3064 Team manager

Dec-2023

OAG Guidance

The team manager is a director or experienced audit professional on the engagement team who, with the appropriate oversight and coaching by the engagement leader, assists in the direction and supervision of the engagement team and the review of their work, including design of the audit strategy and plan, and coordinates its implementation on a day-to-day basis.

The team manager:

• consults with the engagement leader to determine the resources needed to perform the engagement;

• helps to direct and supervise the engagement team;

• takes the main day-to-day responsibility for the nature and extent of direction and supervision of the engagement team and review of their work;

• is responsible for bringing to the attention of the engagement leader areas of significant judgment issues and significant matters that require the engagement leader’s involvement throughout the audit engagement; and

• takes the main responsibility for interaction with the management of the entity, subject to the direction and supervision of the engagement leader, including consulting the engagement leader regarding significant matters and substantive communications with those charged with governance.

The team manager role is a defined team role covering direction and supervision of the engagement team and review of their work including the sufficiency and appropriateness of the documentation of the work performed.

OAG Guidance

A director or experienced audit professional with appropriate competence and capabilities, may fill the team manager role. The role may be filled by one person or be shared by two or more, depending on the size and complexity of the engagement. For example, on larger engagements, more than one person on the engagement team may perform the role of team manager (e.g., a director and an experienced audit professional). In such cases, either both report directly to the engagement leader or the less experienced director or experienced audit professional may report to the more experienced one and only the latter reports directly to the engagement leader. In other cases, a director and an experienced audit professional may fulfill elements of the team manager role; either both report directly to the engagement leader or the experienced audit professional may report to the director. Whatever the circumstances, the roles and responsibilities of those in team manager roles, the reporting lines and the responsibilities for direction and supervision of the engagement team and review of their work, including the directors and experienced audit professionals, need to be clearly planned and communicated to all engagement team members.

OAG Guidance

On smaller entities, the team manager and team member roles may be filled by one person who reports directly to the engagement leader. On smaller entities the engagement leader may act alone.

OAG Guidance

The team manager, supporting the engagement leader in his/her responsibility, under CAS 220, for audit quality (see OAG Audit 3062):

• sets an example in the performance of the audit and its documentation by being proactively and sufficiently involved throughout the audit, including identifying the risks and being satisfied that they are responded to appropriately;

• strives for continuous quality improvement, challenges engagement team members, and applies rigor to the audit process;

• together with the engagement leader, puts in place arrangements for timely reviews of audit work and documentation. On or before the date of the auditor's report, the engagement leader determines that sufficient appropriate audit evidence has been obtained;

• together with the engagement leader, highlights the importance of professional ethics, values and attitudes to the members of the engagement team;

• together with the engagement leader, highlights the importance of each team member exercising professional skepticism throughout the audit engagement;

• discusses with team members any significant matters arising and assists the engagement leader in his/her resolution, including checking whether appropriate consultations have taken place, where needed. Discusses with team members and the engagement leader the significant judgments made, and the conclusions reached, and determines that they are appropriate given the nature and circumstances of the engagement;

• is responsible for cooperating with the engagement quality reviewer, where assigned and provides assistance in the timely conduct of the engagement quality reviewer’s work notwithstanding the engagement leader’s responsibility to engage directly with the engagement quality reviewer at the appropriate times throughout the audit engagement; and

• documents the extent and timing of their own involvement in the audit.

OAG Guidance

The team manager, in consultation with the engagement leader:

• completes the acceptance and continuance assessment and prepares any analysis relevant to the decision, including details of threats to independence and the related safeguards in place, so that the engagement leader can determine whether to accept or continue the client relationship and audit engagement;

• prepares/updates the engagement letter and is proactive in achieving timely signature of the engagement letter by the engagement leader and entity management and any other relevant parties;

• takes into account information obtained during the acceptance and continuance process in planning and performing the audit engagement; and

• if the team manager becomes aware of information that would have caused the OAG to decline the audit engagement had that information been available earlier, the team manager discusses the matter with the engagement leader so that the engagement leader can determine the necessary action.

OAG Guidance

The engagement team, and any auditor’s external experts and internal auditors who provide direct assistance (who are, by definition, not part of the engagement team), are collectively required by CAS 220 to have the appropriate competence and capabilities, including sufficient time, to:

1. Perform the audit engagement in accordance with professional standards and applicable legal and regulatory requirements, and
2. Enable an auditor’s report that is appropriate in the circumstances to be issued.

