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Introduction ..................................................................................................... iii PM01 Agreement of scope, timing and fees ........................................................ 1 PM02 Establishing and monitoring budget ........................................................ 11 PM03 Engagement timeline, responsibilities and status .................................... 17 PM04 Appropriate resources ........................................................................... 23 PM05 Client assistance and monitoring ............................................................ 29 PM06 Significant client events and issues ........................................................ 33 PM07 Client communication and deliverables ................................................... 37

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Does your engagement letter contain enough detail to define the scope of our services, addressing possible implications of out-of-scope services and approach to additional billings (PM01)? Has your team established a budget, in enough detail to manage activity, which is frequently updated and monitored to identify variances and their root causes (PM02)? Do the hours budgeted or estimated hours to complete agree to your staffing requests or planning board (PM02)? Have you optimized the resource mix on your engagement and delegated appropriate tasks to less experienced members of the team (PM04)? Have you allocated tasks and planned the timing of work in alignment with entitys reporting deadlines and key team events, including consideration of any tasks that can be performed outside of busy season timing (PM03)? Do all your team members understand their project management responsibilities and the contribution they will make to effectively manage the engagement (PM04)? When working with experts, have you involved them early in the planning phase, agreed on work allocation, determined the budget for their work and established a process to ensure communication throughout the engagement (PM04)? Have you submitted a detailed client assistance schedule to the entity, following up regularly on any past due requests and assessing the effect on our engagement (PM05)? Does your team have a process to log, monitor and resolve audit, scope change and engagement management issues (PM06)? Does your team keep an up to date agenda or summary dashboard, including engagement status, issues and delays for engagement executives to facilitate a regular discussion with management (PM07)?

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Introduction
The purpose of this project management guide is to provide a framework, as well as helpful hints, tips and examples, to promote efcient and effective audit execution and consistently positive client experiences. Ever evolving economic conditions, competitive situations and client demands drive the teams to better manage time, costs, resources, deadlines, issues and client communication when executing our audits. Our highest performing teams around the world whether small or large, local or global use these techniques. They are founded on recognized project management principles and will enable us to deliver the highest quality client service and strong nancial performance on engagements by: Building a foundation for effectively setting the scope of service and corresponding level of fees Planning appropriate level and timing of resources to execute our audit services in a way that allows the most effective use of resources for our practice Assisting the engagement team to relate the audit procedures to be performed to the planned level of effort Increasing the likelihood of executing our audit procedures consistent with our audit plan Identifying and communicating variances from our planned scope of service Managing our costs effectively against a budget and avoiding unplanned estimated realization (ERP) adjustments Increasing client confidence that we are accountable and wisely spending the fee we negotiate Increasing quality and client satisfaction by focusing on early identification and resolution of issues Enhancing overall transparency and communication with our clients By focusing on these principles, we can improve the quality of client service, engagement economics, and the timely communication of valuable insights. The project management framework illustrates how we execute project management activities in the context of an audit at Ernst & Young. These project management activities are intended to be executed throughout the audit phases and will result in more effective interactions with management and enhanced team efciencies. The project management framework divides project management activities into the above topics and is anchored by EY GAM to support our audit work in an organized and structured way.
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Introduction

Project management framework

Project management guide

This guide contains the following contents for each of the project management topics (PM01 PM07): Overview objectives of the project management topic Key steps a suggested process or key activities to accomplish the objectives Key points and considerations helpful hints, tips and considerations to accomplish the objectives more easily or in a more robust manner Example enablers examples that can be easily maintained in Microsoft Word/Excel/Powerpoint or by using features already existing in GAMx or the Global Financial Information System (GFIS)

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Enhancing project management

We expect that all engagements will benet from each of the project management topics described above and should plan to implement or enhance execution of these activities. The degree or manner of implementation of these activities should be a team decision involving engagement executives based on engagement performance goals and evaluation of current approach, client needs, size and complexity of the engagement, etc. This does not necessarily require each engagement to follow the key steps exactly or to use the specic examples provided if the teams current processes and enablers already support the outlined objectives. We encourage all teams to use the guide as a way to: Evaluate and challenge current project management processes; and Implement or enhance execution of project management processes and enablers, no matter what the starting point. For someone new to the project management of an engagement, this guide provides the basic process and some useful examples to get you started. For more seasoned project managers, the Key Points and Considerations will provide some valuable ideas and challenges to enhance your existing approaches. Use this guide to inform, challenge and enhance your approach to managing your engagement.

Longer-term project management solutions

Because project management is a journey and not a destination, longer-term project management solutions are being developed including additional training and further integration of project management practices and enablers with other rm tools such as GAMx and GFIS to promote even greater consistency, effectiveness and efficiency.

