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

For the audit of Bharat Steel Ltd, the engagement quality control reviewer, CA Nair, completed the review. The firm's file note records that the review procedures required by firm policy were performed and that the review was completed before the report date. Which further item must the documentation under SQC 1 contain for the file to be complete?

The missing item is documentation 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. This is the third documentation element required by SQC 1.

  1. AA statement that the reviewer is not aware of any unresolved matters that would cause the reviewer to believe the significant judgments and conclusions of the engagement team were not appropriateCorrect
  2. BA signed confirmation from the audit committee that it agrees with the review
  3. CA copy of every working paper prepared by the engagement team
  4. DA statement that the review has reduced the engagement partner's responsibility

Explanation

SQC 1 requires documentation that the procedures were performed, that the review was completed before the report was issued, and that the reviewer is not aware of unresolved matters casting doubt on significant judgments and conclusions. The third element is missing. The review does not reduce the partner's responsibility, so the last option is wrong.

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