Role and Responsibilities of the Engagement Leader where the Engagement Leader is not the Signing Officer
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Where the Engagement Leader assigned responsibility for the audit engagement and its performance in practice is not the Signing Officer for the engagement, Audit Offices may consider clarifying in their policies or procedures:
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that the Engagement Leader performs any assigned ASA 220 Engagement Partner duties and responsibilities for and on behalf of the Signing Officer;
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that the Signing Officer remains ultimately responsible, and therefore accountable, for compliance with the requirements of ASA 220; and
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the required actions to be taken by the Engagement Leader to assist the Signing Officer in complying with their ASA 220 responsibilities, in particular those responsibilities that the Standard explicitly requires the Engagement Partner fulfil in their personal capacity (see paragraph 154 of this GS).
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For example, to assist the Signing Officer make the determination as required in paragraph 40 of ASA 220 (that is, the ‘stand-back’ provision – see paragraph 158 of this GS), it may be expected that the Engagement Leader will take steps to assist the Signing Officer in being sufficiently and appropriately involved throughout the audit engagement such that the Signing Officer has the required basis for determining that significant judgements made and the conclusions reached are appropriate, given the nature and circumstances of the engagement. Audit Office policies or procedures may require the Engagement Leader to consider:
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Inviting the Signing Officer to key planning and closing meetings and other relevant team events (for example, meetings to discuss significant issues pertaining to the audit or the public sector entity).
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Involving the Signing Officer in agreeing the treatment of significant, complex, or contentious accounting issues, or matters involving significant judgements.
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Inviting the Signing Officer to key meetings with management and those charged with governance of the public sector entity.
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Communicating how the Engagement Leader has satisfied themselves that the requirements of ASA 220 have been met.
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As noted in paragraph 145 of this GS, a Signing Officer may need to obtain information from the engagement team or from the Audit Office’s system of quality management to make a required decision or judgement under ASA 220. Audit Office policies or procedures may address the matters required to be communicated to the Signing Officer by the Engagement Leader, including the timing and form of such communication. Communication may be in the form of briefings, internal memorandums, written confirmations and signoffs prepared by the Engagement Leader to demonstrate that they have complied with applicable Auditing Standards and Audit Office policies or procedures; that their involvement in the engagement has been sufficient and appropriate throughout; and that the work performed by less experienced members of the engagement team has been directed, supervised and reviewed in accordance with the requirements of ASA 220 and Audit Office policies or procedures. The form and content of such communication will be influenced by the nature and extent of the audit work assigned to the Engagement Leader.
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Audit Office policies or procedures may include a requirement for the Engagement Leader to communicate matters relevant to the Signing Officer’s conclusions about the audit, for example, to provide certain internal assurances and information to assist the Signing Officer in undertaking their final review and to provide clearance for the recommended auditor’s report to be signed and issued. This may be in the form of an overall summary memorandum describing the work performed and the results thereof, which may include information and assurances such as:
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Confirmation that the audit has been completed and that the audit file has been reviewed and all issues resolved.
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Confirmation that relevant ethical requirements, including those related to independence, have been fulfilled.
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How matters affecting the overall audit strategy and audit plan have been addressed.
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Significant matters arising on the audit and, in particular, consultation and conclusions on matters that were difficult or contentious.
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How any differences of opinion have been addressed and resolved.
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Results of the procedures performed by the engagement team on significant areas of the engagement, including where significant judgements were involved.
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Notification that the EQR (where appropriate) has been completed.
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Key financial results/analytics.
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The significance and disposition of corrected and uncorrected misstatements identified during the engagement.
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Evidence that the financial report has been reviewed by the Engagement Leader (attach financial report for Signing Officer to review).
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Confirmation that the financial report complies in all material respects with accounting and financial reporting standards.
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Evidence that the Management Representation Letter has been reviewed by the Engagement Leader.
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Confirmation that sufficient appropriate audit evidence has been obtained to support the conclusions reached and for the auditor’s report to be issued.
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Recommended draft auditor’s report and Auditor’s Independence Declaration (where applicable) (attach for Signing Officer to review).
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Significant matters communicated or expected to be communicated to management and those charged with governance or regulatory authorities.
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Information about instances of non-compliance with laws or regulations.
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Issues with sector wide implications, or other sensitive issues which may be of interest to the Parliament, Executive Government or the community.
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In implementing Audit Office policies or procedures applicable to the audit engagement, the Engagement Leader exercises professional judgement and is influenced by the nature and circumstances of the engagement and any changes during the engagement, to determine whether to design and implement responses beyond those set forth in policies or procedures, to meet the objectives of ASA 220.