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PM01 Agreement of scope, timing and fees

One of the first steps of engagement management is defining and managing the engagement scope. The engagement scope not only considers audit scope as defined in EY GAM, but also considers other factors such as the timing of the audit, client expectations, client availability and assistance and other factors which determine the amount of fees to be charged. Properly defining engagement scope and establishing processes for identifying, communicating and billing for time incurred outside the planned engagement scope with management leads to greater fee transparency and enhanced communication, which are critical elements of the audit client relationship framework. Those teams that engage in regular and frequent discussions on scope, timeline, issues and outof-scope services, and additional billings bring value to their clients by maintaining open dialog around drivers of audit cost, provide opportunities for management and those charged with governance to respond timely to issues and avoid last minute surprises. Discuss audit scope and timing with management and those charged with governance and formally document and communicate agreement as early as possible in the planning process by using: Engagement letter Specific audit services requested Fees and expenses Billing/payment schedule that corresponds to timing of work Responsibilities of both EY and management Other supplemental communications Detailed service assumptions (see example below) Timing of meetings/deadlines (see example below) Client assistance schedule (see PM05)

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Agree with management and those charged with governance what constitutes an out-of-scope service and therefore would result in additional billings. Out-of-scope services could result from: A request from management for EY to audit a component which EY does not need to audit to provide the audit opinion A request from management for EY to test controls where the audit team feel a substantative approach would be appropriate Not relying on the work of the entitys internal audit department when the audit team could Additional billings could also be sought for audit costs incurred as a result of changes during the audit which require EY to do additional work. Additional billings could result from: Changes in the entitys environment, performance or structure Changes in accounting and auditing standards Changes in regulation or actions by regulators Reduced level, quality or timeliness of client assistance Unplanned internal control remediation (when seperately reporting on internal controls) Unplanned testing and responses to control exceptions and misstatements Establish protocols with management and those charged with governance regarding out-of-scope services including: Examples of situations that are considered out-of-scope services Engagement team and entity personnel responsible for the initial discussion of out-of-scope services Frequency and timing of communicating out-of-scope services information Ensure EY team understands the scope of the engagement and example scenarios of out-of-scope services. Agree upon a process and protocols for capturing time and other details
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necessary for supporting potential additional billings. Perform budget monitoring regularly to detect variances that may indicate out-of-scope services (see PM02). Discuss out-of-scope services with those charged with governance and/or management as soon as identified to allow them an opportunity to rectify the situation and to perform root cause analysis for future improvements. Include identified out-of-scope services and additional billings in client communications (see PM07) to communicate them in regularly scheduled meetings. Invoice both audit fees (using an agreed upon billing schedule) and out-of-scope services on a timely basis.

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Key points and considerations

Consider documenting service assumptions, timing of meetings/deadlines and client assistance schedule through a formal communication that emphasizes its importance and effect on an efcient and effective audit. The example below should be customized based on discussions with management and those charged with governance. Example: Other supplemental communications [Individual responsible for Finance/Accounting] [ABC Company] Dear __________, As part of our commitment to providing consistent high-quality client service and to support the continuing efforts of both of our teams to complete the audit of [ABC Company] [the Company] for the year ended December 31, 20XX in an efcient and effective manner, we have provided the following schedules to document agreements made during various discussions with you. Detailed service assumptions our agreements with you regarding service protocols Timing of meetings/deadlines list of key dates for the audit Client assistance schedule detailed listing of documents you will prepare during the course of our audit provided to facilitate your preparation for the audit and is based on our prior knowledge of the Company Please note that the elements included on the schedules referred to above can be modied or supplemented as necessary during the course of the audit. Any such modications or supplemental requirements should be communicated as soon as determined to allow both of our teams the necessary time to respond appropriately. Should you have any questions or require further information, please do not hesitate to contact us. Yours very truly,

[Partner signature] [Partner name]

Key points and considerations (continued)

Consider using the following example to more clearly define the assumptions underlying the scope of services with the client.
Detailed service assumptions Area Services Details/Action Our services will comprise integrated audit of financial statements and internal control, review of interim quarterly financial statements, and statutory audits in attached list. We will obtain the same level of assistance as in 20X0 (approximately XXX EY hours). The engagement team will comprise XX years of audit, tax and IT professionals combined. We will conduct planning meeting with management and those charged with governance in April/May, with engagement procedures to commence in April (see Timing of Meetings/Deadlines below). We will communicate with those charged with governance significant findings and issues in accordance with the communication protocols we agreed at the beginning of our audit, including prior discussions with management. We will hold quarterly meetings with Internal Audit and Financial Accounting to discuss client assistance schedule, procedures to be performed, and timing of reporting. Entity personnel will prepare the audit schedules and support in an agreed-upon format prior to beginning of scheduled fieldwork. Entity personnel will provide supporting information (e.g., executed contracts, accounting records, third party correspondence, etc.) upon arrival and/or will provide subsequently requested data in a timely manner. A single point of contact for both parties (Senior for EY and designated person for the entity) will coordinate engagement details. They will hold weekly meetings to address progress, issues, and open items. The entity will provide additional international quarterly reviews assistance, including details of fluctuations. We will conduct early discussion on out-of-scope services with designated Finance Executive including expectations and a fee range before work is completed. We will provide written management letter addressed to management. We will hold weekly discussions with the appropriate entity personnel on issues, progress, timeline/deadlines, client assistance delays, billings and out-of-scope services.

Internal audit assistance Team continuity Timing of work

Communication with those charged with governance and management Extent of client assistance

Additional client assistance Out-of-scope services and additional billing process Internal control communications Other administrative client communications

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PM01 Agreement of scope, timing and fees

Key points and considerations (continued)

Detailed service assumptions Area Timing for response to inquiries Other insights Details/Action Both EY team and entity personnel will respond to telephone calls and e-mails within XX hours. We will include insight sessions (e.g., IFRS, Transaction Advisory Services due diligence, accounting topics) as one of the agenda items during separate meetings with those charged with governance and management. The client will provide a specific location at the client site for the EY team.

