Quality Review Program

Review of Engagements Questionnaire

Audit Engagements1
To be completed for audits of financial reporting periods commencing on/after 1 January 2010
Review Code: reviewId
Date questionnaire completed:
Engagement reference code:
Revenue and/or assets of engagement:

Engagement year end:

Initial that client consent has been sighted:

Audits performed under the Corporations Act

2001
What type of entity was audited?

Other audits
What type of entity was audited?

Public not listed (including company

limited by guarantee)

Incorporated association

Incorporated association

Small proprietary

Large proprietary

Other unincorporated body

Small proprietary

Solicitors trust account

Non-corporate disclosing entity

Real estate agents trust account

Other (please specify)

Other (please specify)

Was this an honorary audit?

Yes
No

For publicly listed entities, superannuation fund audits, reviews and consulting and other assurance engagements, please use separate questionnaires.

Institute of Chartered Accountants Australia

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Guide to requirements and application dates

This questionnaire is based on the standards shown in the table below.
Standard

Application date

APES 320 Quality Control for Firms

Reissued May 2009; effective 1 January 2010

ASQC 1 Quality Control for Firms that Perform Audits and Reviews
of Financial Reports and Other Financial Information, and Other
Assurance Engagements

Compiled as at June 2011; effective 1 January 2010

APES 110 Code of Ethics for Professional Accountants

Effective 1 July 2011, with requirements related to public interest entities (PIES) effective 1 January 2013

Corporations Act 2001

Including amendments up to January 2012.

Clarified ASA standards

Issued October 2009; effective for financial reporting periods commencing on/after 1 January 2010

About this questionnaire

This questionnaire has been designed to help you, the reviewer, assess whether the audit under review was conducted in accordance with Australian Auditing Standards and other
relevant professional standards and legislation.
Throughout the questionnaire the questions in bold relate to mandatory elements of the Auditing Standards and other professional standards or to matters required by legislation. You
must answer yes or no to these questions, or explain why they do not relate to this audit engagement. References have been included to assist you. The questions in normal print
relate to the audit procedures which a practice would commonly carry out to comply with Auditing Standards.
We suggest you start with an overall review of the whole audit, which will enable you to answer most of the questions. From this review identify one significant audit risk, and examine
this area in detail. You should then have enough information to make your overall assessment of the audit in Section 7.

1.

Audit independence and quality control

1.1

Is there evidence the engagement partner formed and

documented a conclusion on compliance with
independence requirements that applied to this
engagement?

Reviewer's Comments

ASA 220.11

Did the practice consider whether the entity is a public interest

entity?
Additional independence requirements apply to these entities.
APES 110 (290.25 AUST 290.26.1); Independence Guide2, Fourth
Edition, Section 5

1.2

Have the same senior personnel been used on this

engagement for a long period of time?
APES 110 (290.150)

If yes, has the effect on independence been considered and

appropriate action taken as necessary?

The Independence Guide is available on the Institute website at: http://www.charteredaccountants.com.au/Industry-Topics/Ethical-and-professional-standards/Independence-Guide

Review Code: reviewId

Reviewers Comments
1.3

Excluding accounting and taxation services performed by

the practice for this client, were any threats to
independence identified for this engagement?
APES 110 (290.7); Independence Guide, Fourth Edition, Section 7

If no, go to 1.5.
Situations which may give rise to threats to independence
include:

financial interest in clients;

loans or guarantees to or from the client;

business relationships with the client or its

directors/employees;

family or personal relationships with the clients

directors/employees;

employment of ex-partners or staff with the client, or client

staff with the firm;

temporary staff assignments;

serving as an officer or director of the client;

provision of non-assurance services to the client; and

dependence of the firm on the client for a significant

portion of the firms fees.
1.4

If yes, has the significance of the threat/s been

evaluated?
APES 110 (290.7)

Where necessary, were safeguards applied to eliminate

the threat/s or reduce them to an acceptable level?
APES 110 (290.7)

If yes, was the nature of the threat and the safeguard/s

applied documented?
APES 110 (290.29)

1.5

Did the practice provide any accounting services to the

client?
If so, how was the self-review threat reduced to an
acceptable level?
APES 110 (290.171) The firm may provide services related to the
preparation of accounting records and financial statements to an
audit client that is not a public interest entity where the services
are of a routine or mechanical nature, so long as any self-review
threat created is reduced to an acceptable level.

