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

Mehta & Rao, a firm of practising professionals, is finalising its policies under SQC 1 for engagement quality control reviews. The managing partner asks what the policies must set out about such reviews. Which of the following correctly lists a matter the firm's policies and procedures must address?

The firm's policies must set out criteria for the eligibility of engagement quality control reviewers, along with the nature, timing and extent of the review and its documentation requirements. Client fees, engagement caps or client staff assistance are not matters SQC 1 requires these policies to address.

  1. AThe criteria for the eligibility of engagement quality control reviewersCorrect
  2. BThe fee payable to the engagement quality control reviewer by the client
  3. CThe number of engagements an engagement partner may accept in a year
  4. DThe identity of the client's internal auditor who will assist the reviewer

Explanation

SQC 1 requires the firm to establish policies setting out the nature, timing and extent of the review, the criteria for eligibility of reviewers, and documentation requirements. Fees, engagement caps and client staff assistance are not among these required matters.

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