Involvement of Key Engagement Team Member
The engagement partner and other key members of the engagement team shall be involved in planning the audit, including planning and participating in the discussion among engagement team members.
Preliminary Engagement Activities
The auditor shall undertake the following activities at the beginning of the current audit engagement:
- Performing procedures required by ISA 220 regarding the continuance of the client relationship and the specific audit engagement;
- Evaluating compliance with relevant ethical requirements, including independence, in accordance with ISA 220;
- Establishing an understanding of the terms of the engagement, as required by ISA 210.
- The auditor shall establish an overall audit strategy that sets the scope, timing and direction of the audit, and that guides the development of the audit plan.
Establishing overall Strategy:
- In establishing the overall audit strategy, the auditor shall:
- Identify the characteristics of the engagement that define its scope;
- Ascertain the reporting objectives of the engagement to plan the timing of the audit and the nature of the communications required;
- Consider the factors that, in the auditor’s professional judgment, are significant in directing the engagement team’s efforts;
- Consider the results of preliminary engagement activities and, where applicable, whether knowledge gained on other engagements performed by the engagement partner for the entity is relevant; and
- Ascertain the nature, timing and extent of resources necessary to perform the engagement.
3. The auditor shall develop an audit plan that shall include a description of:
- The nature, timing and extent of planned risk assessment procedures, as determined under ISA 315.
- The nature, timing and extent of planned further audit procedures at the assertion level, as determined under ISA 330.
- Other planned audit procedures that are required to be carried out so that the engagement complies with ISAs.
4. The auditor shall update and change the overall audit strategy and the audit plan as necessary during the course of the audit.
5. The auditor shall plan the nature, timing and extent of direction and supervision of engagement team members and the review of their work.
The auditor shall include in the audit documentation:
- The overall audit strategy;
- The audit plan; and
- Any significant changes made during the audit engagement to the overall audit strategy or the audit plan, and the reasons for such changes.
Additional Considerations in Initial Audit Engagements
The auditor shall undertake the following activities prior to starting an initial audit:
- Performing procedures required by ISA 220 regarding the acceptance of the client relationship and the specific audit engagement; and
- Communicating with the predecessor auditor, where there has been a change of auditors, in compliance with relevant ethical requirements.