Review Code: reviewId

Reviewers Comments
1.6

Did the firm prepare tax calculations of current and

deferred tax liabilities/assets for the purposes of
preparing accounting entries that are material to the
financial statements?
APES 110 (290.184); Independence Guide, Fourth Edition, Section 7

If yes, has the effect on independence been considered and

appropriate action taken as necessary?
1.7

Did the firm provide tax planning or tax advisory services

to the client?
APES 110 (290.187 - 190)

If yes, has the effect on independence been considered and

appropriate action taken as necessary?
1.8

Did the firm represent the client in the resolution of a tax

dispute?
APES 110 (290.192 - 194); Independence Guide, Fourth Edition,
Section 7

If yes, has the effect on independence been considered and

appropriate action taken as necessary?
1.9

Have threats to independence and related safeguards

been notified to the assurance practice?
ASQC 1.22 and 23; APES 320.25 and .26

(Not appropriate for small practices.)

1.10

(a)

Was this audit carried out under the Corporations

Act 2001?

(b)

If yes:
(i)
were the general and specific independence
requirements of the Act complied with?
An overview of these requirements is given in the
Quality Control for Firms Questionnaire.
(ii)

was an independence declaration issued to

the directors in accordance with s.307C?

Review Code: reviewId

Reviewers Comments

2.

Planning

2.1

Is there written evidence that the auditor and the client

agreed on the terms of the engagement? ASA 210
requires the terms of engagement to be recorded in an
engagement letter or other suitable written form.
ASA 210.9

Does the engagement letter or similar include:

the objective and scope of the audit?
the responsibilities of the auditor?
the responsibilities of management?
identification of the applicable financial reporting
framework?
reference to the expected form and content of any
reports to be issued?
ASA 210.10

Where the terms of the engagement have changed, has

the auditor agreed the new terms with the client and
recorded them in an engagement letter or other suitable
written form?
ASA 210.16

2.2

In the case of a recurring audit, did the auditor assess

whether:

circumstances require the terms of engagement to

be revised?

there is a need to remind the entity of the existing

terms?
ASA 210.13

2.3

Did the auditor establish whether the preconditions for an

audit were present by:

determining whether the financial reporting

framework is acceptable?

obtaining agreement from management that it

acknowledges and understands its responsibility for:
- the preparation of the financial report?
- internal control?
- providing the auditor with access to all relevant
information and unrestricted access to persons
within the entity?
ASA 210.6

Review Code: reviewId

Reviewers Comments
2.4

Does it appear all members of the audit team (including

the engagement partner) had the appropriate competence
and capabilities to perform this engagement?
ASQC 1.31; APES 320.56; ASA 220.14

2.5

Did the auditor perform analytical procedures as risk

assessment procedures at the planning stage of the
audit?
ASA 315.6(b)

Did the auditor consider whether unusual or unexpected

relationships might indicate a risk of material
misstatement due to fraud?
ASA 240.22

2.6

Has the auditor established and documented an overall

strategy for the audit?
ASA 300.7; ASA 600.15

Does the audit strategy include:

the engagement scope?

the reporting objectives of the engagement?

the factors that are significant in directing the

engagement teams effort?

the results of preliminary engagement activities?

the nature, timing and extent of resources needed to

perform the engagement?
ASA 300.8

2.7

Has the auditor:

(a) determined materiality for the financial report as a
whole?
ASA 320.10

(b) determined performance materiality?

