## SA 220 – Documentation by the Engagement Partner

The Engagement Partner must document quality control compliance as part of the audit file. This documentation demonstrates that quality control procedures were actually followed.

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### Four Key Areas of Documentation under SA 220

#### (i) Issues Identified — and Their Resolution

Document any issues that were identified during the engagement and confirm that they were resolved before the report was issued.

> The key point: not just that issues arose, but that each issue was resolved.

#### (ii) Conclusions on Acceptance / Continuance of the Engagement

Document the conclusion reached regarding whether to accept a new client/engagement or continue with an existing one.

> This links to the client acceptance and continuance procedures under SQC 1.

#### (iii) Conclusions on Compliance with Independence Requirements

Document conclusions confirming compliance with independence requirements that apply to the specific audit engagement.

> Independence threats, safeguards applied, and the final conclusion must all be documented.

#### (iv) Nature, Scope, and Conclusions / Results

Document the nature and scope of consultations undertaken during the engagement and the conclusions/results arising from those consultations.

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### Why Documentation Matters

It provides evidence that quality control was not just intended but actually performed.
It supports the Engagement Quality Control Review (EQCR) where applicable.
It protects the auditor in the event of regulatory inspection or litigation.

Worked example

### Example 1

Q: What are the documentation requirements of an Engagement Partner under SA 220?

The Engagement Partner must document the following:

(i) Issues identified and their resolution — Any significant issues identified during the engagement and confirmation that they were resolved prior to issuing the report.

(ii) Acceptance/Continuance conclusions — The conclusion reached regarding acceptance of a new engagement or continuance of an existing client relationship.

(iii) Independence compliance — Conclusions on compliance with independence requirements applicable to the audit engagement, including any threats identified and safeguards applied.

(iv) Nature, scope, and results of consultations — Where consultations were made on difficult or contentious matters, the nature and scope of those consultations and the conclusions reached.

### Example 2

Q: An auditor identified a significant issue during the audit but resolved it before issuing the report. What documentation is required under SA 220?

Under SA 220, the Engagement Partner must document:

The nature of the issue that was identified
How the issue was resolved
The conclusion reached

Merely documenting that an issue existed is insufficient — the documentation must demonstrate that the issue was properly resolved. This satisfies documentation requirement (i) under SA 220.

⚠️ Common exam mistakes

Documenting only that an issue was 'identified' without documenting that it was 'resolved' — both parts are required.
Omitting the independence compliance conclusion from documentation — this is a distinct, mandatory documentation requirement under SA 220.
Confusing documentation of acceptance/continuance conclusions with the procedures for acceptance/continuance themselves — the documentation records the conclusion, not just the process.
Failing to document the nature AND scope AND results of consultations — all three elements are required, not just the final conclusion.

Bare-Act text Para 24–25 (Documentation) · SA 220 – Quality Control for an Audit of Financial Statements · click to expand

The auditor shall document: (a) Issues identified during the engagement and how they were resolved; (b) The basis for the conclusions reached regarding the acceptance or continuance of the client relationship and the specific audit engagement; (c) The nature and scope of, and conclusions resulting from, consultations undertaken during the course of the audit engagement.

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SA 220 – Documentation Requirements by the Engagement Partner

Worked example

⚠️ Common exam mistakes