Document ID: chunk:federal_register_of_legislation:F2020C00630:reg:25:p20
Version: federal_register_of_legislation:F2020C00630
Segment Type: reg
Provision Reference: reg 25 (pt 20/31)
Character Range: 65110–68537

operations into an area where the firm does not possess the necessary expertise.

Withdrawal (Ref: Para. 28)

A22.         Policies and procedures on withdrawal from an engagement or from both the engagement and the client relationship address issues that include the following:

           * Discussing with the appropriate level of the client's management and those charged with its governance the appropriate action that the firm might take based on the relevant facts and circumstances.

           * If the firm determines that it is appropriate to withdraw, discussing with the appropriate level of the client's management and those charged with its governance withdrawal from the engagement or from both the engagement and the client relationship, and the reasons for the withdrawal.

           * Considering whether there is a professional, legal or regulatory requirement for the firm to remain in place, or for the firm to report the withdrawal from the engagement, or from both the engagement and the client relationship, together with the reasons for the withdrawal, to regulatory authorities.

                            +                 Aus A22.1 For example, the firm may be required to obtain consent from the Australian Securities and Investments Commission (ASIC) prior to resigning from certain audits.[*]

           * Documenting significant matters, consultations, conclusions and the basis for the conclusions.

Considerations Specific to Public Sector Audit Organisations (Ref: Para. 26‑28)

A23.         In the public sector, auditors may be appointed in accordance with statutory procedures.  Accordingly, certain of the requirements and considerations regarding the acceptance and continuance of client relationships and specific engagements as set out paragraphs 26‑28 and A18‑A22 may not be relevant.  Nonetheless, establishing policies and procedures as described may provide valuable information to public sector auditors in performing risk assessments and in carrying out reporting responsibilities.

Human Resources (Ref: Para. 29)

A24.         Personnel issues relevant to the firm's policies and procedures related to human resources include, for example:

           * Recruitment.

           * Performance evaluation.

           * Capabilities, including time to perform assignments.

           * Competence.

           * Career development.

           * Promotion.

           * Compensation.

           * The estimation of personnel needs.

    Effective recruitment processes and procedures help the firm select individuals of integrity who have the capacity to develop the competence and capabilities necessary to perform the firm's work and possess the appropriate characteristics to enable them to perform competently.

A25.         Competence can be developed through a variety of methods, including the following:

           * Professional education.

           * Continuing professional development, including training.

           * Work experience.

           * Coaching by more experienced staff, for example, other members of the engagement team.

           * Independence education for personnel who are required to be independent.

A26.         The continuing competence of the firm's personnel depends to a significant extent on an appropriate level of continuing professional development so that personnel maintain their knowledge and capabilities.  Effective