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8017 Report Content Approval and Date of the Report
Before the transmission draft is sent to the audited entity, the audit team must obtain approval from the internal specialist(s), the quality reviewer (if any), and the engagement leader, on the content of the report. The audit team should also date the audit report.
CSAE 3001 Requirements
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; (Ref: Para. A73)
(e) Appropriate consultation being undertaken by the engagement team on difficult or contentious matters.
38. Throughout the engagement, the engagement partner shall remain alert, through observation and making inquiries as necessary, for evidence of non-compliance with relevant ethical requirements by members of the engagement team. If matters come to the engagement partner’s attention through the firm’s system of quality control or otherwise that indicate that members of the engagement team have not complied with relevant ethical requirements, the engagement partner, in consultation with others in the firm, shall determine the appropriate action.
40. For those engagements, if any, for which a quality control review is required by law or regulation or for which the firm has determined that an engagement quality control review is required:
(a) The engagement partner shall take responsibility for discussing significant matters arising during the engagement with the engagement quality control reviewer, and not date the assurance report until completion of that review; and
(b) The engagement quality control reviewer shall perform an objective evaluation of the significant judgments made by the engagement team, and the conclusions reached in formulating the assurance report. This evaluation shall involve: (Ref: Para. A74)
(i) Discussion of significant matters with the engagement partner;
(ii) Review of the proposed assurance report;
(iii) Review of selected engagement documentation relating to the significant judgments the engagement team made and the conclusions it reached; and
(iv) Evaluation of the conclusions reached in formulating the assurance report and consideration of whether the proposed assurance report is appropriate.
64. The date of the written representations shall be as near as practicable to, but not after, the date of the assurance report.
73. The assurance report shall include at a minimum the following basic elements:
(n) The date of the assurance report. The assurance report shall be dated no earlier than the date on which the practitioner has obtained the evidence on which the practitioner’s conclusion is based including receipt of the written representations under paragraphs 61 and 62. (Ref: Para. A183)
CSAE 3001 Application Material
A74. Other matters that may be considered in an engagement quality control review include:
(b) Whether appropriate consultation has taken place on matters involving differences of opinion or other difficult or contentious matters, and the conclusions arising from those consultations; and
(c) Whether engagement documentation selected for review reflects the work performed in relation to the significant judgments and supports the conclusions reached.
A82. The exercise of professional judgment in any particular case is based on the facts and circumstances that are known by the practitioner. Consultation on difficult or contentious matters during the course of the engagement, both within the engagement team and between the engagement team and others at the appropriate level within or outside the firm assist the practitioner in making informed and reasonable judgments.
A183. Including the assurance report date informs the intended users that the practitioner has considered the effect on the assurance report of events that occurred up to that date.
The date of the report corresponds to the date by which
- the audit team has obtained sufficient appropriate evidence on which the conclusion of the report is based, and audit documentation had been reviewed by the engagement leader;
- the quality reviewer has completed the engagement quality control review;
- any differences of opinion within the audit team, with those consulted, or between the engagement leader and the engagement quality control reviewer have been addressed; and
- the audit team has obtained written confirmation that the audited entity has provided all information of which it is aware that has been requested or that could significantly affect the findings or the conclusion of the audit report. [Nov-2016]
The quality reviewer shall document that the engagement quality control review has been completed on or before the date of the assurance engagement report, and that he/she is not aware of any unresolved matters that would cause him/her to believe that the significant judgments the engagement team made and the conclusions it reached were not appropriate. [Nov-2011]
The engagement leader shall ensure that the nature and scope of, and conclusions resulting from, consultations are documented and agreed to by both the individual seeking consultation and the party consulted, on or before the date of the assurance report. [Nov-2011]
The engagement leader shall obtain approval on the content of the audit report before submitting the transmission draft to the audited entity(ies). [Nov-2015]
What the CSAE 3001 means for report content approval and date of the report
CSAE 3001 requires that the engagement leader
be satisfied (through documentation review) that sufficient appropriate evidence has been obtained to support the conclusion(s) reached;
be satisfied that members of the team have undertaken appropriate consultation (including internal specialists) during the course of the audit and that conclusions reached from such consultations are documented and agreed with the party consulted;
discuss with the quality reviewer significant matters arising during the audit, including those identified by the reviewer;
does not date the report until the completion of the engagement quality control review, including resolution, to the satisfaction of the quality reviewer, of matters raised by him/her; and
obtain written confirmations from entity management.
The approval of the content of the audit report is the process that allows for such requirements to be validated and confirmed before dating the report and submitting the transmission draft to the audited entity. The report content approval process serves to confirm that the audit work is complete.
Date of the report
The date of the assurance report for purposes of CSAE 3001 and the “tabling date” are not the same. It is important that the audit team distinguishes between the two dates in:
Considering whether procedures are required with respect to events occurring after the date of the report in accordance with paragraph 66 of CSAE 3001; and
Determining the appropriate response to facts that become known after the date of the assurance report in accordance with paragraph A142 of CSAE 3001
The date of the report is a key concept around which multiple audit events are linked. The report can NOT be dated before the following events have occurred:
Sufficient and appropriate audit evidence has been obtained (OAG Audit 1051 Sufficient appropriate audit evidence; OAG Audit 7021 Evaluate the sufficiency and appropriateness of audit evidence) to support the audit conclusion(s) (OAG Audit 7040 Audit conclusion).
The engagement leader completed his/her review of audit documentation such as critical areas of judgment, significant matters, high-risk areas of the audit report, etc. (OAG Audit 1162 Engagement leader review: minimum documentation requirements).
The engagement quality control review has been completed by the quality reviewer (OAG Audit 1163 Quality reviewer: minimum documentation requirements).
Appropriate consultations, occurred during the course of the audit, and agreement have been obtained on resulting conclusions that are documented (OAG Audit 3081 Consultations).
Differences of opinion that arose during the course of the audit have been resolved and the resulting conclusions documented (OAG Audit 3082 Resolution of differences of opinion).
The audit team has obtained written confirmation that the audited entity has provided all information of which it is aware that has been requested or that could significantly affect the findings or the conclusion of the audit report (OAG Audit 8019 Submitting the principal’s (PX) draft and transmission draft).
Impacts of subsequent events on the content of the audit report have been considered from the end of the period covered by the audit until the date of the report (OAG Audit 8030 Subsequent events).
The date of the report cannot be determined before the date by which all of the events listed above have occurred. In addition to those elements based in CSAE 3001 requirements, the OAG also expects that the report substantiation will be completed before the date of the report (OAG Audit 7060 Substantiation). Failure to obtain the written confirmation from the audited entity that it has provided all information requested or that could significantly affect the findings or the conclusion of the audit report should not, however, delay the report date. If this written confirmation cannot be obtained, the audit team should disclose this fact in the report. The engagement leader must consider the effect, if any, on the audit work and report and document his or her assessment (OAG Audit 8019 Submitting the principal’s (PX) draft and transmission draft). The date of the report is indicated in the About the Audit section of the report.
For the purpose of performance audit, the “date of the report” is determined by the team and is usually just before the transmission draft is sent to the entity.
For the purpose of a special examination, the “date of the report” is the date on which the special examination report is submitted to the Crown corporation’s audit committee.
The audit team can prepare the transmission draft for its issuance to the audited entity. The team will also need to go through the last level of approval before tabling the performance audit report or submitting the special examination report to the board of directors.