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How to Use the Direct Engagement Manual
This Direct Engagement Manual applies to all performance audits and special examinations unless otherwise identified in the practice-specific boxes that appear in each section.
The objective of this Direct Engagement Manual is to provide auditors at all levels with information on the conceptual foundation of audits, as well as an overview of how audits should be selected, planned, conducted, and reported.
The manual contains
- applicable Chartered Professional Accountants of Canada (CPA Canada) assurance standards;
- policies at the Office of the Auditor General (OAG); and
- guidance on how to apply the standards and policies.
CPA Canada assurance standards. Compliance with these standards is required. The standards are included to help auditors understand why certain processes must be followed.
OAG policies. Compliance with OAG policies is required. OAG policies are intended to help auditors comply with applicable direct engagement standards and to communicate legal and other requirements.
Guidance. The guidance in the manual explains how standards and policies apply to the Direct Engagement practice. The guidance sets out the steps and procedures to facilitate compliance with the standards and policies. The manual should be used in conjunction with TeamMate, the OAG’s electronic tool for documenting audit work.
TeamMate. TeamMate contains detailed procedures and templates for each step of an audit. Links are provided from TeamMate to the manual (referred to as “OAG Audit” and a section number) wherever appropriate. Since documentation is a key part of complying with the CPA Canada standards, procedures in TeamMate must be followed, unless otherwise indicated.
The Direct Engagement Manual incorporates the OAG’s system of quality control, which is designed to be compliant with the Canadian Standard on Quality Control 1 (CSQC1) and with CSAE 3001.
Each manual section contains subsections that discuss a specific audit requirement, process, or step.
Section 100 provides an overview of Direct Engagement at the OAG.
Section 1000 covers key audit principles, such as ethical requirements, professional judgment, skills and techniques, audit evidence, job rotation, audit documentation, and review of audit work.
Section 1500 covers audit selection and explains the process for maintaining knowledge of the business, selecting performance audit topics, and carrying out a special examination.
Section 2000 addresses overall engagement management considerations, including managing an audit as a project, the importance of selecting significant areas to audit, communication with the entity, access to information, and the consultations that need to occur during the course of an audit.
Section 3000 sets out the initial engagement considerations and explains the terms under which the OAG undertakes an audit, preconditions for a direct engagement, auditor independence, and the roles of the engagement leader, team members, internal specialists, and the quality reviewer.
Section 4000 covers the planning process for Direct Engagement, including the development of the audit strategy and the audit programs, evidence-gathering methods, and risk, and internal controls assessment.
Section 7000 covers the examination phase of direct engagements, including the initial drafting of the audit report, and its substantiation.
Section 8000 describes the reporting phase for direct engagements up to the tabling date for performance audits or up to the transmission of the report to the board of directors for special examinations.
Section 9000 covers post-audit activities, including the finalization of the audit file, post-audit surveys and post-tabling activities for performance audits.
Section 10000 includes requirements related to risk considerations and responses to risk, as well as unmodified and modified conclusions specific to limited assurance engagements.
The CPA Canada standards use wording that applies to the private sector context, such as “firm” (interpreted as the OAG), “engagement partner” (interpreted as the engagement leader), “responsible party” (interpreted as the audited entity), and “practitioner” (interpreted as an audit team member), and “practitioner’s report” (interpreted as the audit report). A glossary is provided at the beginning of the manual.