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

Ghosh & Partners finishes the audit of Anand Pharma Ltd, a listed entity, and the engagement partner signs the audit report on 10 May. The engagement quality control reviewer completes the review on 14 May. What is the position under SQC 1?

This is not acceptable. SQC 1 requires the engagement quality control review to be completed before the report is issued. The review ended four days after the report was signed, so the timing requirement was not met whatever the reviewer concluded.

  1. AAcceptable, since the review was completed within a week of the report
  2. BAcceptable, provided the reviewer had no unresolved matters
  3. CNot acceptable, because the review must be completed before the report is issuedCorrect
  4. DAcceptable, because listed entity audits only need review before the annual general meeting

Explanation

SQC 1 requires the firm's policies to require completion of the engagement quality control review before the report is issued. Here the report was issued on 10 May and the review finished on 14 May, so the timing requirement was breached. Absence of unresolved matters does not cure the timing.

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