ASA 320.11

Review Code: reviewId

Reviewers Comments
2.8

Has the auditor developed and documented an audit plan

for the audit?
ASA 300.9; ASA 600.15

Does the audit plan include a description of:

the nature, timing and extent of planned risk

assessment procedures?

the nature, timing and extent of planned further

procedures at the assertion level?

other procedures that are required to be carried out

so that the engagement complies with ASAs?
ASA 300.9

Is there evidence the audit was planned with professional

scepticism, recognising that circumstances may exist
that cause the financial report to be materially misstated?
ASA 200.15; ASA 300 Appendix 13

2.9

Does it appear that the engagement partner and other key

members of the engagement team were involved in
planning the audit?
ASA 300.5

2.10

Is there evidence the engagement team discussed the

susceptibility of the financial report to material
misstatements, including from fraud and related party
transactions?
ASA 315.10; ASA 240.15; ASA 550.12

3.

Risk assessment and internal controls

3.1

To the extent appropriate for this client, has the auditor

documented their understanding of:
(a) relevant industry, regulatory and other external
factors including the applicable financial reporting
framework and relevant laws and regulations?
ASA 315.11(a); ASA 250.12

(b)

the nature of the entity?

ASA 315.11(b)

For further guidance refer to the Institutes practical guide to exercising professional scepticism in auditing, available at http://www.charteredaccountants.com.au/Industry-Topics/Audit-andassurance/Current-issues/International-audit-news/News-and-updates/Exercising-professional-scepticism-a-new-practical-guide

Review Code: reviewId

Reviewers Comments
(c)

the entitys selection and application of accounting

policies?
ASA 315.11(c)

(d)

the entitys objectives and strategies and the related

business risks that may result in risks of material
misstatement?
ASA 315.11(d)

(e)

the measurement and review of the entitys financial

performance?
ASA 315.11(e)

3.2

ASA 315 requires auditors to obtain an understanding of

internal control relevant to the audit. It divides internal control
into five components, with specific mandatory requirements
applicable to each. The five components are:

the control environment

the entitys risk assessment process

the information system

control activities

monitoring of controls.

To the extent appropriate for this client, has the auditor

documented their understanding of:
(a)

the entitys control environment?

ASA 315.14

(b)

the entitys process for identifying business risks

relevant to financial reporting objectives and
deciding about actions to address those risks?
ASA 315.15

Review Code: reviewId

Reviewers Comments
(c)

the information system relevant to financial

reporting, including the following:
(i) the significant classes of transactions?
(ii) the procedures by which those transactions
are initiated, recorded, processed and
reported in the financial report?
(iii) the related accounting records, supporting
information and specific accounts in the
financial report?
(iv) how the information system captures events
and conditions that are significant to the
financial report (e.g. impairment of assets)?
(v) the financial reporting process used to
prepare the entitys financial report, including
significant accounting estimates and
disclosures?
(vi) controls surrounding journal entries used to
record non-recurring or unusual transactions
or adjustments?
(vii) how the entity communicates financial
reporting roles and responsibilities related to
financial reporting?
ASA 315.18 and .19

(d)

control activities in order to:

(i) assess the risks of material misstatement at
the assertion level?
(ii) design further audit procedures responsive to
assessed risks?
(Control activities include authorisation,
information processing, physical controls and
segregation of duties.)
ASA 315.20

(e)

the major types of activities that the entity uses to

monitor internal control over financial reporting
and how the entity initiates remedial action to
address deficiencies in its controls?
ASA 315.22

Review Code: reviewId

Reviewers Comments
3.3

Has the auditor documented the inquiries made of

management and those charged with governance with
regard to fraud?
ASA 240.17, .18, .19, .21

Is there evidence the auditor applied professional

scepticism, recognising the possibility that a material
misstatement due to fraud could exist notwithstanding
the auditors past experience of the honesty and integrity
of the entitys management and those charged with
governance?
ASA 240.12

3.4

Has the auditor identified, assessed and documented the

risks of material misstatement (including fraud) at the
financial report level and at the assertion level for classes
of transactions, account balances and disclosures?
ASA 315.25; ASA 240.25

3.5

Has the auditor made a presumption that there is a risk of

material misstatement due to fraud in revenue
recognition?
ASA 240.26

If not, has the auditor documented the reason for that

conclusion?
ASA 240.47

3.6

As part of risk assessment:

