Purpose and objectives

To perform independent post engagement quality inspections (EQI) of an agreed number of allocated financial audit engagement files to:

• find material departures from professional and regulatory standards (including VAGO policies and methodologies)
• find other areas that will improve audit efficiency and effectiveness.

As the inspector you will:

• conduct information gathering/debrief/observation meeting(s) as needed with the engagement team
• complete our financial audit engagement quality inspections program (FA EQIP) checklist
• supply draft and final observation reports (FA EQIP observation report) based on adequate completion of our quality inspection checklist (FA EQIP checklist)
• provide an overall grade for the engagement file in accordance with our overall assessment criteria.

Our engagements are undertaken either:

• inhouse by VAGO staff using VAGO's risk-based EPIC methodology
• by a partner and their staff from various audit service providers (ASP) using their firm's risk-based methodology. Where we engage an ASP to undertake an audit on our behalf, we have a VAGO engagement file which documents our ASP oversight of the ASP.

Scope

The supplier must conduct a quality inspection of allocated engagements files to meet the requirements of ASQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements and ASA 220 Quality Management for an Audit of a Financial Report and Other Historical Financial Information.

VAGO's 2025 EQI program will cover up to 15 financial audit engagements. The engagement files may be based on VAGO or other firms' methodology.

The supplier is to conduct the inspection utilising VAGO’s FA EQIP checklist (or an industry recognised equivalent, as agreed). Key areas to be assessed include:

• audit independence and quality management
• understanding the entity and risk assessment
• understanding the complexity of information systems supporting the financial report risk response procedures, (including, as appropriate adequacy of coverage of the general IT control environment and information systems) and evaluation of results
• sufficiency and appropriateness of audit evidence obtained (including sample sizes and documentation of auditor’s judgements)
• appropriateness of significant judgments made by the engagement team
• appropriateness of reporting
• compliance with the Audit Act 1994 and other mandatory requirements.

At a minimum, the inspector will meet with the engagement team to commence the inspection and to discuss the observations raised by the inspector as detailed in the draft observation report. The inspector must provide the draft and final observation report to the Audit Quality, Director prior to release to the engagement team.

For each assigned inspection, the supplier must provide to VAGO:

• a completed FA EQIP checklist
• a draft and final observation report including an inspection grade after consideration of any additional information from the engagement team.