Location

Many clients establish their period-end timelines in advance. Consider meeting with management while they are developing their timeline to request that deadlines for EY deliverables are integrated into their timetable to ensure the overall timing of the audit is coordinated with management. Consider using the following example to more clearly dene the timing of our work and key meetings or deadlines established by the entity. After agreement with management and those charged with governance, this template serves as the starting point for building the Engagement Timeline (see PM03).
Example: timing of meetings/deadlines Period end audit timing of meetings/deadlines Area/Action Planning/Issues Planning/Issues Planning/Issues Pre-audit required documents Interim fieldwork Financial statements Planning/Issues Pre-audit required documents Beginning of period end fieldwork 6 Details Quarterly status and issues meeting and scope discussion Quarterly status, issues and interim planning meeting Quarterly status, issues and period end planning meeting Documents requested prior to the start of interim fieldwork in client assistance package given to EY Interim fieldwork begins First draft financial statements (without footnotes) given to EY Quarterly status and issues meeting Documents requested prior to the start of fieldwork in client assistance package given to EY Documents requested in client assistance package given to EY Date April XX, 20XX June XX, 20XX September XX, 20XX September XX, 20XX

September XX, 20XX November XX, 20XX December XX, 20XX December XX, 20XX

January XX, 20X1

Key points and considerations (continued)

Period end audit timing of meetings/deadlines Area/Action Financial statements Audit results Financial Statements Details EY reviews preliminary financial statements Draft EY audit results presentation given to management Final financial statements (with footnotes) given to EY, including all supporting schedules and footnote support. Managements comments on EY audit results presentation EY comments on financial statements and Management Discussion and Analysis Press release given to EY EY sign off on distribution drafts Mailing to those charged with governance EY reviews preliminary financial statements Financial statement review meeting with those charged with governance Financial statements finalized and filed Date February XX, 20X1 February XX, 20X1 February XX, 20X1

Audit results Financial statements

February XX, 20X1 February XX, 20X1

Press release Financial statements Those charged with governance Financial statements Those charged with governance Financial statements

February XX, 20X1 February XX, 20X1 February XX, 20X1 February XX, 20X1 February XX, 20X1 February XX, 20X1

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Key points and considerations (continued)

Negotiating audit fees
Audit fees should be discussed and agreed with management and those charged with governance after full consideration of budgeted hours by activity and person (see PM02) and cost by level and the following scope of services and their effect on audit costs: EY GAM preliminary audit scope considerations Requested scope of service and deliverables Meeting frequency and protocols Changes in composition and skill set of management team Level of client assistance Extent of modification to information systems Required timing to perform the audit Timing of management processes supporting the audit Extent of reliance on and timing of internal audit Client expectations of scope and materiality Additional requests of management and those charged with governance Responsiveness and service levels Involvement of experts Location, facilities and client access Timing and frequency of billings Fee discussions with management and those charged with governance should also include establishing expectations for the consequences of changes in the above expectations (client assistance, timing, responsiveness, availability, scope) and protocols for discussing these out-of-scope services and additional billings.

Key points and considerations (continued)

Component teams should discuss the fee negotiation process and responsibilities for setting subsidiary fees with primary teams prior to discussions with local subsidiaries. Communicate any local agreements with entitys management and those charged with governance to the primary team for their consideration. Discussions should include consideration of the process to be followed for tracking and collecting for out-of-scope service hours.

Tracking out-of-scope service hours

Establish separate out-of-scope activity codes (either within the main engagement code or a separate engagement code) to identify out-of-scope hours on a timely basis.
Example: Potential out-of-scope engagement activity codes

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PM02 Establishing and monitoring budget

Preparing a budget by activity assists teams in estimating an appropriate audit fee, setting estimated recovery for EY internal financial reporting and determining appropriate use of resources. Communicating the detailed budget to all members of the engagement team establishes expectations about time required to complete assigned audit areas and assists in understanding relationships between the level and extent of audit procedures and the time expected to be incurred. Monitoring budget against actual time on a regular basis, along with timely follow up on unexpected variances, allows teams to identify potential engagement delivery issues and allows monitoring of the progression of the engagement. Determine the appropriate level of budgeting and a process to document and monitor (see Key points and considerations section below). Prepare budgeted time by person and activity and apply the standard bill rate per hour corresponding to the team members level.
Example: Budget by person/activity with recovery calculation and staffing reconciliation

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PM02 Establishing and monitoring budget

Determine and agree high-level budget assumptions (number of internal audit hours, readiness of entity personnel, audit scope, etc.) with management and those charged with governance. Review budget and financial metrics (ERP, staff leverage, etc.) with engagement executives and amend budget as necessary. Establish fee and billing schedule with client/primary audit team (referred work) based upon budgeted fees. Update resource planning board or scheduling request to align with budget by person/level and reflect planned realization percentage in GFIS. Ensure resources are scheduled in alignment with the engagement timeline (see PM03). Communicate budget allocations by person/activities with the team, discussing areas in detail as necessary to ensure the budgeted time is reflective of the expected work to be performed. Determine a process for capturing actual time and developing estimates to complete. Determine the approach, identify the owner(s) and frequency of determining the estimates to complete. Update actual time incurred by person/activity from GFIS Estimate remaining time to complete the engagement by person/activity based on status of work performed/reviewed Analyze variances (evaluate root cause by discussion with the team) in actual plus Estimate to Complete (ETC) compared to budget and determine appropriate courses of action (e.g., internal reallocation of work by team member, increased engagement executive involvement required, discussion with management regarding expanded scope of work, increased level of client assistance, additional billings, etc.) Analyze that ETC hours are in alignment with the remaining scheduled time

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Example: Budget to actual monitoring

At completion of the engagement, fully analyze variances in the budget to actual analysis (evaluate root cause by discussion with the team) to better plan next periods budget and to take steps for continued project management and audit execution improvements.

