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1161 Documenting evidence of the extent of review
Similar to the importance of documenting who performed the audit work and the date the work was completed is the importance of documenting what audit work was reviewed, who reviewed this work, and when it was reviewed. This section outlines this documentation.
Reviewers should also use review notes if they determine follow-up actions or modifications to documentation are necessary.
CPA Canada Assurance Standards
Performance Audit, Special Examination, and Other Assurance Engagements
CAS 230.9 In documenting the nature, timing and extent of audit procedures performed, the auditor shall record:
(a) The identifying characteristics of the specific items or matters tested; (Ref: Para. A12)
(b) Who performed the audit work and the date such work was completed; and
(c) Who reviewed the audit work performed and the date and extent of such review. (Ref: Para. A13)
Identification of Specific Items or Matters Tested, and of the Preparer and Reviewer (Ref: Para. 9)
CAS 230.A13 CAS 220 requires the auditor to review the audit work performed through review of the audit documentation. The requirement to document who reviewed the audit work performed does not imply a need for each specific working paper to include evidence of review. The requirement, however, means documenting what audit work was reviewed, who reviewed such work, and when it was reviewed.
CSAE 3001.37 The engagement partner shall take responsibility for the overall quality on the engagement. This includes responsibility for:
(c) Reviews being performed in accordance with the firm’s review policies and procedures, and reviewing the engagement documentation on or before the date of the assurance report;
CSAE 3001.A73 Under CSQC 1, the firm’s review responsibility policies and procedures are determined on the basis that the work of less experienced team members is reviewed by more experienced team members.
CSAE 3001.A201 Documentation may include a record of, for example:
Review of audit work
Engagement leaders, team managers, audit professionals, signatories, and quality reviewers all have a responsibility for the review of audit working papers. OAG Audit 3071 discusses the nature and extent of this responsibility and provides guidance on performing reviews.
Documenting evidence of review
The audit working paper software contains functionality to automatically record which documents are reviewed, by whom, and the date of these reviews. Teams provide evidence of review of external working papers that are not stored electronically by manually signing and dating the paper documents (OAG Audit 1121).
The extent of review by the engagement leader and quality reviewer is a matter of judgment; however, each should include evidence of their review and involvement in the audit file. OAG Audit 1162 and OAG Audit 1163 provide guidance on minimum documentation requirements of which the engagement leader and quality reviewer, respectively, need to provide evidence of review.
Planning and reporting sign-offs
The team documents the timing and extent of reviews at appropriate stages of the audit, signing and dating planning and reporting/completion procedures. Team members, the engagement leader, signatories, and quality reviewer must address the applicable sections within the planning and reporting sign-off steps identified for their consideration.
Use review notes if follow-up actions or modifications to documentation are necessary
If, upon review of the audit working paper or procedure step, reviewers find follow-up actions or modifications to documentation are necessary, they should document this in a review note, to which the preparer of the working paper must respond.
Auditors should not use review notes to document audit evidence. Audit working papers should stand alone as a record of work done in an audit. Auditors should address and document in the working papers matters that have been raised during file review and coaching.