Examples of documentary evidence indicating adherence to ISA 220 (Revised) Quality Management for an Audit of Financial Statements

1. Engagement Acceptance Documentation: Records of client and engagement acceptance procedures, including client integrity assessments, independence evaluations, and confirmation of the firm’s competence and resources to perform the audit, as required by ISA 220.

2. Independence Declarations: Signed statements from the audit team confirming compliance with independence requirements, including disclosures of any threats (e.g., financial interests or relationships) and safeguards applied to mitigate them.

3. Engagement Team Competence Records: Documentation of the audit team’s qualifications, training, and experience, demonstrating that team members have the necessary skills and knowledge for the engagement, as per ISA 220’s resource requirements.

4. Audit Planning Memorandum: A detailed plan outlining the audit strategy, risk assessments, and procedures tailored to the engagement, evidencing direction, supervision, and review processes to ensure quality.

5. Engagement Quality Review Reports: For applicable engagements (e.g., listed entities), records of the engagement quality reviewer’s procedures, including reviews of significant judgments and conclusions, confirming compliance with ISA 220’s quality review requirements.

6. Supervision and Review Notes: Working papers showing evidence of supervision and review by senior team members, such as review comments, sign-offs, or checklists, ensuring quality control at each stage of the audit.

7. Consultation Records: Documentation of consultations on complex or contentious issues (e.g., accounting treatments), including the issue, advice sought, and conclusions reached, demonstrating adherence to ISA 220’s consultation requirements.

8. Time and Resource Allocation Records: Budgets and timesheets showing appropriate allocation of time and resources to key audit areas, reflecting the firm’s commitment to quality engagement performance.

9. Quality Control Checklists: Completed checklists or templates used during the audit to ensure compliance with ISA 220, covering areas like risk assessment, evidence gathering, and reporting.

10. Post-Audit Review Documentation: Records of any post-engagement reviews (e.g., hot or cold reviews) conducted to evaluate the audit’s quality, including findings and remedial actions taken to address deficiencies.