importance to audit quality of, for identified inconsistencies in audit example, the engagement team’s ability evidence, or doubts over the reliability of to raise concerns without fear of audit evidence. Further ISA 230 Para. 11 reprisals and in issuing auditor’s reports indicates that, for significant audit matters, that are appropriate in the when the auditor identifies information circumstances.[ISA 220, Para. A3] that is inconsistent with the auditor’s final Engagement team members feel conclusion, the auditor shall document comfortable to raise issues with the how the inconsistency was addressed. sufficiency of the audit procedures and ISA 540 could address the requirements whether sufficient appropriate audit in ISA 540 Paragraphs 18-21 by evidence has been obtained. The QMA emphasizing a back” about matters “stand approach within the ITC would allow such as: audit evidence obtained, team members to challenge whether inconsistencies identified, and how they sufficient appropriate evidence has have been resolved, indicators of been obtained. management bias, etc. How do we encourage it?: How do we encourage it?: How do we encourage it?: ISA 540 could reinforce that Through ISQC 1. Through ISQC 1. evaluating the sufficiency of audit evidence for disclosures in the financial statements involves the application of the same types of considerations as when evaluating the sufficiency of audit evidence for accounting estimates recognized in the financial statements How do auditors evidence it? How do auditors evidence it? Through documentation and sign-offs Through the audit documentation How do auditors evidence it? of the audit file by engagement where the auditor demonstrates that it Through the audit documentation team members. has obtained sufficient appropriate where the auditor demonstrates that it audit evidence in order to conclude has obtained sufficient appropriate that reasonable assurance has been audit evidence in order to conclude obtained. [ISA 700, Para. 11] that reasonable assurance has been obtained. [ISA 700, Para. 11] Quality Control at Firm and Engagement
importance to audit quality of, for example, the engagement team’s ability to raise concerns without fear of reprisals and in issuing auditor’s reports that are appropriate in the circumstances.[ISA 220, Para. A3] Engagement team members feel comfortable to raise issues with the sufficiency of the audit procedures and whether sufficient appropriate audit evidence has been obtained. The QMA approach within the ITC would allow team members to challenge whether sufficient appropriate evidence has been obtained. How do we encourage it?: Through ISQC 1. How do auditors evidence it? Through the audit documentation where the auditor demonstrates that it has obtained sufficient appropriate audit evidence in order to conclude that reasonable assurance has been obtained. [ISA 700, Para. 11] How do we encourage it?: Through ISQC 1. How do auditors evidence it? Through the audit documentation where the auditor demonstrates that it has obtained sufficient appropriate audit evidence in order to conclude that reasonable assurance has been obtained. [ISA 700, Para. 11] identified inconsistencies in audit evidence, or doubts over the reliability of audit evidence. Further ISA 230 Para. 11 indicates that, for significant audit matters, when the auditor identifies information that is inconsistent with the auditor’s final conclusion, the auditor shall document how the inconsistency was addressed. ISA 540 could address the requirements in ISA 540 Paragraphs 18-21 by emphasizing a “stand back” about matters such as: audit evidence obtained, inconsistencies identified, and how they have been resolved, indicators of management bias, etc. How do we encourage it?: ISA 540 could reinforce that evaluating the sufficiency of audit evidence for disclosures in the financial statements involves the application of the same types of considerations as when evaluating the sufficiency of audit evidence for accounting estimates recognized in the financial statements How do auditors evidence it? Through documentation and sign-offs of the audit file by engagement team members. Quality Control at Firm and Engagement
20160621-IAASB-Agenda_Item_2-B-Professional_Skepticism_Matrix_0.docx