Document ID: chunk:federal_register_of_legislation:F2021C01259:reg:11:p7
Version: federal_register_of_legislation:F2021C01259
Segment Type: reg
Provision Reference: reg 11 (pt 7/16)
Character Range: 26193–29531

Evaluation of the conclusions reached in formulating the auditor's report and consideration of whether the proposed auditor's report is appropriate.  (Ref: Para. A27‑A33)

21.               [Deleted by the AUASB.  Refer Aus 21.1]

Aus 21.1 For audits of financial reports of listed entities, and those other audit engagements, if any, for which the firm has determined that an engagement quality control review is required, the engagement quality control reviewer, on performing an engagement quality control review, shall also consider the following:

(a)                The engagement team's evaluation of the firm's independence in relation to the audit engagement;

(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 audit documentation selected for review reflects the work performed in relation to the significant judgements made and supports the conclusions reached.  (Ref: Para. A30‑A33)

Differences of Opinion

22.               If differences of opinion arise within the engagement team, with those consulted or, where applicable, between the engagement partner and the engagement quality control reviewer, the engagement team shall follow the firm's policies and procedures for dealing with and resolving differences of opinion.

Monitoring

23.               An effective system of quality control includes a monitoring process designed to provide the firm with reasonable assurance that its policies and procedures relating to the system of quality control are relevant, adequate, and operating effectively.  The engagement partner shall consider the results of the firm's monitoring process as evidenced in the latest information circulated by the firm and, if applicable, other network firms and whether deficiencies noted in that information may affect the audit engagement.  (Ref: Para. A33‑A35)

Documentation

24.               The auditor shall include in the audit documentation:[4]

(a)                Issues identified with respect to compliance with relevant ethical requirements and how they were resolved.

(b)                Conclusions on compliance with independence requirements that apply to the audit engagement, and any relevant discussions with the firm that support these conclusions.

(c)                Conclusions reached regarding the acceptance and continuance of client relationships and audit engagements.

(d)                The nature and scope of, and conclusions resulting from, consultations undertaken during the course of the audit engagement.  (Ref: Para. A36)

25.               The engagement quality control reviewer shall document, for the audit engagement reviewed, that:

(a)                The procedures required by the firm's policies on engagement quality control review have been performed;

(b)                The engagement quality control review has been completed on or before the date of the auditor's report; and

(c)                The reviewer is not aware of any unresolved matters that would cause the reviewer to believe that the significant judgements the engagement team made and the conclusions it reached were not appropriate.

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Application and Other Explanatory