(a) has the auditor identified and documented any risks
where it is not possible to obtain sufficient evidence
only from substantive procedures?
(b) for any such risks, has the auditor obtained an
understanding of the related controls?
ASA 315.30

3.7

As part of the risk assessment, have significant audit

risks been identified and documented?
ASA 315.27

Has the auditor considered whether significant risks

include the risk of material misstatement due to fraud?
ASA 240.27

Review Code: reviewId

Reviewers Comments
3.8

For any significant audit risks, has the auditor:

(a) obtained an understanding of the entitys controls,
including control activities, relevant to that risk?
ASA 315.29; ASA 240.27

(b) planned substantive procedures that are specifically

responsive to that risk, and include tests of detail?
ASA 330.21; ASA 240.30

4.

Audit evidence

4.1

Has the auditor prepared audit documentation that is

sufficient to enable an experienced auditor, with no
previous connection with the audit, to understand:
(a) the nature, timing and extent of the audit procedures
performed?
ASA 230.8(a)

(b) the results of the audit procedures performed and the

evidence obtained?
ASA 230.8(b)

(c) significant matters arising during the audit and the

conclusions reached thereon?
ASA 230.8(c)

4.2

Has the auditor recorded:

(a) the identifying characteristics of the items tested?
ASA 230.9(a)

(b) who performed the audit work and the date such
work was completed?
ASA 230.9(b)

(c) who reviewed the audit work and the date and extent
of review?
ASA 230.9(c)

Was the final engagement file(s) compiled within 60 days

of the audit report being finalised?
ASQC 1.45; APES 320.93 and .94; ASA 230.14

Review Code: reviewId

Reviewers Comments
4.3

Was the audit strategy and audit plan updated as

necessary throughout the audit?
ASA 300.10

4.4

Is there evidence that audit procedures were performed to

ensure all material events occurring after balance date
and up to the date of the audit report were identified?
ASA 560.6; ASA 600.38

4.5

Where the practice has used information produced by the

entity (e.g. ageing analysis of receivables) to perform
procedures, has evidence been obtained about the
accuracy and completeness of the information?
ASA 500.9

Specific areas
4.6

Where the practice has used external confirmations, did

the auditor:
(a) maintain control over confirmation requests?
ASA 505.7

(b) perform alternative audit procedures on nonresponses?

ASA 505.12

(c) investigate exceptions?

ASA 505.14

4.7

Where inventory was material, did the auditor obtain

sufficient appropriate evidence regarding the existence
and condition of inventory by:
(a) attending the physical inventory counting to:

evaluate managements instructions and

procedures?

observe the performance of managements count

procedures?

inspect the inventory?

perform test counts?

(b) performing audit procedures over the entitys final

inventory records to determine whether they
accurately reflected actual inventory count results?
ASA 501.4

Review Code: reviewId

Reviewers Comments
4.8

Did the auditor obtain evidence about compliance with

those laws and regulations generally recognised to have
a direct effect on the determination of material amounts
and disclosures in the financial report?
ASA 250.13

4.9

Where the auditor has assessed a risk of material

misstatement regarding litigation or claims, or where
material litigations or claims exist, did the auditor
endeavour to seek direct communication with the entitys
legal counsel through a letter of enquiry?
ASA 502.5

4.10

Has the auditor made enquiries of management regarding

the identity and nature of related parties and related party
relationships?
ASA 550.13

Is there evidence the auditor applied professional

scepticism, given the potential for undisclosed related
parties and related party transactions?
ASA 550.7

Has the auditor evaluated whether the identified related

party relationships and transactions have been
appropriately accounted for and disclosed in accordance
with the applicable financial reporting framework?
ASA 550.25

4.11

Did the auditor request written management

representations:

that management has fulfilled its responsibility for

the preparation of the financial report (particularly in
circumstances where the practice has provided
accounting services to the client)?

in relation to fraud?

in relation to compliance with laws and regulations?

where necessary to support other audit evidence

relevant to the financial report?
ASA 580.10; ASA 240.39; ASA 250.16; ASA 580.13

Review Code: reviewId

Reviewers Comments
4.12

Did the auditor evaluate whether the accounting

estimates in the financial report are reasonable?
ASA 540.18

Is there evidence that professional scepticism was

applied to this evaluation?
ASA 20015

Did the auditor review the outcome of accounting

estimates included in the prior period financial report?
ASA 540.9

4.13

Is there a bank audit certificate dated before the audit report?

