Examining the extent of audit manager involvement in audit engagements is essential for assessing team dynamics and ensuring adequate supervision. Let’s explore the description, interpretation, and IRBA Code considerations regarding Workload: Manager Supervision.
Indicator: Workload: Manager Supervision (%) represents the total audit manager hours charged to the audit client as a percentage of the total audit hours for completed engagements.
Purpose: This metric gauge the level of supervision provided by audit managers.
How to Interpret the AQI:
Higher Percentages: Indicate greater involvement of audit managers in engagements. This could result from various factors, including complex engagements or a lack of engagement partner review. However, high percentages may also signal inadequate engagement partner involvement or understaffing.
Consideration of Firm Model: Understanding the firm’s engagement model and the nature of engagements is crucial for interpreting this metric accurately. Different firms may have varying levels of manager involvement based on their operational structure and client needs.
IRBA Code Considerations:
Professional Competence and Due Care: Audit professionals are required to maintain professional knowledge and skill at the required level and act diligently in accordance with applicable standards. This principle underscores the importance of competent and diligent supervision by audit managers.
I was not surprised to see this ratio going down substantially from 2021 and 2020 as we see the tail end of the COVID-19 pandemic effects on audit engagement, staff upskilling and manager involvement.
This made me re-read a previous piece I did: Bridging the COVID-19 Knowledge Gap and it does seem that relevant steps were put in place, and we were able to avoid a potentially continuing escalating crisis.
For our Caseware users, we launched our complimentary hashtag #GetAhead training series designed to enhance the skills of trainees. By enrolling your trainees, you not only elevate the quality of their work but also ensure that manager supervision is effectively utilised at the appropriate level.
As audit professionals, it’s imperative to ensure appropriate resource allocation, maintain professional competence, and uphold the highest standards of diligence and professionalism.
