ACCA AA Syllabus E. Review And Reporting - Final Review - Notes ^{1 / 2}

ISA 220 sets out that the quality review should consider the planning, supervision and review of the audit in determining whether quality standards have been met.

During the audit it is likely that the auditor will come across errors in the financial statements.

The auditor should keep a list of these throughout the audit and report them to management

The 4 Reviews

1. Engagement Partner Review

   Main focus here is Quality Control

   It is a review of the audit work - not the evidence - so just ensuring proper standards and procedures followed

   • Proper Direction & Supervision was given

   • Reviews were carried out throughout

   • Consultation where needed occurred (with internal and external people)

   • Quality control review

2. Quality Control Review

   Carried out by a senior NOT involved in the audit

   • Ensure opinion is based on evidence obtained

   • Ensure independence of team

   • Ensure documentation reflects the work performed

3. Documentation Review

   • Evidence that independence issues have been considered

   • Quality Control Review

4. Audit Evidence Review

   Ensure there is sufficient and appropriate evidence

   • Has the audit strategy and plan been followed?

   • Has the work been carried out to standards?

   • Has consultation taken place where needed?

   • Has a memo been produced with points to be considered on next year's audit?

   • Is there evidence of review at all levels?

Overall review of financial statements

Procedures an auditor should perform include:

1. Reviewing compliance with IFRS and local legislation disclosure

2. Reviewing accounting policy disclosure - checking they agree with the accounting treatment adopted and are sufficiently disclosed

3. Reviewing consistency of FS with the auditor’s knowledge of the business and the results of their audit work

4. Perform analytical procedures

5. Reviewing the aggregate of uncorrected misstatements to assess whether in aggregate a material misstatement arises

6. Assess whether the audit evidence gathered by the team is sufficient and appropriate to support the audit opinion