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CA Final · Advanced Auditing, Assurance and Professional Ethics · Quality Control

Iyer & Partners is drafting its quality control manual. A reviewer's file for the audit of Ganga Pharma Ltd (listed) states only that the review was done. Which set of matters must the firm's documentation policy require to be recorded under SQC 1 about the engagement quality control review?

The documentation must show that the firm's review procedures were performed, that the review was completed before the report was issued, and that the reviewer knows of no unresolved matters suggesting the team's significant judgments and conclusions were inappropriate. A bare statement that a review was done is insufficient.

  1. AOnly the fees charged for the review and the name of the reviewer
  2. BThat the required review procedures were performed, that the review was completed before the report was issued, and that the reviewer is not aware of any unresolved matters suggesting the significant judgments and conclusions were inappropriateCorrect
  3. CThat the review procedures were performed and that the client's audit committee approved the reviewer
  4. DThat the review was completed before the report was issued and that the engagement partner agrees with every reviewer comment

Explanation

SQC 1 requires documentation that the firm's review 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 the significant judgments and conclusions. Audit committee approval and partner agreement are not among the requirements.

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