Audit Methodology Update—Summer 2021
Aug-2021
Target audience: All Direct Engagement Auditors.
Effective date: The revised methodology is effective upon release. For audits that are currently underway, auditors should apply the revised methodology and tools moving forward.
Standards: This update reflects up to CPA Canada—Assurance—Update Number 34—April 2021.
Copyright: CPA Canada Handbook sections and excerpts are reproduced herein for your non-commercial use with the permission of The Chartered Professional Accountants of Canada (“CPA Canada”). These may not be modified, copied or distributed in any form as this would infringe CPA Canada’s copyright.
Description of subject: The update includes changes to audit Manual policies and guidance, TeamMate procedures, templates and Intranet pages. Significant changes to the methodology are summarized below.
Key changes are:
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Simplified and clarified substantiation requirements.
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Updated guidance on strategic planning and selection of performance audit topics.
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Updated Functional Risk Identification Template (FRIT) and Audit Report Submission (ARS) templates to incorporate references to Gender‑Based Analysis Plus (GBA+).
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Removed the requirements to prepare the visual “one-pager” from several Manual sections and TeamMate procedures.
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Indicated the Report Mapping Session for performance audits as optional.
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Removed outdated guidance documents and updated related manual sections.
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Updated several Manual sections with guidance and clarifications brought by the guideline AUG‑50—Conducting a performance audit in the public sector in accordance with CSAE 3001.
Updates to the Manual
A number of revisions have been made to the System of Quality Control Manual sections, the Office-wide sections and the Direct Engagement Manual sections. Revisions to the System of Quality Control Manual sections are included in the Annual Audit Manual and the Direct Engagement Manual. The following is a summary of revisions other than editorial or minor revisions.
| Section | Section Title | Nature of Changes |
|---|---|---|
|
System of Quality Control and Office-wide Sections |
||
|
1031 |
Ethical Requirements Relating to an Assurance Engagement |
Modified OAG policy and assurance standards for conforming amendments to Canadian Standards. |
|
1091 |
Complaints and Allegations |
Modified OAG policy for conforming amendments to Canadian Standards. |
|
3011 |
Acceptance and Continuance |
Additional assurance standards and guidance related to terms of engagement for direct engagements as a result of AUG‑50. |
|
3062 |
Engagement Leader Responsibilities for Audit Quality |
Modified OAG policy and assurance standards for conforming amendments to Canadian Standards. |
|
Glossary |
Glossary |
Updated definitions for conforming amendments to Canadian Standards. Added and updated definitions for new guidance related to AUG‑50. |
|
Direct Engagement Sections |
||
|
101 |
Overview of Performance Audits |
Updated content to include revised OAG Vision and Mission statement; AUG-50 definitions and guidance. Revised content related to audit selection process, substantiation, and access to information in alignment with changes to those areas in related Manual sections. |
|
1505 |
Acquiring and Maintaining Knowledge of Business for Performance Audits |
Updated content to include AUG-50 guidance on knowledge of business work and information available on the Internet that can support it. |
|
1510 |
Selection of Performance Audit Topics |
Incorporated guidance on strategic planning for performance audit. Updated guidance on performance audit selection to reflect revised criteria and process. |
| 2030 | Communication with the Audit Entity: Initial and Ongoing | Added guidance on dispute resolution regarding Cabinet confidences. |
| 2040 | Discussions with the Auditor General | Removed references to visual one-pagers. Indicated that the Report Mapping Sessions are now an optional procedure. |
|
2060 |
Accessing/Requesting Audit Documentation |
Changed policy to identify respective territorial acts governing access entitlement. Incorporated guidance on accessing entity information. |
|
4090 |
Audit Plan Summary for Performance Audits |
Revised content to indicate that the Audit Plan Summary is no longer a controlled document. |
|
7030 |
Drafting the Audit Report |
Revised guidance on report mapping session to indicate that this step is optional. |
|
7060 |
Substantiation |
Changed policy requirement for teams to identify statements that need to be substantiated. |
|
8060 |
Third-Party References |
Incorporated content on third party references |
|
8090 |
Preparation for Tabling of Direct Engagement Reports |
Removed reference to visual one‑pager. Updated procedure for courtesy invitation of entity to preview report virtually or in‑person. |
|
9020 |
Management of Controlled Documents |
Updated content to indicate that the Audit Plan Summary is no longer a controlled document. |
Updates to TeamMate Audit Procedures
Revisions have been made to the TeamMate TeamStores for Performance Audit and Special Examinations. The audit procedures were updated to reflect the changes made to the Direct Engagement Methodology. In addition, several audit procedures related to the planning phase have been updated to incorporate the changes agreed following the “Simplification” project. There were no key structural changes made to either the performance audit or the special examination TeamMate procedures.
