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CA Final · Advanced Auditing, Assurance and Professional Ethics · Quality Control

A mid-sized CA firm is drafting its quality control manual. Which of the following documentation requirements for an engagement quality control review is consistent with SQC 1?

SQC 1 requires documenting that the firm's review procedures were performed, that the review was completed before the report was issued, and that the reviewer is unaware of any unresolved matters suggesting the engagement team's significant judgments and conclusions were inappropriate. Dates of signing alone or post-report reviews do not satisfy this.

  1. ADocumentation that the review procedures required by the firm's policies were performed, that the review was completed before the report was issued, and that the reviewer is not aware of any unresolved matters suggesting the team's significant judgments and conclusions were inappropriateCorrect
  2. BDocumentation only of the date on which the audit report was signed by the engagement partner
  3. CDocumentation that the review was completed within thirty days after the report date, together with the reviewer's fee
  4. DDocumentation that all disagreements between the engagement team and the client were resolved in the client's favour

Explanation

SQC 1 requires documentation of three things: that the firm's required review procedures were performed, that the review was completed before the report was issued, and that the reviewer knows of no unresolved matters that would make the team's significant judgments or conclusions seem inappropriate. The other options describe items that SQC 1 does not require, and the second and third are inconsistent with its terms.

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