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PM02 Establishing and monitoring budget

Key points and considerations

A budget should be broken down into relevant activities covering the entire audit cycle that provide a sufficient level of detail to drive responsibility and accountability. Activities should be sufficiently detailed to monitor the work, but not so detailed that the monitoring becomes cumbersome. Consider the following: Structuring the activities around EY GAM objectives (Understand the Business, Preparation for Team planning event (TPE)/Post-interim event (PIE), Preparation of Entity-level controls form, etc.), significant accounts, SCOTs, or entity organization (divisions/groups/location) Grouping time allocations for walkthrough, internal control work and substantive procedures by significant account or individually segregated by account/SCOT Capturing engagement executive time in one activity Capturing the time of experts by creating separate activities Including quarterly reviews, major administrative tasks (such as engagement management), etc. When planning the budgeting process for a component team, align the budgeting process to support required inputs to the Global Fee Sharing process, including preparation of the Global Fee Sharing-Summary Budget Information Request Form found on the Global Accounts Community Home Space as necessary. When determining budgeted hours by activity, consider the following: Prior period actual hours, updated for scope changes and current period developments Prior period variances and areas of recognized inefficiencies Concentration of time on more risky areas versus the amount of time on noncomplex, routine or administrative areas Level and continuity of staff to perform the activity Time spent in comparison to similar engagements (total hours and hours by activity) For certain activities (and more likely by exception) a detailed build-up by task might be necessary to: understand the time requirements with the task owner ensure alignment of engagement executive expectations of time to be spent

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Key points and considerations (continued)

challenge the appropriateness and clarity of the work program validate the work program aligns with the combined risk assessment (CRA) highlight areas of additional client assistance When performed along with the task owner, this can increase team member buy-in by asking directly how much time they expect it will take to perform the activity.

Establishing activity codes

The activity code structure, frequency of review and enablers used will likely differ depending on the size of the engagement. Some indicative measures by engagement size are shown below:
Engagement size (Hours) Activity number for tracking Budget to actual frequency Format of enablers and input tools 400 or less 4-20 Weekly during engagement Excel, GFIS (WIP, Activity Codes and Out-of-Scope Codes) 400-5,000 20-50 greater than 5,000 50+ based on engagement needs

Every two weeks or monthly in slower times and weekly in busy times Excel, GFIS (WIP, Activity Codes, and Out-of-Scope Engagement Codes), formal budget tool (e.g., Timetracker)

GFIS is now used by the vast majority of EY member firms and can provide useful information for monitoring the budget and reducing the effort involved in the process. Consider using GFIS activity codes to gather actual hours: Establish GFIS activity codes to track time at the same level of detail as established budget activities. Activity codes are a level below the GFIS audit engagement code and can be easily set up by providing a list of activities to the finance organization (once established, they can be rolled forward to subsequent periods). Actual time is captured as team members enter their hours into the local time reporting tool, such as gT&E (or equivalent) against these activity codes and will be accumulated and reported in the weekly WIP details. This automated process eliminates the effort involved in manually accumulating actual time by activity for budget to actual analysis. The weekly WIP reports by activity also allow for a quicker update and a regular review of the actual time incurred. Use the ETD WIP Detail Excel file, a standard report available in GFIS, to sort and summarize time detail by person and activity (only takes minutes) for analysis against the detailed budget.

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PM02 Establishing and monitoring budget

Key points and considerations (continued)

Review the actual time from the WIP to ensure all engagement time is appropriately charged on a timely basis. Reconcile actual time entered into the budget to the hours in the WIPs to ensure consistency.

Refer to pm02_-_engagement activities_examples_a4.xlsx for suggested activity codes for tracking.

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PM03 Engagement timeline, responsibilities and status

A clearly documented engagement timeline, covering key client events, deliverables and team activities, is essential for monitoring/meeting engagement deadlines and client expectations. At a basic level, an engagement timeline will show key client dates, corresponding phases of audit work and the timing of involvement of experts. At a more detailed level, an engagement status and responsibilities plan can be used to coordinate team activities, including appropriate sequence, completion and review cycle for elements of audit work. Establish the engagement timeline based on the agreed timing of client deadlines/meetings (see PM01) and key client events. The engagement timeline illustrates the timing of work to provide less experienced personnel reminders on upcoming activities that require advance preparation. It should: llustrate the logical and sequential flow of all activities e.g., planning, walkthroughs, internal controls work, quarterly/half-year review procedures, interim procedures, period end procedures, etc. Give special consideration to timing when working with other EY service lines or EY professionals, experts , entitys internal audit group, entitys third party outsourced processing center or multilocation teams, etc. Confirm that the timing and deadlines of these specific engagement activities aligns with client deadlines Discuss the engagement timeline with the engagement team and with management.

