 Engagement Team: Assigning and Managing Tasks Dec-2023