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

Kapoor & Associates, a firm of company secretaries, has completed its audit work on the financial statements of Vihaan Steels Ltd, a listed entity. The engagement partner wants to sign the report today, and the engagement quality control review is planned for next week. Under SQC 1, what is the correct position?

The report must wait. SQC 1 requires the firm's policies to ensure the engagement quality control review is completed before the report is issued, and a listed entity audit always needs one. Reviewing afterwards defeats the purpose of an objective evaluation of significant judgments.

  1. AThe report may be issued now because the review can be completed afterwards
  2. BThe report may be issued once the engagement partner records that the review is not needed for listed entities
  3. CThe review may be skipped because the engagement partner has already supervised the team
  4. DThe report should not be issued until the engagement quality control review is completedCorrect

Explanation

SQC 1 requires the firm's policies to require completion of the engagement quality control review before the report is issued. Audits of listed entities must have such a review. A post-issuance review does not meet the requirement, so the first option is wrong.

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