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CS Professional · Compliance Management, Audit and Due Diligence · Peer Review and Quality Review

Bansal & Co. is preparing documentation for an engagement quality control review of a bank audit. The reviewer has confirmed that the firm's review procedures were performed and that the review was finished before the report was issued. Which further item must the documentation also record under SQC 1?

The documentation must also record that the reviewer is not aware of any unresolved matters that would make the reviewer believe the engagement team's significant judgments and conclusions were inappropriate. SQC 1 lists this alongside performance of procedures and completion before the report is issued.

  1. AThat the reviewer is not aware of any unresolved matters suggesting the engagement team's significant judgments and conclusions were not appropriateCorrect
  2. BThat the engagement partner's responsibilities have been transferred to the reviewer
  3. CThat the client's audit committee has approved the reviewer's appointment
  4. DThat every working paper of the engagement was re-performed by the reviewer

Explanation

SQC 1 requires documentation of three things: procedures performed, completion before the report is issued, and that the reviewer is not aware of unresolved matters casting doubt on significant judgments and conclusions. Option D is wrong because the review covers selected working papers, not all.

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