The International Auditing and Assurance Standards Board (IAASB) issued a new fact sheet on 2 May 2022 that provides guidance on the updated definition of an ‘engagement team’ in respect of audit engagements.
Note, however, that the definition of ‘engagement team’ specifically excludes an auditor’s external expert and internal auditors who provide direct assistance on the engagement.
The definition of ‘engagement team’ as contained in the International Standards of Auditing (ISA 220 (Revised)) has been updated.
The new definition of ‘engagement team’ is:
“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.”
An important change made to the definition was to clarify the previous reference to the inclusion of ‘any individuals engaged by the firm or a network firm who perform audit procedures on the engagement’ to ‘any other individuals who perform audit procedures on the engagement”.
The ‘engagement team’ definition is wider than just the partners and staff performing the audit engagement. The engagement team could include any other individual who perform audit procedures on the engagement. The new definition recongises that the engagement team could include:
- Individuals from another firm, even if not a network firm, and from the same or another location;
- Individuals from a service delivery centre or a service provider and from the same or another location;
- Component auditors from the firm, a network firm, or a firm that is not a network firm.
The revised engagement team definition therefore recognises that any individual that is involved in the audit engagement is part of the engagement team regardless of the person’s location or employment status and therefore ensures that the same independence requirements would apply to members of the engagement team, regardless on whether the individuals come from within or outside the firm or its network.
Context for the beginner
The ISA 220 (Revised) fact sheet has a useful decision tree that provides guidance on who is included or excluded from the engagement team. The fact sheet can be downloaded Here.
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