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

During an audit at Desai & Co., the engagement quality control reviewer, Priya, was occasionally consulted by the engagement partner on a technical accounting query. The consultations were brief and infrequent. What is the position under SQC 1?

Priya remains eligible. SQC 1 says the engagement partner may consult the reviewer during the engagement, and such consultation need not compromise eligibility. Only when consultations become significant must care be taken to maintain objectivity, and the reviewer should not make decisions for the team.

  1. APriya is automatically disqualified and must be replaced by an external person
  2. BPriya remains eligible, as such consultation need not compromise her eligibilityCorrect
  3. CPriya may continue only if the client consents in writing
  4. DPriya may continue only if she also makes decisions for the engagement team

Explanation

SQC 1 states the engagement partner may consult the reviewer during the engagement and this need not compromise eligibility. Care is needed only if consultations become significant. Making decisions for the engagement team would itself threaten objectivity.

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