In consultation with the engagement leader, who is responsible for the competence and capabilities of the engagement team (see OAG Audit 3062), the team manager:

• identifies the appropriate resource needs of the engagement taking into account the nature and circumstances of the engagement, and subsequent changes that may be required based on changes in engagement circumstances;

• assesses the need for IT audit, data analytics and other specialists and auditor’s experts, and allocates such resources to the team, where necessary;

• assigns the right people to the right tasks at the right time, and clearly designates roles and responsibilities, taking account of the engagement team members' knowledge of relevant industry in which the entity operates, and their ability to exercise professional skepticism and professional judgment;

• clearly defines, communicates, and documents the tasks to be performed, including the reporting lines for reviewing and reporting to the engagement leader and document the plan for and execution of appropriate direction and supervision of the engagement team and review of their work; and

• through their day-to-day contact with engagement team members, assesses engagement team’s collective capabilities and performance throughout the audit and discusses with the engagement leader where additional resources or expertise is needed or adjustments are needed to the audit plan.

OAG Guidance

Supporting the engagement leader, who is responsible for evaluating compliance with ethical requirements, including independence (see OAG Audit 3062), the team manager:

• assists, at the time of acceptance/continuance and before the commencement of significant audit work, in assessing threats to compliance with relevant ethical requirements and the related safeguards in place, and evaluating compliance with the OAG Code of Values, Ethics, and Professional Conduct;

• draws the attention of engagement team members to relevant ethical requirements that may be of particular relevance to the audit engagement;

• alerts the engagement leader to matters relevant to the engagement team's understanding and fulfillment of relevant ethical requirements, including those related to independence, and the firm's related policies or procedures, and whether those matters may indicate a breach of or threat to compliance with relevant ethical requirements;

• remains alert throughout the audit to assist in identifying changes in circumstances that may create threats to compliance with relevant ethical requirements, including independence, and communicates any such matters identified to the engagement leader on a timely basis;

• prepares and, as necessary, updates the summary of independence considerations, and obtains approval by the engagement leader;

• in the case of a group audit, issues instructions regarding independence to other OAG teams and external firms/auditors, as appropriate; and

• if the entity is a component of a group audit, checks if the Acknowledgment of Receipt has been provided by the group engagement team and whether it included information about any breaches or/and threats of independence reported.

Related Guidance

OAG Audit 3031 gives guidance on obtaining information on threats to independence and considering related safeguards.

OAG Guidance

The team manager supports the engagement leader, who is overall responsible for the direction, supervision, and performance of the audit engagement (see OAG Audit 3062), by taking responsibility for:

At mobilization and during the planning stage

• providing direction and supervision to engagement team members by setting up team meetings and discussions, including team planning and taking stock meetings and, together with the engagement leader, sharing with engagement team members their knowledge and understanding of the entity and its environment, which might impact their work or conclusions;

• setting the tone and modeling the behaviors of the OAG Code of Conduct reinforcing the Office's quality messages through personal conduct and actions;

• together with the engagement leader, briefing engagement team members on the audit objectives and their responsibilities (including the responsibility for maintaining an objective state of mind and an appropriate level of professional skepticism, and performing work delegated to them in accordance with the ethical principle of due care), risk-related issues, problems that may arise, the detailed approach to the audit, and encouraging them to raise questions with more experienced team members;

• together with the engagement leader, assessing the engagement team's ongoing compliance with relevant ethical requirements, including those related to independence;

• assigning responsibilities to engagement team members, taking into consideration development needs by engaging team members in setting expectations and measurable goals aligned to client, Office, and personal success;

• encouraging effective direction, supervision and coaching of less experienced members of the engagement team, and engaging directly with all engagement team members;

• sharing with the engagement team the benefit of their experience and insight;

• together with the engagement leader, in the team planning meeting(s) convey information relating to the planning activities undertaken to the rest of the engagement team for the engagement team's understanding, input, discussion and agreement;

• checking that information is completely and accurately reported, and that the dates represent the best estimates by the engagement leader and team manager; incorrect information will prevent Records from sending reminder emails automatically to achieve archiving of the audit file in accordance with the appropriate legislative requirements, and prevent accurate monitoring of compliance. The engagement leader and team manager check that dates are updated throughout the course of the engagement if their best estimates change due to any circumstances;

• the incorporation and assessment of identified risks of material misstatement, including significant risks, into the audit planning template and, together with the engagement leader, developing the audit strategy and audit plan;

• together with the engagement leader, the preparation and dissemination of group audit instructions in the case of group audits;

• together with the engagement leader, arranging for early involvement of the engagement quality reviewer, proactively arranging meetings between the engagement quality reviewer and engagement leader to discuss significant judgments and significant matters, and checking that the engagement quality reviewer has access to the relevant electronic file and hard copy documentation;

