Document ID: chunk:federal_register_of_legislation:F2023C01119:body:0:p16
Version: federal_register_of_legislation:F2023C01119
Segment Type: other
Provision Reference: 
Character Range: 45147–48152

involvement of experts to deal with complex matters;

           * The amount of resources to allocate to specific audit areas, such as the number of team members assigned to attend the physical inventory count at multiple locations;

           * The nature, timing and extent of review of the work performed by members of the team based on the assessed risks of material misstatement; or

           * The allocation of the budgeted audit hours, including allocating more time, and the time of more experienced engagement team members to those areas where there are more risks of material misstatement or the identified risks are assessed as higher.

Scalability (Ref: Para. 2, 8)

A13.         In a smaller firm, the firm's policies or procedures may designate an engagement partner, on behalf of the firm, to design many of the responses to the firm's quality risks, as doing so may be a more effective approach to designing and implementing responses as part of the firm's system of quality management. Additionally, a smaller firm's policies or procedures may be less formal. For example, in a very small firm with a relatively small number of audit engagements, the firm may determine that there is no need to establish a firm-wide system to monitor independence, and rather, independence will be monitored at the individual engagement level by the engagement partner.

A14.         The requirements relating to direction, supervision and review of the work of other members of the engagement team are only relevant if there are members of the engagement team other than the engagement partner.

Definitions

Engagement Team (Ref: Para. 12(d))

A15.         The engagement team may be organised in a variety of ways. For example, engagement team members may be located together or across different geographic locations and may be organised in groups by the activity they are performing. Regardless of how the engagement team is organised, any individual who performs audit procedures[17] on the audit engagement is a member of the engagement team.

A16.         The definition of an engagement team focuses on individuals who perform audit procedures on the audit engagement. Audit evidence, which is necessary to support the auditor's opinion and report, is primarily obtained from audit procedures performed during the course of the audit.[18] Audit procedures comprise risk assessment procedures[19] and further audit procedures.[20] As explained in ASA 500, audit procedures include inspection, observation, confirmation, recalculation, reperformance, analytical procedures and enquiry, often performed in some combination.[21] Other ASAs may also include specific procedures to obtain audit evidence, for example, ASA 520.[22]

A17.         Engagement teams include personnel and may also include other individuals who perform audit procedures who are from:

(a)                A network firm; or

(b)                A firm that is not a network firm, or another service provider.[23]

    For