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Driving Professional Excellence Audit Quality is our shared, number one priority.

This priority is fundamental in our quest to be recognised as the leader of our profession. Set out below are the FY13 Global Audit Imperatives which are at the core of delivering the highest quality audits and driving Professional Excellence in accordance with Deloitte standards. These imperatives are a critical element in responding to practice review findings and external inspections. They are a benchmark against which each and every practitioner should measure their performance on their engagements and should be first priority and top-of-mind for every audit practitioner. This program is to be used by engagement teams to document how they have embedded the 8 audit imperatives into their audit engagements. This program is mandatory for all audit engagements with years ending on or after 31st December 2012. This checklist, together with the underlying WPs referred to herein, must be provided to the EQCR as part of the documents that are otherwise provided to EQCR, as required by the EQCR Manual. Audit Imperative 1: Audit procedures must clearly reflect acting as an evaluator with an attitude of professional skepticism Exercise Professional Skepticism Documenting our professional judgment demonstrates that we appropriately applied these concepts and considered relevant facts, evidence, contradictory information, and professional literature to arrive at our conclusions. When our audit documentation is clear about our procedures, judgments, and conclusions we are able to sufficiently evidence our professional skepticism. To demonstrate the appropriate application of professional judgment, professionals are expected to: 1. Identify the areas of the audit where the most significant judgments have been made. For example, significant judgments often relate to group audit scoping decisions, determining materiality, identifying and performing substantive procedures that are specifically responsive to significant risks, including those related to management estimates and accounting for significant, unusual transactions 2. Determine whether to consult with the EQC Reviewer and/or others. When in doubt about whether to consult, initiating consultation is the prudent and recommended course of action. Consultation mitigates our risks and may provide insights as to whether the financial statements are materially misstated and/or whether our audit procedures comply with professional standards. Furthermore, consultation strengthens our ability to explain and support the conclusions we reached (including how we exercised professional judgment). Consultation readies us to address challenges or questions from third parties. 3. Critically review audit documentation in areas requiring significant judgment to verify that our working papers demonstrate that professional skepticism has been applied and that they sufficiently describe the basis for conclusions involving significant judgments. Consider whether our documentation: Identifies the issue, including how it affects the financial statements and/or our audit and any related issues that were considered Outlines the relevant facts, including the source documents that we examined, the personnel we interviewed, and other sources of information we considered, and the further audit procedures performed, including test of controls and substantive procedures References the literature, including the relevant standards, policies or guidance, where

applicable Analyzes the issue, for example by demonstrating the reasonable alternatives we considered, those with whom we consulted, and the evidence (positive and contradictory) that we obtained Expresses our conclusion and the reasoning behind it Apply guidance material in relevant guides, practice aids, and tools to make sure an appropriate level of professional skepticism is reflected in procedures performed, evidence obtained and conclusions reached.

Leading practices Conduct an engagement team meeting to discuss best practices related to documenting the use of professional judgment and professional skepticism on the engagement Approach auditing from this perspective: If managements number were materially wrong, then how would I know? instead of Is managements number reasonable? Plan for active involvement of the Engagement Partner and senior members of the ET in planning, directing and reviewing Consult with the EQC Reviewer and/or others Prepare and review documentation by anticipating questions that third parties may ask Please document below how the team has implemented audit imperative #1 during the current year:

WP Reference: ________________________________

Audit Imperative 2: Demonstrate expertise in understanding internal controls, including

understanding process flows and testing internal controls where applicable Become experts in internal controls 1. Consider the manner in which the standards are applied on your audit engagements, including linking your audit documentation to the standards by adding references to the related requirements. 2. Reading and applying any applicable Deloitte Internal Control Guidance. 3. Preparing flow charts to enhance and document our understanding of the flows of transactions, including the identification of risks of material misstatement and relevant controls. The following resources are available: Flowcharting Practice Aid A Guide in Preparing Flowcharts Developing Flowcharts Guide Leading practices Consulting on areas that require significant judgment Preparing flowcharts to document our understanding of the flow of transactions, including identifying risks of material misstatement and controls Plan for understanding the process flows by interacting with finance and non-finance teams of the client Plan for identifying controls that are direct and precise, including high level and review controls Observing a review type control to obtain evidence that the control operated as designed Structuring our tests of operating effectiveness based on the detailed description of the control to obtain evidence that the control operated as designed [including dual purpose testing, roll forward procedures, journal entry testing, sample size and selection strategy, IPE testing] Plan for use of IT Specialists Please document below how the team has implemented audit imperative #2 during the current year:

WP Reference: ________________________________