• together with the engagement leader, determining that the resources that have been assigned or made available to the engagement team collectively have the appropriate competence and capabilities, including sufficient time, to perform the audit engagement, and the involvement of specialists and auditor's experts is appropriately planned and their involvement is documented;

• development of the communications plan and obtaining the engagement leader’s approval for such plan, and, together with the engagement leader, preparing audit planning communications to the entity on a timely basis; and

• together with the engagement leader, planning for active and ongoing direction and supervision of the engagement team and review of their work throughout the audit engagement, and for responsive action to be taken where issues are identified. See also OAG Audit 3071 regarding review of audit work and documentation.

During the audit

The team manager, as part of taking the primary day-to-day responsibility for executing the audit strategy and plan and directing and supervising the engagement team and reviewing their work:

• together with the engagement leader, remains alert to actual or suspected threats to or breaches of relevant ethical requirements, including those related to independence;

• monitors progress of the work and considers whether team members have received sufficient briefing on tasks before they perform them, whether they understand their instructions and have sufficient time to carry out their work and are being coached throughout the performance of tasks;

• if resources assigned to the engagement are insufficient or inappropriate given the nature and circumstances of the engagement, notifies the engagement leader so they can take appropriate action;

• considers whether issues arising during the audit may require a modification of the audit strategy or the audit plan, and obtains the engagement leader’s approval for any significant change;

• together with the engagement leader, arranges the involvement of the engagement quality reviewer, proactively arranging meetings between the engagement quality reviewer and engagement leader to discuss changes in significant judgments and significant matters, and checking that the engagement quality reviewer has access to the relevant electronic file and hard copy documentation;

• considers whether there are any significant issues that need to be raised as significant matters, and brings such matters to the attention of the engagement leader on a timely basis;

• assists in the resolution of significant matters, including arranging for appropriate consultations, where needed, and checking that consultations have been documented, and agreed with those persons consulted and conclusions agreed have been implemented;

• organizes taking stock meetings and other team discussions with the engagement leader and other engagement team members (see also OAG Audit 7022 regarding taking stock meetings):

  • to review the progress of the audit engagement.

  • to update the audit plan or re-evaluate the planned approach in relation to the nature, timing and extent of direction, supervision and/or review.

  • to share information that may be relevant to others.

  • to discuss the work performed by an auditor's expert or specialist, the conclusions drawn and how the results of their work impact the rest of the audit work.

  • to discuss whether there are significant changes in the nature, timing and extent of direction, supervision and review to be performed (e.g., to increase involvement of the engagement leader/other more experienced team members).

  • to discuss adequacy of assigned human resources (including experts and specialists).

• together with the engagement leader, resolves differences of opinion that arise within the engagement team, or between the engagement team and the engagement quality reviewer, or with individuals being consulted;

• determines that the engagement team has consulted appropriately on difficult or contentious matters, and the conclusions reached are documented and implemented on or before the date of the audit report;

• reviews the financial statements and drafts the audit report;

• reviews the formal written communications to management, those charged with governance and/or regulatory authorities and coordinates the engagement leader's review of these formal written communications.

• raises audit findings with management throughout the audit engagement;

• understands the client’s expectations and seek to be responsive, as appropriate;

• liaises with specialists or experts;

• provides regular constructive feedback on performance to team members, and works with team members to achieve their development goals; and

• prepares deliverables for the client or, if component auditor, for the group audit team.

At the completion stage

The team manager, supporting the engagement leader in the engagement leader’s responsibilities, under CAS 220, for directing and supervising the audit engagement and reviewing their work:

• has an overall understanding of the engagement (i.e., of risks, approach, work done, issues raised) and, with the benefit of this perspective, considers the quality and sufficiency of the work done, whether the evidence supports findings in other parts of the audit file, corresponds with their understanding of the entity, and whether there are any matters which they are aware that would warrant further consultation have been raised to the appropriate parties, including the engagement leader;

• considers whether all work is appropriately and completely performed and reviewed in accordance with the planned audit plan, and whether the documentation on file reflects the work done and reviewed;

• checks that all required procedures have been addressed to comply with CASs and relevant GAAP, and OAG policies, and the work has been executed, documented and appropriately reviewed, including that performed by specialists and auditors’ internal and external experts;

• is satisfied that all significant changes to the audit strategy and plan have been considered and documented appropriately;