GS 016

If not, did the auditor obtain sufficient, appropriate audit

evidence in relation to bank balances and treasury operations
(if any)?
4.14

Were audit procedures performed which were specifically

responsive to risks assessed at the planning stage?
ASA 330.6

4.15

Were substantive procedures performed for each material

class of transactions, account balance and disclosure?
ASA 330.18

4.16

Where the auditor planned to rely on controls, were tests

of controls performed?
ASA 330.8 and .10

4.17

Where the auditor used evidence about the effectiveness

of controls obtained in prior periods in the current period,
was sufficient appropriate audit evidence about their
effectiveness obtained?
ASA 330.14

4.18

Are audit procedures based on and responsive to the

assessed risks of material misstatement at the assertion
level?
ASA 330.6

Review Code: reviewId

Reviewers Comments
4.19

Did the auditor determine sample sizes sufficient to

reduce sampling risk to an acceptably low level?
ASA 530.7

Sampling risk arises from the possibility that the auditors

conclusions, based on a sample, may be different from the
conclusion reached if the entire population was tested.
Sample sizes may be determined statistically or
judgementally.
4.20

Does it appear appropriate security and confidentiality

was maintained over the engagement work papers?
ASQC 1.46; APES 320.96; ASA 230.Aus 16.1

5.

Assessment of audit evidence

5.1

Has the auditor concluded whether sufficient appropriate

audit evidence has been obtained from the audit
procedures performed?
ASA 330.26; ASA 600.44

Is there evidence the auditor applied professional

scepticism while performing the audit?
ASA 200.15

Examples of circumstances where audit documentation

should demonstrate clearly that professional scepticism has
been applied include:

discussions amongst the audit team

significant decisions regarding the susceptibility of the
financial statements to material misstatement due to
fraud or error
identified or suspected non-compliance with laws and
regulations
the basis for the auditors conclusions on accounting
estimates
identified information that is inconsistent with the
auditors final conclusion regarding a significant matter
the basis for the auditors conclusions on the
reasonableness of areas of subjective judgement
communications with client management and staff

Review Code: reviewId

Reviewers Comments
5.2

Is there evidence that:

the financial report was agreed to the underlying

accounting records?

material journal entries/adjustments were examined?

accounting estimates were reviewed for bias?

the business rationale for significant transactions

outside the normal course of business was
evaluated for fraud risk?
ASA 330.20(a); ASA 240.32(a); ASA 330.20(b); ASA 240.32(b);
ASA 240.32(c)

5.3

Were uncorrected misstatements assessed to determine

whether they were material either individually or in
aggregate?
ASA 450.11; ASA 600.45

Did the auditor consider whether misstatements identified

could be indicative of fraud?
ASA 240.35

Did the auditor inform those charged with governance of

any uncorrected misstatements (including those related
to prior periods) and the effect they may have on the
auditors report?
ASA 450.12, .13

5.4

Was managements assessment of the going concern

assumption evaluated and documented at the final stage
of the audit?
ASA 570.12

5.5

Were analytical review procedures applied and

documented at the final stage of the audit?
ASA 520.6

Did the auditor consider whether analytical procedures

indicated a previously unrecognised risk of material
misstatement due to fraud?
ASA 240.34

5.6

Does it appear the engagement partner took

responsibility for the direction, supervision and
performance of the engagement in accordance with
Auditing Standards?
ASA 220.15

Review Code: reviewId

Reviewers Comments
Ordinarily this involves, for example:

informing members of the audit team of their

responsibilities

tracking the progress of the engagement

addressing significant issues arising during the

engagement

determining review responsibilities on the basis that more

experienced team members review work performed by
less experienced team members.
5.7

Select one significant audit risk (or if none, select a

material account) and review this area in detail.
Audit area:

Were audit assertions at risk identified, and were

substantive procedures performed that were responsive
to that risk?

