PCAOB on engagement quality review

Question 1

What are the requirements regarding concurring approval of issuance of an engagement report as prescribed by Public Company Accounting Oversight Board (PCAOB) auditing standards?

Answer 1

1. )The firm cannot give permission to the client to use the engagement report until the engagement quality reviewer provides concurring approval of issuance.
2. )The engagement quality reviewer cannot express such approval if there is any “significant engagement deficiency.”

Question 2

ist the qualifications required of an engagement quality reviewer under Public Company Accounting Oversight Board (PCAOB) auditing standards.

Answer 2

1. )Must be an “associated person” of a registered public accounting firm
2. )Must have competence, independence, integrity, and objectivity

Question 3

Under Public Company Accounting Oversight Board (PCAOB) auditing standards, what should the engagement quality reviewer do to evaluate the significant judgments and conclusions of the engagement team?

Answer 3

1. )Hold discussions with the engagement partner and other members of the engagement team.
2. )Review the audit documentation.

Question 4

Describe the basic requirements associated with Public Company Accounting Oversight Board (PCAOB) auditing standards dealing with “engagement quality review.

Answer 4

PCAOB auditing standards require an engagement quality review and concurring approval before issuing the report for audit (or review) engagements conducted under PCAOB standards.

Question 5

What is the purpose of the engagement quality reviewer under Public Company Accounting Oversight Board (PCAOB) auditing standards?

Answer 5

To perform an evaluation of the significant judgments made by the engagement team and the related conclusions reached and in preparing any engagement report(s)

Question 6

Describe the engagement quality review “cooling off” restriction in Public Company Accounting Oversight Board (PCAOB) auditing standards.

Answer 6

The person serving as engagement partner during either of the two audits preceding the audit subject to engagement quality review is not permitted to serve as engagement quality reviewer, unless the registered firm qualifies for a specific exemption to this requirement.

Question 7

Identify the differences in the Statements on Quality Control Standards (SQCS) of the American Institute of Certified Public Accountants (AICPA) relative to Public Company Accounting Oversight Board (PCAOB) auditing standards.

Answer 7

SQCS do not:

1. )Require an “engagement quality review” for any type of engagement.
2. )Impose a “cooling-off” restriction or a requirement that the reviewer must be an “associated person” of a registered public accounting firm.
3. )Require a “concurring approval of issuance” before issuing a report.
4. )Specifically require that engagement quality review documentation must be retained with other documentation.