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

For an audit of Bharat Steels Ltd, a reviewer discusses matters with the engagement partner and reviews the financial statements and draft report. The engagement partner then argues that, because a review was performed, his own responsibility for the audit opinion stands reduced. Which statement is correct under SQC 1?

The engagement partner's responsibilities are not reduced by the engagement quality control review. SQC 1 says explicitly that the review does not reduce them. Complexity and risk affect only how extensive the review is, not the partner's responsibility for the report.

  1. AThe responsibility shifts to the reviewer once the review is documented
  2. BThe responsibility is shared equally with the reviewer
  3. CThe review does not reduce the responsibilities of the engagement partnerCorrect
  4. DThe responsibility is reduced only for complex engagements

Explanation

SQC 1 states that the engagement quality control review does not reduce the responsibilities of the engagement partner. Complexity affects only the extent of the review, not who bears responsibility.

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