• arranges the final signoff meeting between the engagement quality reviewer and the engagement leader and checks that all relevant information is provided to the engagement quality reviewer on a timely basis throughout the audit process and before the sign off meeting. However, it is the responsibility of the engagement leader to engage directly with the engagement quality reviewer at the appropriate times throughout the audit engagement;

• together with the engagement leader, is satisfied that the work performed, and the evidence obtained, supports the conclusions reached and the audit report to be issued;

• considers whether communications are appropriate and cover at least those items specified in CAS 260 and CAS 265 for communication to those charged with governance (see OAG Audit 2212);

• together with the engagement leader, is satisfied that actual critical dates are completely and accurately reported if they differ from the estimated dates, and is responsible for the final assembly of the audit file and for its archiving; and

The engagement leader and team manager need to be satisfied that the right matters have been considered, and that the audit work has been appropriately designed and performed to address the risks identified, including the risk of fraud, and provides sufficient evidence over the financial statement assertions.

Consultations

The team manager supports the engagement leader in the engagement leader’s responsibility, under CAS 220, for the team undertaking appropriate consultation on difficult or contentious matters and on matters that, in the engagement leader's professional judgment require consultation (see OAG Audit 3062). The team manager discusses with team members any significant matters arising and assists in their resolution, including checking whether appropriate consultations have taken place, where needed. Consulting with the engagement leader and, where applicable, obtaining the objective view of the engagement quality reviewer, the team manager is satisfied that conclusions resulting from consultations are appropriately documented and implemented.

Consultations that involve difficult or contentious matters or matters significant to the audit are documented as significant matters and agreed to by both the individual seeking consultation and the individual consulted. For documentation of significant matters refer to OAG Audit 3081.

Differences of opinion

Where differences of opinion arise within the engagement team, or between the engagement team and the engagement quality reviewer (where assigned), or individuals performing activities within the Office’s system of quality management, such as those who provide consultation, the Office's policies and procedures for dealing with and resolving differences of opinion is followed (see OAG Audit 3082).

Where the unresolved difference relates to a concern that there is failure to comply with appropriate professional, regulatory, and/or legal requirements, or the OAG’s own systems of quality management, and which a team member considers they cannot discuss with the engagement leader, the team member may follow the OAG’s whistle blowing processes. The audit report is not issued until the matter is resolved.

OAG Guidance

The engagement leader has the overall responsibility for managing and achieving quality on the audit engagement and documentation. Supporting the engagement leader in this responsibility, the team manager has the primary day-to-day responsibility for managing and achieving quality on the audit engagement and documentation. Accordingly, the team manager checks and is satisfied that:

• matters identified, relevant discussions with the engagement team, and conclusions reached with respect to fulfillment of responsibilities relating to relevant ethical requirements, including those related to independence and the acceptance and continuance of the client relationship and audit engagement are properly documented in the working papers;

• the work documented in the working papers reflect the work done consistent with the audit strategy and plan, and that all issues identified have been documented and raised to the appropriate level within the team and/or with the engagement leader as necessary;

• the documentary evidence on file stands on its own in support of work done and conclusions reached (i.e., it is evident from the file alone, without additional oral explanation by the team member, what was done, the processes that were followed, and the reasons for the conclusions reached);

• there is a clear audit trail between the identified risks, work done, and financial statements;

• appropriate documentation of engagement team discussions, including those involving the engagement leader, is provided in the engagement documentation to evidence that appropriate direction, supervision and review was planned and performed;

• the work has been performed and documented in accordance with auditing standards and other requirements;

• the nature and scope of, and conclusions resulting from, consultations undertaken during the audit engagement and how such conclusions were implemented are appropriately documented;

• working papers have been reviewed in detail by the appropriate person(s), either the team manager, an experienced team member or, where necessary, the engagement leader, and that there are appropriate electronic sign offs of all documents by each team member who has carried out the work and each team member who has reviewed the work; and

• the engagement quality reviewer has completed their engagement quality review and signed off the engagement quality reviewer completion sign-off procedure on or before the engagement leader signed the audit report.

The team manager may have assigned to themself the responsibility for recording the engagement leader’s and engagement quality reviewer’s (if applicable) involvement in the audit, and their review of selected documentation. In such a case, the team manager checks that the planning and completion sign off documents reflect the engagement leader's involvement to the extent that it is not otherwise clear from the audit documentation, and checks that the engagement leader and engagement quality reviewer are satisfied there is a sufficient record of their involvement. The engagement leader and engagement quality reviewer mark their respective sign off documents as reviewed as evidence that they are satisfied with the nature and extent of documentation as it relates to their involvement.

Related Guidance

OAG Audit 1161 for guidance on planning and reporting sign offs.