Quality Management for Audit of Financial Statements
Quality management is important to ensure that the firm and the auditors have fulfilled responsibilities
in accordance with professional standards and that the engagement report is appropriate.
The updated ISA 220 revises the definition of the audit team:
Engagement Team: All partners and staff performing the audit engagement, and any other individuals
who perform audit procedures on the engagement, excluding an auditor’s external expert and internal
auditors who provide direct assistance on an engagement.
The new definition recognizes that, regardless of location or employment status, if an individual is
performing audit procedures, then that individual needs to be independent and their work needs to be
appropriately directed, supervised and reviewed.
ISA 220 (Revised) also recognizes that individuals involved in the audit engagement may not necessarily
be engaged or employed directly by the firm.
For example, the engagement team may include individuals such as:
• Individuals from firm’s Information Technology (IT) team;
• The firm’s experts in valuations;
• Individuals performing audit procedures relating to inventory at a warehouse or remote location
Remember, there are two types of individuals that are specifically excluded from the definition of the
engagement team, (1) an auditor’s external expert and (2) internal auditors who provide direct
assistance on an engagement
Page | 181
Quality management is important to ensure that the firm and the auditors have fulfilled responsibilities
in accordance with professional standards and that the engagement report is appropriate.
The updated ISA 220 revises the definition of the audit team:
Engagement Team: All partners and staff performing the audit engagement, and any other individuals
who perform audit procedures on the engagement, excluding an auditor’s external expert and internal
auditors who provide direct assistance on an engagement.
The new definition recognizes that, regardless of location or employment status, if an individual is
performing audit procedures, then that individual needs to be independent and their work needs to be
appropriately directed, supervised and reviewed.
ISA 220 (Revised) also recognizes that individuals involved in the audit engagement may not necessarily
be engaged or employed directly by the firm.
For example, the engagement team may include individuals such as:
• Individuals from firm’s Information Technology (IT) team;
• The firm’s experts in valuations;
• Individuals performing audit procedures relating to inventory at a warehouse or remote location
Remember, there are two types of individuals that are specifically excluded from the definition of the
engagement team, (1) an auditor’s external expert and (2) internal auditors who provide direct
assistance on an engagement
Page | 181