Was there an appropriate review of the information

system and related internal controls?

Were tests performed to ensure controls (if any) related

to the significant audit risk had been implemented?

Was the extent of reliance on controls to reduce

substantive testing appropriate under the
circumstances?

Were the substantive audit procedures selected

efficient?

Do the work papers adequately document the work

performed and the conclusions reached?

Do the work papers adequately document the resolution

of all significant issues?

Were any errors or weaknesses found dealt with

appropriately, given their impact on:
audit strategy/plan and risk assessment?
audit scope?
extent of testing?
assessment of misstatements?

6.

Reporting

Review Code: reviewId

Reviewers Comments
6.1

Is there evidence the engagement partner reviewed the

audit documentation and was satisfied sufficient,
appropriate audit evidence had been obtained to support
the conclusions reached?
ASA 220.17

6.2

Does the audit report contain the following elements:

title including the word independent?
addressed as required by the circumstances of the
engagement?
an introductory paragraph clearly identifying the entity
whose financial report has been audited, the title of
each statement that comprises the financial report
(including, where relevant, the Directors Declaration)
and specifying the date and period covered by the
financial report?
a statement that those charged with
management/governance are responsible for the
preparation and fair presentation of the financial
report?
a description of the auditors responsibilities,
including a description of an audit?
if relevant, a section headed basis for: qualified
opinion; adverse opinion or disclaimer of opinion, as
appropriate clearly setting out the modification?
a section headed opinion or qualified, adverse or
disclaimer opinion as appropriate?
if relevant, a section describing any emphasis of
matter relevant to the auditors report?
date signed in the name of the appointed auditor?
ASA 700; ASA 705; ASA 706

If there is a modification (qualification or emphasis of matter),

does it appear the type of modification is in accordance with
ASA 705 and/or ASA 706?
6.3

For a reporting entity:

Is the financial report presented in accordance with:

applicable Accounting Standards; and

other requirements for the type of entity being

audited?
SMO (IFAC statement of member obligations) 1.19

Review Code: reviewId

Reviewers Comments
6.4

For a non-reporting entity:

Do the financial report and the audit report clearly state:

that the financial report is a special purpose report;

the purpose for which it has been prepared; and

the significant accounting policies adopted in their

preparation and presentation?
Does the audit report include an emphasis of matter as
required by ASA 800.14?

6.5

Has the auditor concluded whether the financial report as

a whole is free from material misstatement?
ASA 700.11; ASA 800.11

Is the audit report dated after the date of the audit working
papers?
6.6

Were significant matters (including fraud, suspected

fraud, significant deficiencies in control or noncompliance with laws and regulations) reported to
management and/or those charged with governance?
ASA 260.16; ASA 265.9; ASA 240.40 - .42; ASA 250.19; .22

Were the matters reported in written form?

If reported orally, was this documented (e.g. via meeting
minutes)?
Was there evidence of follow up of matters identified in
previous audits?
If previously reported matters were not corrected, was their
impact considered in the audit strategy and audit plan?
6.7

Have any suspected (significant) contraventions of the

Corporations Act been reported to ASIC?
s.311 of the Corporations Act and ASIC Practice Note 34

Contraventions include:
attempts by the audit client to manipulate or mislead a
member of the audit team;
attempts by the audit client to interfere with the proper
conduct of the audit;
insolvent trading;
failure to comply with accounting standards;
fraud by officers or employees of the client.

Review Code: reviewId

Reviewers Comments

7.

Overall assessment
Based on your review of the audit engagement, is there
any indication that:

7.1

the audit was not conducted in accordance with

Australian Auditing Standards?

7.2

the audit opinion was not based on sufficient appropriate

audit evidence?

Answer no unless there is evidence that the engagement was unsatisfactory.