Direction, Supervision and Review
(Ref: Para. 11)
A14. The nature, timing and extent of the direction and supervision of engagement
team members and review of their work vary depending on many factors,
including:
The size and complexity of the entity.
The area of the audit.
The assessed risks of material misstatement (for example, an increase
in the assessed risk of material misstatement for a given area of the
audit ordinarily requires a corresponding increase in the extent and
timeliness
of
direction
and
supervision
of
engagement
team
members, and a more detailed review of their work).
The capabilities and competence of the individual team members
performing the audit work.
PSA 220 contains further guidance on the direction, supervision and review of
audit work.
9
Considerations Specific to Smaller Entities
A15.
If an audit is carried out entirely by the engagement partner, questions of
direction and supervision of engagement team members and review of their work
do not arise. In such cases, the engagement partner, having personally conducted
all aspects of the work, will be aware of all material issues. Forming an objective
view on the appropriateness of the judgments made in the course of the audit can
present practical problems when the same individual also performs the entire
audit. If particularly complex or unusual issues are involved, and the audit is
performed by a sole practitioner, it may be desirable to consult with other
suitably-experienced auditors or the auditor’s professional body.
Documentation
(Ref: Para. 12)
A16.
The documentation of the overall audit strategy is a record of the key decisions
considered necessary to properly plan the audit and to communicate significant
matters to the engagement team. For example, the auditor may summarize the
overall audit strategy in the form of a memorandum that contains key decisions
regarding the overall scope, timing and conduct of the audit.
9
PSA 220, paragraphs 15–17.
PSA 300