Audit teams with audit work currently under way should continue using their current TeamMate file. Update the file to incorporate changes that are effective immediately, for the procedures not yet started, using the tables of changes below.
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Import relevant audit procedures, as needed using “Get Programs,” and replace sub-folders and/or audit procedures where work has not yet started.
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Do not make changes to audit procedures that are completed.
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If needed, include the changes to TeamMate from this update under the “Documentation of Significant Judgments” subfolder and link to it as necessary.
Audit teams that have not yet created their TeamMate file should use the new TeamStore for Performance Audits or Special Examinations that incorporates the changes.
The following is a summary of the revisions to the TeamMate procedures, other than editorial or minor revisions. Ensure you have the updated procedure step for those steps not yet started.
Performance Audit TeamStore
| Program (PRG) | Procedure Step | Change |
|---|---|---|
|
A.1.PRG—Project Management |
CPA Canada Licence Agreement (Aug-2021) |
Changed copyright date from 2020 to 2021. |
|
A.1.PRG—Project Management |
Budget (Aug-2021) |
Added requirement for teams to complete a Product Completion Form providing reasons for late or over-budget audits. |
|
A.2.PRG—Team Members and Experts |
Ethical and Independence Requirements (Aug‑2021) |
Added clarification for procedures when there is an exception to independence. Exceptions are discussed with and reviewed by the Engagement Leader and Internal Specialist–Values and Ethics. The DX is not involved. Clarified definition of location relevant to the audit. |
|
A.4.PRG—Information Management |
IF APPLICABLE— Management of Cabinet and TB Documents (Aug-2021) |
Changed procedure as per memo from Legal Services for requesting Cabinet and Treasury Board documents from remote work locations. |
|
A.6.PRG—Early Planning Phase Meeting |
Early AG Engagement Meeting (Aug‑2021) |
Removed procedure to develop a visual “one‑pager” since this is no longer used. |
|
B.1.PRG—Significant Judgments |
Documentation of Significant Judgments |
Added procedure for documenting significant judgments related to changes made to the audit programs from C.4.PRG–Audit Programs. Added optional procedure for documenting the approach used for evaluating the sufficiency and appropriateness of evidence. |
|
C.1.PRG—Understanding the Subject Matter |
INSTRUCTIONS—Knowledge of the Subject Matter (Aug‑2021) |
Updated list of documents identified from AUG‑50 guidance. |
|
C.1.PRG—Understanding the Subject Matter |
Required Considerations to Understand the Subject Matter (Aug‑2021) |
Added option for the three specific inquiries required by standards to be asked by email as well through interviews. |
|
C.2.PRG—Audit Scope and Approach |
Planning Phase AG Briefing (Aug‑2021) |
Removed procedure to develop a visual “one‑pager” since this is no longer used. |
|
C.3.PRG—Audit Plan Summary |
Prepare Audit Plan Summary (Aug‑2021) |
Removed CODI procedures as the Audit Plan Summary is now a non‑controlled document. |
|
C.3.PRG—Audit Plan Summary |
Response to APS from Entity (Aug‑2021) |
Added clarification that a response from the entity is not required for the audit to continue. |
|
C.4.PRG—Audit Programs |
Audit Programs (Aug-2021) |
Removed procedure on documenting significant judgments related to changes to the audit programs and moved it to B.1.PRG–Significant Judgments. |
|
D.1.PRG—Examination Work and Preliminary Findings |
Presenting Preliminary Findings to the Entity (Aug‑2021) |
Updated text for virtual meeting formats. |
|
D.2.PRG—Internal Draft and Consultation |
IF APPLICABLE—Report Mapping Session (Aug‑2021) |
Updated to indicate that step is optional. Removed procedure to develop a visual “one-pager” since this is no longer used. |
|
