Engagement Quality Reviews - ISQM 2

Objective

The objective of this project is enhancing the requirements and application material in relation to the firm’s engagement quality reviews (EQRs), including:

  • setting more robust criteria for firms to apply when determining which engagements should be subject to an EQR;
  • establishing the objective of an EQR;
  • clarifying the nature, timing and extent of the EQR; and
  • enhancing the requirements for the eligibility of the individuals who perform the review.

In doing so, consideration will also be given to maintaining the appropriate balance between the respective roles and responsibilities of the engagement quality reviewer and the engagement partner who retains overall responsibility for the engagement.

PROJECT CONTACT

TASK FORCE

Project Stages

Board Papers

September 2019 December 2019 March 2020 April 2020 June 2020

Board Minutes

September 2019 December 2019

CAG Papers

September 2019 March 2020

CAG Minutes

September 2019

Summary
MEETING HIGHLIGHTS - MARCH AND APRIL 2020

March

The Board discussed a draft of proposed ISQM 2. The IAASB supported the ISQM 2 Task Force’s proposed revisions on the scope of engagements subject to an engagement quality (EQ) review. The IAASB also reaffirmed its broad support for a mandatory cooling-off period to address objectivity for individuals moving into the role of EQ reviewer after serving as the engagement partner. 

April

The ISQM 2 Task Force considered the comments received during the March 2020 meeting and presented a revised draft to the IAASB via videoconference on April 1, 2020. The Board supported the ISQM 2 Task Force’s proposed revisions on the scope of engagements subject to an engagement quality (EQ) review. The ISQM 2 Task Force Chair also updated the Board about the discussions with the International Ethics Standards Board for Accountants (IESBA) Task Force Chair and staff regarding IESBA’s exposure draft on the EQ reviewer’s objectivity.

The ISQM 2 Task Force will present a full draft of the final standard for approval at the September 2020 IAASB meeting.

 

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