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PM03 Engagement timeline, responsibilities and status

Example: Engagement timeline

Ensure engagement timeline and budget are correlated in order to schedule resources for individual phases of the engagement. Prepare an engagement status and responsibilities schedule with detailed breakdown of activities into tasks showing the split of roles and responsibilities between team members: This allocation may be performed using the GAMx work allocation functionality For larger, more complex team structures, this analysis may be performed on a separate enabler and may require separate tabs or sections based on timing of the audit (a starting point for this enabler may be an extract of the GAMx work allocation or detailed budget). It is important to make a choice of one of these approaches early, to remove the risk of inconsistency and duplicated effort.

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Example: Engagement status and responsibilities plan

Determine within the team (including other EY service lines) the approach and frequency for monitoring status of the engagement. This applies to monitoring of overall engagement status as well as status of individual detailed activities/tasks. The success of the engagement timeline as a tool, as with the other project management enablers, is dependent on how regularly it is used and updated. During busy season it will be monitored on a daily or weekly basis while outside of this period less regular monitoring may be required. When using the work of others (e.g., internal audit, outsourcers, etc.), discuss the process and frequency of status monitoring of their contribution to our engagement work. Monitor the stage of completion of the overall engagement as well as specific activities: Monitor the level/percentage of completion and the estimated time left to complete specific activities to identify when work may be taking longer than expected and hence may affect the engagement timeline Ensure monitoring includes other EY service lines or experts, internal audit and others Include and update required status information in client communications (see PM07) and communicate timely In case of changes to the original engagement timeline or delays, take appropriate action to adjust the plan to reflect any new situations or circumstances. This may include rescheduling activities, modifying resources assigned or reassessing deadlines with management. If the changes are a result of the identification of out-of-scope services, consider additional billings. Upon completion of the engagement, challenge the engagement timeline, split of responsibilities and status monitoring and propose improvements for next period.

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PM03 Engagement timeline, responsibilities and status

Key points and considerations

Timeline considerations
Consider improvements identified during last periods audit when establishing the engagement timeline, assigning responsibility and deciding on status monitoring for the upcoming period. Allow for some delays in the engagement timeline do not set the deadline for the very last possible day. Set expectations around key activities within the entitys closing process, for example: Availability of entity personnel during period end closing Point to begin and complete the review and reading of the draft accounts/financial statements (e.g., after review by controller, draft number 2, distribution to those charged with goverance) Version of trial balance that will be audited Timing of drafting new footnote disclosures With referred work, contact the primary team sufficiently before the planned start of the engagement to obtain group audit instructions and consider the effect on timeline. If the group audit instructions are not yet available, discuss with the primary team the expected scope and timing, including challenging whether the level of documentation in prior periods was sufficiently focused for group reporting purposes. Bring forward engagement work to reduce pressure and overtime during the busy season and reduce unutilized time outside of busy season. The following examples are items which generally could be moved out of busy season: Engagement planning Preparation of client assistance schedule Controls testing Timely reading of board minutes Substantive procedures when the related CRA is minimal or low (with appropriate roll-forward procedures at period end) Tax-related procedures Testing of significant events/unusual transactions as they occur

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Key points and considerations (continued)

Selected general audit procedures Independence procedures Initial preparation of period end deliverables (e.g., preparing reports to those charged with governance, significant accounting and auditing issues that should be included in the Summary review memorandum (SRM), leveraging results of interim reviews, etc.) Completion of statutory audits

Scheduling
Schedule TPE and PIE sufficiently in advance to secure attendance of all engagement executives . Schedule key review and sign-off dates in the calendar of the engagement executives and set up closing meetings with management for relevant stages/activities of audit sufficiently in advance. Schedule time (ideally as part of planning) to prepare client assistance schedules (see PM 05), send confirmation letters and roll-forward prior periods GAMx engagement, etc. Schedule planning and wrap-up at the client site to maximize access to the client. Set up regular team status meetings to discuss progress of work, budget, etc. When involving experts, schedule their time in advance to best align their work with the engagement timeline and deadlines, agree on their budget and their deliverables.

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PM03 Engagement timeline, responsibilities and status

Key points and considerations (continued)

GAMx considerations
Consider using GAMx to allocate engagement responsibilities and to monitor engagement status. There are different functionalities within GAMx to assist with responsibilities allocation and status monitoring: Responsibility allocation on screen level for preparers and reviewers Detailed allocation of work on step level (filter capability by person or past due items) Due dates for objectives and worksteps High-level status overview on Home screen (not started, prepared, reviewed and completed) Key documentation table to display important documents for the engagement executives attention
Example: GAMx work allocation

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PM04 Appropriate resources

An integral part of project management is ensuring the appropriate resources are assigned to the engagement at the right times. These activities are heavily integrated with budgeting, engagement timeline and responsibility allocation, therefore they are discussed in context in PM02 and PM03. We should also consider the following additional ways to make the best use of resources and efciently focus our efforts on an engagement: Building the team Assigning project management responsibilities Teaming with experts and others Delegating and supervision

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PM04 Appropriate resources

Key points and considerations

Building the team
Consider the following when identifying and requesting staff to build the engagement team. Balancing these considerations will require discussion with existing and prospective team members, as well as those responsible for administering the stafng process: Review and challenge prior period team staffing as a starting point for the current period staff request (or for new engagements, consider using the staffing structure on similar jobs as a reference point). Determine current period staffing mix as a result of the budget allocation by activity/level (see PM02). Confirm staffing proposal with the engagement executive. When building the team, consider factors such as: Audit strategy Continuity of staff Team member professional development needs and requests Plans for future team composition to accommodate promotions, rotation, required staffing mix Engagement economics (including relative charge rates and corresponding experience/capability of staff) Staff availability (including the local office mix of staff and policies) Reconsider the above factors when there are unanticipated or forced changes in the team.

