Cold vs. Hot Reviews (EQR) Flashcards
EQR = ?
equivalent to a hot review
define cold reviews
a post-issuance quality control process
what happens during a cold review?
audit file is reviewed AFTER the audit opinion has been issued
purpose of cold reviews?
- to assess compliance with auditing standards, firm’s policies/procedures
- ensuring high-quality work
- identifying areas for improvement for the future
what do EQR’s focus on?
- adherence to audit/accounting standards
- quality of documentation
- areas of significant judgement / complexity
who conducts a cold review?
individuals not involved in the audit engagement
often part of the firm’s internal/external quality monitoring program
define hot reviews/EQRs
quality control review that occurs BEFORE the issuance of the audit opinion
purpose of hot reviews?
to identify/resolve any significant issues
ensuring the audit work meets required standards before finalisation
focus of hot reviews?
- high risk areas
- compliance with standards / regulations
- significant judgements, assumptions, and conclusions
who conducts a hot review?
- an independent reviewer within the firm
when is an EQR mandatory?
when engaging with public interest entities or high-risk engagements
who conducts an EQR?
a senior and experienced professional not involved in the audit
key differences between a cold review and an EQR?
- timing
- purpose
- scope
- reviewer
timing of a cold review vs EQR
- cold review is post-issuance
- EQR is pre-issuance
scope difference between cold review and EQR?
- cold review is broad (entire audit file)
- hot review is targeted on high-risk judgements/conclusions
