Quality Management at the Engagement Level Proposed ISA 220 (Revised) Megan Zietsman, Task Force Chair IAASB Meeting, New York, USA Agenda Item 3 December 10, 2018

Introduction

Outreach and Feedback Received in Q4 Disposition of IAASB comments from September 2018 IAASB Meeting Other input received from: IOSCO Committee 1, Auditing Sub-Committee IFIAR Standards Coordination Working Group IESBA, through written comments No significant matters Forum of Firms CEAOB SMPC letter

Walk Through of Proposed ISA 220 (Revised)

Introduction, Objective, and Definitions Proposed ISA 220 (Revised) – Agenda Item 3–A Section Paragraph(s) Application Material Introduction 1–7 A1–A15 Objective 8 None Definitions 9 A16–A21 Proposed Changes from Written Comments Para. A4 – Clarify how national requirements can be determined as at least as demanding as proposed ISQM 1 Para. A8 – Consider additional example

Proposed ISA 220 (Revised) – Agenda Item 3–A Leadership Responsibilities for Managing and Achieving Quality on Audits Proposed ISA 220 (Revised) – Agenda Item 3–A Paragraph(s) 11–13 Application Material A22–A30 Proposed Changes from Written Comments Para. 11 – Make clear that the engagement partner’s (EP’s) responsibility is for the engagement environment Para. 12 – Incorporate (c) into the lead in Para. 13(b) – Clarify that the EP reviews selected documentation for the purpose of monitoring the work of assignees

Relevant Ethical Requirements, Including Independence Requirements Proposed ISA 220 (Revised) – Agenda Item 4–A Paragraph(s) 14–19 Application Material A31–A42 Proposed Changes from Written Comments Para. 16 – Consider reference to firm policies or procedures Para. A38 – Delete in response to concern from IESBA

Proposed ISA 220 (Revised) – Agenda Item 3–A Acceptance and Continuance of Client Relationships and Audit Engagements Proposed ISA 220 (Revised) – Agenda Item 3–A Paragraph(s) 20–22 Application Material A43–A52 Proposed Changes from Written Comments None significant

Proposed ISA 220 (Revised) – Agenda Item 3–A Engagement Resources Proposed ISA 220 (Revised) – Agenda Item 3–A Paragraph(s) 23–26 Application Material A53–A68 Proposed Changes from Written Comments None significant

Engagement Performance – Direction, Supervision, and Review Proposed ISA 220 (Revised) – Agenda Item 3–A Paragraph(s) 27–31 Application Material A69–A84 Proposed Changes from Written Comments None significant

Other Sections Section Paragraph(s) Application Material Consultation 32 A85–A88 Engagement Quality Review 33 A89–A93 Differences of Opinion 34–35 A94–A95 Monitoring and Remediation 36 A96–A99 Proposed Changes from Written Comments Para. 32(a)(ii) – Incorporate difficult or contentious matters into (ii) Para. 33(a) – Change from “determine” to “be satisfied” Para. 36 – Consider ET responsibilities for network/network firm results Para. A95 – Remove first bullet at IESBA request

Taking Overall Responsibility, Documentation Section Paragraph(s) Application Material Taking Overall Responsibility 37 A100–A102 Documentation 38 A103–A105 Proposed Changes from Written Comments Para. 37(a) – Change “issues” to “matters” Para. 37(c) – Minor alignment with posted ISQM 2