Skip to content

ACCA Strategic Professional · Advanced Audit and Assurance (International) · Professional and ethical developments

Marlow LLP audits Veritas Plc, a listed entity. The engagement partner proposes that the engagement quality review be performed by a senior manager from the audit team who knows the client well, to save time. Under ISQM 2, which is the most appropriate response?

The proposal should be rejected. Under ISQM 2 the engagement quality reviewer must be objective, with appropriate competence and authority, and must not be a member of the engagement team. A team manager would be reviewing judgements they helped make, which threatens objectivity.

  1. AAccept, because a manager's familiarity with the client improves the quality of the review
  2. BReject, because the engagement quality reviewer must be objective and not be a member of the engagement team, and must have appropriate competence and authorityCorrect
  3. CAccept, provided the manager reports to the engagement partner on review findings
  4. DReject, because only the firm's managing partner may perform an engagement quality review

Explanation

ISQM 2 requires the engagement quality reviewer to have the competence, capabilities and authority, and to comply with objectivity requirements, which means not being part of the engagement team. A team member would be reviewing their own work. Option D is wrong as any suitably qualified person who is not on the team may be appointed, not only the managing partner.

Did you get it right without looking?

One question tells you little. A timed set on Professional and ethical developments shows your real accuracy, how long you take and where you lose marks.

Practise Professional and ethical developmentsFree diagnostic mock

More Professional and ethical developments questions