D.2.PRG—Internal Draft and Consultation |
Findings Discussion with the AG (Aug‑2021) |
Removed procedure to develop a visual “one-pager” since this is no longer used. |
|
E.1.PRG—PX Draft |
Prepare PX Draft (Aug‑2021) |
Removed procedure to develop a visual “one-pager” since this is no longer used. Removed repetition of procedures related to substantiation and directed the auditor to the E.2.PRG– Audit Report Substantiation. |
|
E.2.PRG—Audit Report Substantiation |
Substantiation (Aug‑2021) |
Updated and simplified substantiation instructions to clarify Office requirements. Introduced flexibility on format used to document substantiation. Retrieved references to evaluation of evidence that is to be performed throughout the engagement. |
|
E.4.PRG—Transmission Draft |
Transmission Draft Discussion with the AG (Aug‑2021) |
Removed procedure to develop a visual “one‑pager” since this is no longer used. |
|
E.4.PRG—Transmission Draft |
Revised Transmission Draft as a Result of Comments Received (Aug‑2021) |
Added text to highlight that changes at the Transmission Draft step should be on exceptional basis. |
|
E.6.PRG—Preparation for Report Tabling |
Preparation for Tabling (Aug‑2021) |
Removed procedure to develop a visual “one‑pager” since this is no longer used. Updated procedure for courtesy invitation of entity to preview report virtually or in-person. |
Special Examination TeamStore
| Program (PRG) | Procedure Step | Change |
|---|---|---|
|
A.1.PRG—Project Management |
CPA Canada Licence Agreement (Aug‑2021) |
Changed copyright date from 2020 to 2021. |
|
A.1.PRG—Project Management |
Budget (Aug-2021) |
Added requirement for teams to complete a Product Completion Form providing reasons for late or over‑budget audits. |
|
A.1.PRG—Project Management |
Key Steps & Dates (Aug-2021) |
Removed reference to the report mapping session. |
|
A.2.PRG—Team Members and Experts |
Ethical and Independence Requirements (Aug-2021) |
Added clarification for procedures when there is an exception to independence. Exceptions are discussed with and reviewed by the Engagement Leader and Internal Specialist–Values and Ethics. The DX is not involved. |
|
A.4.PRG—Information Management |
IF APPLICABLE—Management of Cabinet and TB Documents (Aug‑2021) |
Changed procedure as per memo from Legal Services for requesting Cabinet and Treasury Board documents from remote work locations. |
|
B.1.PRG—Significant Judgments |
Documentation of Significant Judgments (Aug‑2021) |
Added procedure for documenting significant judgments related to changes made to the audit programs from C.4.PRG–Audit Programs. Added optional procedure for documenting the approach used for evaluating the appropriateness and completeness of evidence. |
|
C.1.PRG—Understanding the Subject Matter |
Required Considerations to Understand the Subject Matter (Aug‑2021) |
Added the option for the three specific inquiries required by standards to be asked by email as well as through interviews. |
|
C.3.PRG—Special Examination Plan Summary |
Special Examination Plan to Management (Aug‑2021) |
Removed CODI procedures as the SE Plan is now a non‑controlled document. |
|
C.3.PRG—Special Examination Plan |
Final SE Plan (Aug‑2021) |
Removed CODI procedures as the SE Plan is now a non‑controlled document. |
|
C.4.PRG – Audit Programs |
Audit Programs (Aug-2021) |
Removed procedure on documenting significant judgments related to changes to the audit programs and moved it to B.1.PRG–Significant Judgments. |
|
D.1.PRG—Examination Work and Preliminary Findings |
Presenting Preliminary Findings to the Entity (Aug‑2021) |
Updated text for virtual meeting formats. |
| D.2.PRG—Internal Draft and Consultation | Review of the Finding Blocks with Editorial Services (Aug‑2021) | Replaced the report mapping session procedures with mandatory meeting with Editorial Services for reviewing the draft findings blocks before they are sent to the AG. |
|
E.1.PRG—PX Draft |
Prepare PX Draft (Aug‑2021) |