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Key points and considerations (continued)

Assigning project management responsibilities
Establish and agree on team member responsibilities for effectively managing the engagement. Consider using the following table to help assign these responsibilities, keeping in mind that these responsibilities can be allocated differently based on team size, structure and experience.
All team members Timely review of work and sign off in GAMx Timely recording of actual hours by activity Identify and log issues Identify improvement opportunities to bring efficiency to EY and value to the client Accountability for budgets, timelines, and issue tracking for their assigned areas Alert reviewers when areas are ready for review Lead the scope, timing and fees agreement with management and those charged with governance Approve the budget, timeline, status, and issue tracking processes Active involvement and communication with management when there are significant variances, delays, issues and improvement opportunities Communicate with the team significant engagement related decisions, including agreed-upon scopes, client assistance, and related deadlines Review and agree on resolution of significant issues Prepare details to support scope, timing and fee discussions with management and those charged with governance Ensure team members understand scope and have a process for identifying out-of-scope services Lead budget and monitoring process and take action on variances Request appropriate resources and initiate changes as necessary Lead the engagement timeline, assignment of responsibilities, and status tracking process Lead issue management and resolution process Determine impact of variances, delays, and issues, and initiate discussions with management Prepare budget and monitor budget-to-actual variances Prepare and maintain the engagement timeline and status tracking Assign engagement responsibilities Prepare and monitor the client assistance schedule and serve as point of contact to collect the client assistance schedules Monitor the issue log and assist in issue resolution Maintain list of activities that can be performed by staff in downtimes Schedule regular team status meetings Maintain a list of points for consideration in next periods audit and refer to 25

Partner in charge of the engagement

Manager/ Senior Manager

Senior

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the list before beginning planning

Key points and considerations (continued)

Teaming with experts and others
Plan and coordinate involvement of experts and, when applicable, required consultations and reviews (e.g., Country/Area PPD, or designated subject matter resource; Area US Capital Markets Center; Area IFRS Desk; engagement quality reviewer) early in the audit. Assign an engagement team member to be a first point of contact with the expert for engagement-related questions and issues as well as tracking the experts progress (generally with periodic update meetings). Agree scope, deliverables and timing with the expert (see PM01). Incorporate the experts budgeting, budget monitoring, and status reporting into overall engagement project management activities. Ensure expert attends key engagement planning meetings and someone from the core engagement team attends key client and internal planning meetings initiated by the expert such as process review planning meetings, information technology planning meetings, etc. Invite experts to the GAMx workspace at the appropriate time and agree on signoff protocols so documentation and conclusions are combined and coordinated. Establish and communicate the roles and responsibilities of the engagement team and experts, including: Identifying, requesting and coordinating receipt of client assistance schedules and other client requests Determining scope and process for coordinating with component teams Determining specific procedures to be performed by the expert to ensure no duplication with procedures performed by the engagement team Protocols for communicating significant issues identified (through client and EY organization)

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Key points and considerations (continued)

Delegating and supervision
Ensure team members are aware of the budgeted hours for their work (at an activity level) to enable them to plan tasks effectively; encourage team members to provide feedback regularly on time spent against this budget to create awareness and accountability for timely delivery. Customize work programs so there is sufficient detail and specificity for staff to perform the procedures efficiently. Review assigned work with team members new to an area to support their understanding as well as validate that the worksteps are clear. Ensure they are making appropriate use of prior period audit workpapers as a starting point for the current period audit documentation. Ensure team members know where and when to get help if needed so they dont spend time unnecessarily. Regularly check team member progress, including discussion of issues encountered and any resolutions taken. Consider beginning workpaper reviews by having the responsible team member walk the reviewer through the area to discuss progress, issues and resolutions in order to highlight issues early and focus the review on riskier areas. Use Microsoft Word functionalities such as track changes to facilitate document review before finalization. Ensure that all changes are accepted in the final version before archiving. Discuss review notes, provide feedback and explain how/why so that mistakes can be corrected in the future. Prioritize review notes so that the most important are addressed first. This can be achieved in GAMx using a simple numbering convention in the title of the review notes to order them appropriately. Assign work in lower risk areas to less experienced team members and higher risk areas to more experienced team members. Consider including less experienced team members in the data gathering or validation/vouching procedures in higher risk areas.

