Except for the smallest of audit engagements, it is not possible for an auditor to perform the entire audit him/herself. This is because the audit would take too long to complete and/or the cost of performing the audit would be prohibitive. This means that it is usually necessary for the the auditor to delegate significant work (or authority to further delegate work) to other staff members within the audit firm. Delegation is only possible if there is appropriate supervision and review of the work performed. The person that supervises and reviews work performed by others is a person who is at least as equally experienced and competent as the person to whom the work/ authority has been delegated, and is usually the person that delegated the work/ authority.
An auditor only delegates work/ authority to persons (i.e. delegatees) with the appropriate experience [fn] and competence. This applies to all levels of organization within the audit firm. Thus, a senior staff member to whom work/ authority has been delegated only further delegates work/ authority to other staff members that have the appropriate experience and competence.
An auditor or staff member delegating work/ authority ensures that the person to whom the work/ authority has been delegated (i.e. the delegatee) completely understands the nature of the work that the person is required to perform as well as the limits of any delegated authority.
Auditors and audit staff members supervise the work delegated by them to others so as to minimize the risk of a lessening of the standard of care. The more complex the nature of the work delegated and the less experienced or competent the staff member to whom the work has been delegated, then the greater the degree of supervision.
Auditors supervise work while it is being performed by the delegatee. This contrasts with the review of work (see below) which auditors carry out after the delegatee has performed the work.
The purpose of supervision is to provide the supervisor with a degree of assurance that the work of the delegatee is being performed (as opposed to was performed) in accordance with the instructions given and with the appropriate standard of care.
The purpose of this quality review is to ensure that the work was performed in accordance with instructions given, with the appropriate standard of care, and in accordance with any delegated authority. In relation to work performed in the control testing, substantive testing and opinion formulation stages, the reviewer ensures that audit procedures performed conform with the audit programs, that audit procedures required to be performed have been properly performed, that the evidence obtained has been properly documented and that conclusions reached are consistent with the evidence obtained.
Copyright, Australian Educational Research Pty Ltd. Any person accessing this site agrees to the Terms of Use.