Document ID: chunk:federal_register_of_legislation:F2023C01119:body:0:p40
Version: federal_register_of_legislation:F2023C01119
Segment Type: other
Provision Reference: 
Character Range: 114152–117322

further action may be needed.

A112.      An identified deficiency in the firm's system of quality management does not necessarily indicate that an audit engagement was not performed in accordance with Australian Auditing Standards and applicable legal and regulatory requirements, or that the auditor's report was not appropriate in the circumstances.

Taking Overall Responsibility for Managing and Achieving Quality (Ref: Para. 40)

A113.      ASQM 1 requires the firm to establish a quality objective addressing the engagement team's understanding and fulfillment of their responsibilities in connection with the engagement. ASQM 1 further requires that the quality objective include the overall responsibility of engagement partners for managing and achieving quality on the engagement and being sufficiently and appropriately involved throughout the engagement.

A114.      Relevant considerations in addressing paragraph 40 include determining how the engagement partner has complied with the requirements of this ASA, given the nature and circumstances of the audit engagement and how the audit documentation evidences the engagement partner's involvement throughout the audit engagement, as described in paragraph A118.

A115.      Indicators that the engagement partner may not have been sufficiently and appropriately involved include, for example:

           * Lack of timely review by the engagement partner of the audit engagement planning, including reviewing the assessment of risks of material misstatement and the design of those responses to those risks.

           * Evidence that those to whom tasks, actions or procedures have been assigned were not adequately informed about the nature of their responsibilities and authority, the scope of the work being assigned and the objectives thereof; and were not provided other necessary instructions and relevant information.

           * A lack of evidence of the engagement partner's direction and supervision of the other members of the engagement team and the review of their work.

A116.      If the engagement partner's involvement does not provide the basis for determining that the significant judgements made and the conclusions reached are appropriate, the engagement partner will not be able to reach the determination required by paragraph 40. In addition to taking account of firm policies or procedures that may set forth the required actions to be taken in such circumstances, appropriate actions that the engagement partner may take, include, for example:

           * Updating and changing the audit plan;

           * Re-evaluating the planned approach to the nature and extent of review and modifying the planned approach to increase the involvement of the engagement partner; or

           * Consulting with personnel assigned operational responsibility for the relevant aspect of the firm's system of quality management.

Documentation (Ref: Para. 41)

A117.      In accordance with ASA 230,[46] audit documentation provides evidence that the audit complies with the ASAs. However, it is neither necessary nor practicable for the auditor to document every matter considered, or