7022 Taking stock meetings

Dec-2023

OAG Guidance

Discussions within the engagement team are an important part of maintaining the effectiveness and efficiency of our audits.

Matters may arise throughout an audit engagement which require discussion among members of the team. Information obtained needs to be evaluated and judgments made about, for example, whether we have sufficient and appropriate audit evidence to address the identified risks, how to respond to exceptions, what further procedures to perform and what engagement management actions to take. Even where no significant matters are brought to an engagement leader’s attention, effective direction and supervision of the engagement team provides an opportunity for the engagement leader to check that any matters warranting further attention are identified and addressed. The term “taking stock,” which is not required to be used, indicates that teams meet to take stock of the information gathered and evidence obtained and consider as an engagement team, or as individual members within the team, whether further actions may be appropriate. They could equally be described as progress, status, project or just team meetings

"Taking stock" meetings facilitate the direction and supervision of engagement team members by the engagement leader and more experienced engagement team members and provide some of the evidence of the engagement leader’s fulfillment of the CAS 220.30 requirement. These meetings also provide an opportunity for the engagement leader to evidence to be involved throughout the audit in order to manage and achieve audit quality and have a basis to determine whether significant judgments made, and conclusions reached, are appropriate given the nature and circumstances of the engagement (as required by CAS 220.13). In addition to the engagement‑level quality benefits arising from direction and supervision of engagement team members, taking stock meetings also provide an opportunity for engagement team members to share information that may be relevant to others, as well as for less experienced team members to learn from the engagement leader and other more experienced engagement team members. The taking stock process does not need to be a formal meeting. It could, for example, be an informal discussion between the engagement leader and other engagement team members to determine and agree on how to address a newly identified significant risk.

Documenting details of taking stock meetings, whether in the form of minutes or less formal documentation, provides an effective way to evidence the engagement leader’s direction and supervision of the engagement team throughout the audit.

OAG Guidance

Because an important part of taking stock meetings is to review progress and agree the way forward, experienced members of the team (e.g., the engagement leader and/ or the team manager) attend and use their experience and judgment to facilitate direction and supervision of the engagement team throughout the engagement. The number of meetings held in any audit, who attends, and the topics addressed will vary with the engagement circumstances.

Taking stock meetings can also be used to evaluate whether circumstances exist that require adjustments to certain planning decisions, particularly in respect of direction and supervision of the engagement team and the review of their work. Some common examples of topics addressed at taking stock meetings, include:

• Whether information was obtained during other meetings (including client meetings) that needs to be shared with the rest of the engagement team, including updated knowledge about the entity;
• Communication of relevant matters to engagement team members who did not attend the Team Planning Meeting, including engagement team members assigned after planning;
• Whether there is any need to revise the nature, timing and/or extent of procedures that we had previously planned to perform;
• Whether there are new risks or changes in assessed levels of risk;
• Whether conditions that may create impediments to the exercise of professional skepticism exist. These may include budget constraints, tight deadlines, lack of cooperation or undue pressures from management or difficulties in obtaining access to records, facilities or certain employees;
• 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);
• Consideration by the engagement leader of whether other engagement team members who were assigned procedures, tasks or actions are performing them as expected. For example, are assigned reviewers performing the review of audit work as the engagement leader expects?;
• Evaluation of 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;
• Adequacy of assigned human resources (including experts and specialists) and their allocated time to the engagement given the current engagement status;
• Whether significant matters and significant judgments arising during the audit engagement have been discussed with the engagement quality reviewer, or the plans to do so;
• Whether there are any circumstances that suggest that consultations are either required or otherwise necessary.
• Any differences of opinion within the engagement team, between the engagement team and engagement quality reviewer or the engagement team and the person consulted.
• Anticipated meetings with or formal communications with management, those charged with governance and/or regulatory authorities, where necessary, including plans for the engagement leader’s review of formal written communications before they are issued.

Taking stock meetings can also be used by the engagement leader to remind the engagement team of matters such as:

• Each engagement team member’s responsibility for managing and achieving quality on the audit;
• The importance of complying with relevant ethical requirements, including the OAG Code of Conduct and independence requirements, relevant to the engagement;
• The importance of raising concerns without fear of reprisal.

OAG Guidance

Taking stock is designed primarily to share information and take decisions on next steps, but it can be also an important part of the review process. The extent to which the taking stock process can constitute review of audit documentation and team discussion will depend on who is present, how the meeting is conducted and whether the documentation is reviewed at the same time.

Refer to OAG Audit 1161, OAG Audit 1162 and OAG Audit 1163 for details about review of audit documentation and team discussion and OAG Audit 3062 for details about evidencing engagement leader review.

OAG Guidance

A record of team meetings that have taken place, and knowledge of the matters discussed and judgments made, help to demonstrate that the audit has been properly planned, directed, supervised and work reviewed, as required by CAS 220.30. However, other forms of evidence to demonstrate the fulfillment of this requirement include:

• Significant matters and significant judgments, and the engagement leader’s involvement are evidenced in the audit file (OAG Audit 1141, OAG Audit 1142 and OAG Audit 1143).
• Reviews, in particular by the engagement leader, are evidenced in the audit file in accordance with OAG Audit 3062.
• Our documentation provides evidence of our audit plan, including our responses to assessed risks, and the nature, timing and extent of audit procedures at the assertion level for each material FSLI, and the details of any significant changes made (including as it relates to planned direction and supervision of the engagement team and the review of their work).
• Other documentation policies are applied and guidance followed (OAG Audit 1100).

The following procedures are also expected to be performed as a result of taking stock meetings:

• Make any necessary changes to the audit procedures where additional audit evidence is to be sought, in a timely way (OAG Audit 7010).
• Verify that significant changes to the audit strategy and plan, including to our risk assessment, and our planned direction and supervision of the engagement team and review of their work are properly documented (see OAG Audit 4050).
• Determine that there is adequate evidence on the audit file of any review in the taking stock meeting that has taken place (OAG Audit 1161, OAG Audit 1162 and OAG Audit 1163).
• If significant, update the project plan to reflect further actions and responsibilities when changed.