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PM04 Appropriate resources

Key points and considerations (continued)

Routine administrative tasks may be performed by an Account Coordinator, Client Service Administrator, Account Support Associate/Assistant, Administrative Assistant, Global Shared Service Centers or less experienced members of the team. For quality purposes, it is important that the delegation of these activities is done with appropriate involvement, review and supervision of more senior members of the engagement team.
Example: Administrative tasks Engagement administration Introduce/orient new team members. Prepare initial staffing/resource requests and monitor staffing for changes and conflicts. Organize agendas and coordinate arrangements with international offices for on-site visits to component teams. Monitor status of preparation, review and sign-off in GAMx. Maintain team contact list as well as key entity personnel contact list for updating firm databases. Obtain copies of supporting documentation (e.g., foreign office invoices). Monitor performance of periodic performance reviews. Prepare engagement letters and management representation letters and monitor receipt of signed copies. Distribute interoffice engagement or group audit instructions and related reporting activities, including monitoring of responses from the component teams. Schedule meetings with management and prepare/distribute materials for meetings. Coordinate independence and client continuance procedures. Send and follow-up on third-party confirmations. Assist in preparing the reports for those charged with governance. Set up engagement codes and activities, and create billing schedules. Print or circulate weekly WIPs. Prepare/assist with ETC, engagement status monitoring, and profitability analysis. Prepare summary of engagement charges by activity, by person, rank (including prior period history). Summarize out-of-scope time incurred for separate billing.

Audit support tasks

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PM05 Client assistance and monitoring

Discussing and agreeing on required levels of client assistance and specic client documentation in advance of the audit assists management and EY in being prepared to begin audit activities in a coordinated manner. A client assistance schedule documents the agreement with management regarding the nature and timing of the documentation to be received to support the audit, including: Specific schedules, workpapers or other support required Entity personnel responsible for providing the documents Dates the documents are due to EY A client assistance schedule can be used to monitor status and track deciencies in the quality of documentation. This information can be used to initiate corrective actions by the client or provide a basis for additional billings. Identify and list required client documentation (schedules, workpapers or other support) and due dates in a client assistance schedule that corresponds to the clients situation. Conrm that the due dates for the documentation align to the agreed schedule of audit activities, deadlines and deliverables.

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PM05 Client assistance and monitoring

Example: Client assistance schedule

Confirm the client assistance schedule (both deliverables and due dates) with engagement executives and management. Provide the client assistance schedule to management well in advance of performing the audit work (controls testing, interim, and period end) and consider making this part of a formal communication (see PM 01). Maintain contact with management, updating the status of requested items up to the start of the audit work. Assess the entitys readiness for the audit and reassess timing of field work as necessary.

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Regularly update the client assistance schedule to reflect: Date documentation was received Status of the documentation (received or overdue) Comments regarding delays and the effects on the engagement (e.g., document is two days overdue and EY is shifting work to accommodate the delay which will affect the completion timing) The quality of the requested documentation and resulting action (e.g., documentation contained errors and was returned to entity personnel, which will affect timing and increase testing hours) The quality of the requested documentation and resulting action (e.g., documentation contained errors and was returned to entity personnel, which will affect timing and increase testing hours) Monitor the client assistance schedule for delays in documentation requests or issues with the quality of the documentation. When delays are identified: Re-circulate outstanding items to responsible client contacts Elevate more critical open items to the client communication (see PM07) and meet to discuss the effect of these items on audit timing and scope At completion of the engagement, consider whether improvements regarding content or timing can be incorporated into next periods client assistance schedule, for example: Items requested that were not originally included on the schedule Expanding client assistance listing to request supporting details (invoices, contracts, etc.) as well as schedules Consider need or ability to alter timing of requested client assistance based on current period results, such as timely collection and reading of minutes

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PM05 Client assistance and monitoring

Key points and considerations

Provide detailed descriptions of requested schedules to ensure that the preparer understands the request, including copies or examples as necessary, to highlight the format and content. Communicate the client assistance schedule to primary client contact(s) with a formal cover letter (see PM01) to signify the importance of the clients preparation for the audit. Consider instances in the prior period audit when original client assistance items were reworked. Ensure current period requests are clear regarding the desired format to eliminate this rework by the team. Consider consolidating all client assistance requests on a single Excel spreadsheet to allow filtering on: Due dates (upcoming, overdue, etc.) Name of entity personnel responsible for providing the documentation Account or SCOT the documentation is related to Department, division, operating segment or location responsible for the documentation Specific departments, client contacts or process owners

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PM06 Significant client events and issues

Client events and issues can occur throughout the audit. Establishing an approach to identify, communicate and address issues that arise will ensure the engagement is under control and is delivered as promised. Issues fall into the following categories: Accounting/audit issues may affect the audit opinion/report Engagement management issues may affect the management and engagement timeline or the client relationship Scope change issues significant client events that may alter the timing or scope of work These issues are often interrelated an audit issue requiring significant additional work will likely affect engagement delivery while a short-notice change in the clients delivery dates or an unplanned client event may require additional resources in order to perform the originally agreed upon work by a given deadline. Decide as a team an effective and efficient approach for capturing and monitoring issues. Although different in nature and effect, all issues should be dealt with in the same diligent and timely manner. Identify issues through regular communication within the team and with management and/or those charged with governance, timely performance and review of work, engagement status monitoring and key client events. Assess each issue, judging whether it is significant enough to require logging. Ensure that all relevant issues, including those raised by EY professionals and experts, are logged for follow-up and appropriate action by the engagement team. Prioritize issues based on their likely effect or urgency to focus efforts on those which will have the biggest effect on the audit opinion and engagement delivery, involving engagement executives in this judgment.

