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

For a listed client's audit, reviewer Kabir Nair wants to prepare the documentation of his engagement quality control review. Which of the following must the firm's documentation policy require him to record?

The reviewer must document that he is not aware of any unresolved matters that would make him believe the team's significant judgments and conclusions were inappropriate. Documentation must also show the procedures were performed and that the review was completed before the report was issued.

  1. AThat the reviewer is not aware of any unresolved matters suggesting the team's significant judgments and conclusions were inappropriateCorrect
  2. BThat the engagement partner agreed with every comment the reviewer raised
  3. CThat every working paper of the engagement was re-performed by the reviewer
  4. DThat the reviewer has verified the client's compliance with all applicable laws

Explanation

SQC 1 requires documentation that the required procedures were performed, that the review was completed before the report was issued, and that the reviewer is not aware of any unresolved matters casting doubt on the team's significant judgments and conclusions. Re-performing all working papers is not required, since only selected working papers on significant judgments are reviewed.

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