Removed repetition of procedures related to substantiation and directed the auditor to use the E.2.PRG–Audit Report Substantiation. |
|
E.2.PRG—Audit Report Substantiation |
INSTRUCTIONS—Substantiation (Aug‑2021) |
Updated and simplified substantiation instructions to clarify Office requirements. Introduced flexibility on format used to document substantiation. Retrieved references to evaluation of evidence that is to be performed throughout the engagement. |
|
E.4.PRG—Transmission Draft |
Revised Transmission Draft as a Result of Comments Received (Aug‑2021) |
Added text to highlight that changes at the Transmission Draft step should be on exceptional basis. |
Updates to Guidance and Templates
Revisions have been made to some templates and guidance. With the exception of those documents identified as being specific to performance audits or special examinations, all templates and guidance documents listed below apply to both practices. The following is a summary of all revisions other than editorial or minor revisions.
System of Quality Control Templates
No changes made to SoQC templates
Direct Engagement Guidance
| Phase | Guidance Name | Change |
|---|---|---|
|
Engagement Management |
Auditor General’s Involvement and Advisory Committee Meetings |
Removed requirement to have a visual “one‑pager” as documentation at meetings. |
|
Engagement Management |
DELETED—Guidance for the Access to Entity Information |
Integrated content into the Manual sections 2030‑Communication with the Audit Entity: Initial and Ongoing, and 2060‑Accessing/Requesting Audit Documentation. |
|
Planning |
DELETED—Guide on Risk‑based Planning and Scoping for Direct Engagements—Under revision |
Outdated content remains under revision. The document will be available in the methodology archive content. |
| Reporting |
DELETED—Guidelines on Third Party References |
Integrated content into the Manual section 8060–Third-Party References. |
| Reporting |
DELETED—Substantiation in TeamMate—Technical Guidance |
Outdated content given the changes to substantiation guidance. |
Direct Engagement Templates
| Phase | Template Name | Change |
|---|---|---|
|
Engagement Management |
Audit Report Submission |
Added reference to Gender-Based Analysis Plus (GBA+). Revised to reflect the updated guidance on the audit selection process, in Manual section 1510 Selection of Performance Audit Topics. |
|
Engagement Management |
Key dates for special examination reports |
Retrieved the report mapping session from the key steps because it is no longer used by audit team. Added a meeting with Editorial Services to review and edit the draft finding blocks before sending them to the Auditor General. |
|
Engagement Management |
What to Expect—A Crown Corporation’s Guide to a Special Examination (Presentation) (Special Examinations) |
Updated with the official OAG PowerPoint presentation template and updated to communicate consistent and coherent messages to the entity. |
|
Planning |
Functional Risk Identification (FRIT) | Added new questions on Gender-Based Analysis Plus (GBA+) to be considered as part of the Environment and Sustainable Development section. |
|
Planning |
Special Examination Audit Approach |
Updated core systems and practices, criteria and sources of criteria to be used in Special Examinations. |
|
Planning |
Special Examination Plan |
Updated the official OAG template to modernize the presentation and to communicate consistent and coherent messages to the entity. |
|
Planning |
CODI Email |
Added sentence on the use of Adobe Reader to open the documents. |
|
Planning |
CODI Email for the OAG’s External Parties |
Added sentence on the use of Adobe Reader to open the documents. |
|
Reporting |
DELETED—Substantiation |
Retrieved following the changes to the Manual section 7060 Substantiation. |
|
Post‑audit |
NEW—Product Completion Form |
Added form from Financial Management Group for teams to complete if, after tabling, the audits are late or over-budget. |
Updates to INTRAnet
Direct Engagement INTRAnet pages reflect the changes included in this Methodology Update.