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PM06 Significant client events and issues

Assign an EY owner for each issue, as well as appropriate client ownership as applicable. When possible, avoid sharing ownership when resolving issues. When involving more than one person in researching and resolving complex issues, clarify the roles each person has for following up and ultimately resolving the identified issue. Monitor the progression of issues to understand whether the original assessment of their severity is not changed by ongoing events and to reflect progress made while working on and resolving open issues or responding to changes in scope. Monitoring also allows us to reprioritize issues and hence shift focus and efforts to the appropriate priorities. Communicate issues with management and/or those charged with governance in a way that reflects the priority of the issue: Certain issues can be dealt with immediately with the responsible client contacts Other issues should be dealt with through a more formal communication process Significant issues and their status should be discussed regularly through client communications (see PM07) to maintain active involvement of management and/or those charged with governance Identify potential additional billings based on the effect of issues on the originally planned audit procedures. Monitor issues through resolution and conclusion considering any audit requirement to document conclusions. Consider the effect of current period issues encountered on planning of future audits.

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Key points and considerations

Given the varying scale and complexity of engagements, the enablement surrounding the process may differ, however the process is fundamentally the same. Options for logging issues include: GAMx can be used to document engagement management issues through the use of the Description field in the Attention items screen. If the Audit Strategies Memorandum and Summary Review Memorandum extract text boxes are left blank and the rest of the properties are completed as normal, this allows the issue to be documented in GAMx. The issue will appear on the homepage, but it will not become part of the final audit documentation. A simple issue log to list both engagement delivery and audit issues enables the team to effectively monitor the status and ownership of these issues. When we are expecting or beginning to incur time against specific issues, capture this in the issue log and include discussion on recovery of any additional work in the regular client communications (see PM07) Schedule a regular time to meet with the team during the course of the audit fieldwork to openly discuss audit, engagement management and scope change issues the nature of some issues is such that they may interact. Consider weekly (or other suitable frequency) team status updates and issues meetings. A client issue may present the opportunity to provide recommendations for improvements to processes or to provide additional permitted services to the client. Note: Audit and scope change issues must be appropriately documented in the workpapers. Conversely engagement management issues should not form part of the work documented in support of the audit opinion.

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PM06 Significant client events and issues

Key points and considerations (continued)

Prioritizing issues
In GAMx, consider adding a number or symbol to the start of the title corresponding to the type, significance or other category as determined by the team (e.g., 1. Late notification of client deadline, 2. Audit issues, 3. Resourcing issue, 4. Scope change). This allows for sorting based on category or priority for more focused resolution.
Example: GAMx Issue Log

Issue log
Using an Excel issue log, the type of issue or priority can be identified and filtered through numerical assignments or other indicators.
Example: Issue Log

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PM07 Client communication and deliverables

Timely and consistent two-way communication with management and those charged with governance regarding audit progress, status, and issues enhances the overall client relationship and: Provides an opportunity to pro-actively communicate the audit results Reduces surprises by discussing issues timely Provides a means of discussing delays in audit work that may affect the agreed timeline Reduces the effort needed to compile engagement status information to meet ad-hoc engagement update requests Improves the clients confidence in our ability to execute the audit effectively Provides an opportunity to discuss upcoming client events that may affect the audit scope or delivery Engagement executives can also benefit from this consistent communication format and approach to highlight, summarize and focus on key issues in audit service delivery, in addition to being involved in the specific client discussions. Identify the types of engagement information to communicate with management and/or those charged with governance. Consider those items that will provide a perspective on the status of the engagement, items that could present a challenge (timing, out-of-scope services, client assistance requests) and key audit deadlines. Examples include: Summary of the overall progress of the audit, including upcoming deadlines, deliverables, and meetings Areas identified outside original scope of work, including new client events Overdue client assistance items Issues that are being worked on and resolution status Delayed activities Billing and out-of-scope services

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PM07 Client communication and deliverables

Determine with management and those charged with governance the format and frequency of the client communication, considering their expectations and the size and complexity of the engagement. Identify the sources of information that will provide the inputs for the communications format, such as: Engagement timeline (see PM03) Client assistance schedule (see PM05) Issues log (see PM06) Budget-to-actual analysis (see PM02) Prepare and update the client communication as agreed to reflect the current state of the audit. Review the client communication with the engagement executives and agree on an approach for handling potentially sensitive issues. Meet with management and those charged with governance to discuss the client communication, agree to actions and document within issues log for follow-up and monitoring. Follow-up on status of agreed actions before preparing the next client communication.

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Key points and considerations

Regularly established status meetings and well-designed deliverables are a great way to increase the clients understanding and ownership of their part of the overall audit effort, which promotes candid dialog about ways to increase the effectiveness and efficiency of our efforts. Accumulate issues into a summary deliverable describing opportunities for improvement. For less complex engagements, a simple discussion agenda with specic bulleted items discussed as often as needed throughout the audit may be appropriate.
Example: Basic engagement status agenda XYZ Company Engagement Status Update [Date]

Audit progress Scope/Significant client events Upcoming Assistance Issues/Delays Billing

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PM07 Client communication and deliverables

Key points and considerations (continued)

For larger or more complex engagements a standard format, such as an Engagement Dashboard, should be used to discuss activity and issues with management on a regular basis (at least weekly during key periods). The example below can be customized for the types of information and format agreed with management.
Example: Engagement dashboard

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