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

CAG Papers

September 2019

Summary
MEETING HIGHLIGHTS - DECEMBER 2019

The Board generally supported the ISQM 2 Task Force’s revised proposals on the scope of engagements subject to an engagement quality (EQ) review and on a mandatory cooling-off period of two-years, or longer if required by relevant ethical requirements, to address objectivity for individuals moving into the role of EQ reviewer after serving as the engagement partner.

The Board also generally supported proposals on other matters, including the EQ reviewer’s evaluation of the exercise of professional skepticism by the engagement team, and considerations for an EQ review of a group audit engagement.

The ISQM 2 Task Force will consider the comments received in preparing a revised full draft of proposed ISQM 2 for discussion at the March 2020 IAASB meeting.


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