Audit Methodology Update—May 2024
May-2024

Target audience: All direct engagement auditors.

Effective date: The revised methodology is effective for direct engagements beginning on or after 1 June 2024.

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, templates and INTRAnet pages. Significant changes to the audit methodology are summarized below.

Key changes are:

  • Three new manual sections 1) OAG Audit 6010 Evidence-Gathering Methods, 2) OAG Audit 6020 Assessing the Reliability of Data and 3) OAG Audit 6040 Selection of Items for Review replace manual section OAG Audit 4045 Evidence-Gathering Methods. Key enhancements are:

    • Enhanced guidance on determining the extent of the required reliability assessment of information.

    • New policy and guidance on assessing the reliability of data used as input to audit procedures or to support audit findings and conclusion.

    • Enhanced and clarified guidance on the selection of items to be reviewed.

  • Updated templates for performance audit reports and functional risk identification

Updates to the Manual

Changes have been made to Direct engagement manual sections. The following is a summary of revisions other than editorial or minor.

Section Section Title Nature of Changes

4045

REMOVED— Evidence‑Gathering Methods

Replaced by new manual sections 6010, 6020 and 6040.

NEW— 6010

Evidence‑Gathering Methods

New policy on assessing the reliability of data used as input to perform audit procedures or to support audit findings and conclusions.

Added relevant definitions for more clarity.

Enhanced guidance on determining the extent of the reliability assessment.

Added guidance on factors the engagement team should consider in determining the level of effort required for assessing the reliability of information obtained in a direct engagement.

NEW— 6020

Assessing the Reliability of Data

New policy on assessing the reliability of data used as input to perform audit procedures or to support audit findings and conclusions.

Added relevant definitions for more clarity.

New guidance on the following topics:

  • Procedures engagement teams may use to assess the reliability of data
  • Understanding data relevance and reliability
  • Data reliability versus data integrity
  • Factors affecting data reliability and the extent of the required assessment

NEW— 6040

Selection of Items for Review

Enhanced guidance on the selection of items to be reviewed.

Added new sample size tables for control testing and accept‑reject testing.

Updates to templates and guidance

Revisions have been made to some templates and guidance. The following is a summary of all revisions.

Templates

Planning

Functional Risk Identification

Aligned sections with current internal specialists.

Examination

Test reliability of data template (coming soon)

New testing template to support engagement team in testing reliability of data.

Examination

Performance Audit Report

Minor editorial changes.
Phase Template Name Change

Guidance

Examination

Evidence‑Gathering Techniques

Update to align with the new section 6010 Evidence‑Gathering Methods.
Phase Guidance Name Change

Updates to INTRAnet

Direct engagement INTRAnet pages reflect the changes included in this methodology update.