Where the Signing Officer is not also the Engagement Leader in practice, the Signing Officer may have a reduced involvement in the audit due to the role of the Engagement Leader. In these circumstances, the Signing Officer may be able to rely on the Engagement Leader to perform certain key duties and responsibilities that may have been assigned to the role in accordance with the requirements of ASA 220 and Audit Office policies or procedures.

ASA 220 explicitly identifies requirements or responsibilities that need to be fulfilled by the Engagement Partner personally, and clarifies that the Engagement Partner may need to obtain information from the firm (Audit Office) or from other members of the engagement team, to fulfil the requirement (that is, to personally make the required decision or judgement).

To enable the Signing Officer to comply with the requirements of ASA 220, Audit Offices may consider specifying in their policies or procedures:

the requirements under ASA 220 that expressly needs to be fulfilled by the Signing Officer in their personal capacity;

the information to be provided to the Signing Officer to enable them to make the required decisions or judgements expressly required to be fulfilled under ASA 220 in their personal capacity. This will include information compiled by the Engagement Leader and relevant information from the Audit Office’s system of quality management;

the additional procedures to be undertaken by the Signing Officer to obtain the necessary assurances that the Engagement Leader has completed their assigned duties and responsibilities in accordance with applicable Auditing Standards, Audit Office policies or procedures and applicable legal and regulatory requirements, and can be relied upon by the Signing Officer; and

the minimum additional procedures to be undertaken by the Signing Officer, to enable the Signing Officer to take overall responsibility for:

the audit engagement and its performance (including overall responsibility for managing and achieving quality on the audit engagement); and

the auditor’s report being appropriate in the circumstances, and to sign and issue the auditor’s report.

In circumstances where the Signing Officer for the engagement is not also the Engagement Leader in practice, Audit Offices may consider clarifying in their policies that, in applying ASA 220, the Signing Officer continues to be responsible overall for managing and achieving quality on the audit engagement by:

taking responsibility for creating an environment for the engagement that demonstrates the Audit Office’s commitment to quality and expected behaviour of engagement team members;

being sufficiently and appropriately involved throughout the engagement in accordance with the requirements of ASA 220 (see paragraphs 157-159 below); and

taking responsibility for the direction and supervision of the engagement team and the review of their work in accordance with the requirements of ASA 220 (see paragraphs 160-167 below).

Being sufficiently and appropriately involved throughout the audit engagement may be demonstrated by the Signing Officer in different ways, including, for example:

being briefed by the Engagement Leader at appropriate times during the audit engagement;

meetings or calls with the Engagement Leader to discuss identified and assessed risks, issues, findings and conclusions; and

reviewing key audit documentation at appropriate points in time during the audit engagement.

ASA 220 requires that, prior to dating the auditor’s report, the Engagement Partner perform a ‘stand-back’ to determine whether their involvement has been sufficient and appropriate throughout the audit engagement to provide the basis for determining that the significant judgements made, and the conclusions reached, are appropriate.

The Audit Office’s policies or procedures may specify the nature, timing and extent of the Signing Officer’s involvement and any reliance that may be placed by the Signing Officer on the Engagement Leader’s involvement throughout the engagement. In addition to adhering to Audit Office policies or procedures, the Signing Officer applies professional judgement to tailor the nature, timing and extent of their involvement, taking into consideration the facts and circumstances of the engagement, and considering, for example, the factors listed in paragraphs A91-A97 of ASA 220.

Under ASQM 1, Audit Offices are required to establish policies or procedures that address the nature, timing and extent of the direction and supervision of engagement teams and the review of their work. Where direction, supervision and review have been assigned to an Engagement Leader in practice, Audit Offices may consider clarifying in their policies or procedures:

the respective roles and responsibilities of the Signing Officer and Engagement Leader for direction, supervision and review; and

the information to be provided by the Engagement Leader to the Signing Officer to enable the Signing Officer, as required under ASA 220, to determine that the nature, timing and extent of direction, supervision and review is:

planned and performed in accordance with the Audit Office’s policies or procedures, applicable Auditing Standards and applicable legal and regulatory requirements; and

responsive to the nature and circumstances of the audit engagement and the resources assigned or made available to the engagement team.

The approach to direction, supervision and review will vary from one engagement to the next, taking into account the nature and circumstances of the engagement. The Signing Officer exercises professional judgement in tailoring their approach for each engagement, taking into consideration the factors listed in paragraphs A94-A97 of ASA 220.

In applying ASA 220, the Signing Officer is required to review key audit documentation at appropriate points in time throughout the audit engagement. ASA 220 does not require the Engagement Partner to review all audit documentation but to exercise professional judgment in considering, for example, significant matters and areas of significant judgements made by the engagement team. Such matters are generally considered by the Engagement Leader in consultation with the Signing Officer as appropriate. Audit Office policies or procedures may also specify certain matters that are commonly expected to involve significant judgements. Depending on the nature and circumstances of the engagement, the Signing Officer may be able to rely on the Engagement Leader’s review of ‘standard’ significant judgements and risks identified by the engagement team, and the Signing Officer will likely focus on the critical or ‘non-standard’ matters, especially those relating to potential qualifications, difficult or contentious issues, significant risks and other areas the Engagement Leader has identified as important.

In applying ASA 220, the Signing Officer is required to determine, on or before the date of the auditor’s report, through review of audit documentation and discussion with the engagement team, that sufficient appropriate audit evidence has been obtained to support the conclusions reached and for the auditor’s report to be issued. Information that may be relevant to the Signing Officer’s evaluation will depend on the facts and circumstances of the audit engagement, and may include written confirmations and sign-offs prepared by the Engagement Leader.

For example, the Signing Officer may be able to place reliance on the overall summary memorandum prepared by the Engagement Leader (see paragraph 151 above) as a basis for determining whether:

the Engagement Leader has completed their work consistent with applicable Auditing Standards and Audit Office policies or procedures;

the Engagement Leader and other senior members of the engagement team have been suitably involved in the planning and performance of the audit;

EQR processes have been satisfactorily completed (where required);

consultation and conclusions on difficult or contentious matters were appropriate and in accordance with Audit Office policies or procedures;

any differences of opinion have been addressed and resolved in accordance with Audit Office policies or procedures;

relevant ethical requirements, including those related to independence, have been fulfilled;

reasonable assurance has been obtained whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and that the auditor’s report to be issued will be appropriate in the circumstances.

Where the Signing Officer places reliance on the overall summary memorandum prepared by the Engagement Leader (see paragraph 151 of this GS), this does not negate the requirement of paragraph 40 of ASA 220 for the Signing Officer to be sufficiently and appropriately involved throughout the audit (see paragraphs 149 and 157-159 of this GS).

In applying ASA 220, the Signing Officer is also required, prior to dating the auditor’s report, to review:

the financial report; and

the recommended draft auditor’s report, including, if applicable, the description of the key audit matters and related audit documentation.

The Signing Officer may seek to review other information, and/or request the Engagement Leader to perform additional audit procedures, if the Signing Officer considers it appropriate in the circumstances, to enable them to assume overall responsibility for the audit engagement and the appropriateness of the auditor’s report.

ASA 220 provides guidance regarding documentation of the performance of the requirements of the Standard, including examples of different ways the Signing Officer’s involvement throughout the engagement may be evidenced.