Document ID: chunk:federal_register_of_legislation:F2023C01119:body:0:p37
Version: federal_register_of_legislation:F2023C01119
Segment Type: other
Provision Reference: 
Character Range: 105666–108799

direction and may need to be supplemented by in-person interactions.

           * The structure of the engagement team and the location of engagement team members. For example, direction and supervision of individuals located at service delivery centres and the review of their work may:

                   + Be more formalised and structured than when members of the engagement team are all situated in the same location; or

                   + Use IT to facilitate the communication between the members of the engagement team.

A96.         Identification of changes in the engagement circumstances may warrant reevaluation of the planned approach to the nature, timing or extent of direction, supervision or review. For example, if the assessed risk of material misstatement at the financial report level increases because of a complex transaction, the engagement partner may need to change the planned level of review of the work related to the transaction.

A97.         In accordance with paragraph 30(b), the engagement partner is required to determine that the approach to direction, supervision and review is responsive to the nature and circumstances of the audit engagement. For example, if a more experienced engagement team member becomes unavailable to participate in the supervision and review of the engagement team, the engagement partner may need to increase the extent of supervision and review of the less experienced engagement team members.

Review of Communications to Management, Those Charged with Governance, or Regulatory Authorities (Ref: Para. 34)

A98.         The engagement partner uses professional judgement in determining which written communications to review, taking into account the nature and circumstances of the audit engagement. For example, it may not be necessary for the engagement partner to review communications between the engagement team and management in the ordinary course of the audit.

Consultation (Ref: Para. 35)

A99.         ASQM 1 requires the firm to establish a quality objective that addresses consultation on difficult or contentious matters and how the conclusions agreed are implemented. Consultation may be appropriate or required, for example for:

           * Issues that are complex or unfamiliar (e.g., issues related to an accounting estimate with a high degree of estimation uncertainty);

           * Significant risks;

           * Significant transactions that are outside the normal course of business for the entity, or that otherwise appear to be unusual;

           * Limitations imposed by management; and

           * Non-compliance with laws or regulations.

A100.      Effective consultation on significant technical, ethical and other matters within the firm or, where applicable, outside the firm may be achieved when those consulted:

           * Are given all the relevant facts that will enable them to provide informed advice; and

           * Have appropriate knowledge, seniority and experience.

A101.      It may be appropriate for the engagement team, in the context of the firm's policies or procedures, to consult outside the