The following factors should be considered;

  • Delegation

Audit work should be delegated by the reporting partner to staff who have appropriate experience, training, proficiency and independence. This will provide reasonable assurance that such work will be performed with due care by persons having the required technical competence required.

  • Direction

Audit assistants to whom work is delegated should be given appropriate instructions/directions. This involves informing assistants of their responsibilities and the objectives of the procedures they are to perform. This also involves informing them of matters such as the nature of the entity’s business and possible accounting and auditing problems that may affect the nature, timing and extent of audit procedures to be performed.

  • Supervision

This involves;

    • Monitoring the progress of the audit to consider whether assistants have the necessary skills and competence to carry out their assigned tasks.
    • Establish whether assistants understand the audit instructions
    • Ensure that work is being carried out in accordance with the overall audit plan and the audit program.
    • To identify and address any significant accounting and auditing questions raised during the audit.
    • Resolve any differences of professional judgment between personnel
  • Review

Work performed by each staff member should be reviewed by a person of equal or higher competence, to consider;

  • The work has been performed in accordance with the audit program
  • The work performed and the results obtained have been adequately documented.
  • All significant audit matters have been resolved or are reflected in audit conclusions.
  • The objectives of the audit procedures have been achieved; and
  • The conclusions expressed are consistent with the results of the work performed and support the audit opinion.

Peer review

Peer review may be described as an independent review of a firm’s accounting and auditing practices. It is intended that the review be done by practitioners upon fellow practitioners hence the term “peer review”.

The work of the review is limited to: -

  • Professional aspects of the practice.
  • Overall total quality control policies.
  • Professional aspects of firm’s accounting and auditing practices like maintenance of working papers work products such as financial statements.

Objectives of Peer Review

1. To promote compliance with professional standards and other technical pronouncements.

2. To provide reasonable assurance to users of financial statements that professional standards have been complied with in the performance of audit and related services.

3. To gain increased user confidence in the reliability of audited financial statements.

4. To promote uniform application of generally accepted methods of professional practice.

5. To establish a mechanism of continuous quality improvement in professional practice and a self-regulatory framework for policies and procedures.

6. To enhance the status and image of CPA’s to the public through the assurance of compliance and quality in the performance of audit and related services.

7. To help ensure that auditors are competent and independent and to identify potential problems in these regards at an early stage for necessary corrective action to be taken.

8. To help identify weaknesses in the audit process and provide technical assistance for professional development.

Reasons for introducing peer review

a. There is a desire on the part of professional bodies worldwide today to ensure that their members apply and observe professional standards.

b. The institute deems it appropriate to ensure adherence to existing technical standards

through this mechanism of monitoring compliance.

c. It is better for professional bodies to be self-regulating than to be government regulated.