Engagement Quality Control Review - ISQC 2
The objective of this project is enhancing the requirements and application material in relation to the firm’s EQC reviews, including
- setting more robust criteria for firms to apply when determining which engagements should be subject to an EQC review,
- establishing the objective of an EQC review,
- clarifying the nature, timing and extent of the EQC review 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 EQC reviewer and the engagement partner who retains overall responsibility for the engagement.
The IAASB commenced its initial information gathering on the topic of quality control in June 2014 with a Working Group being formed in October 2014. The issues identified and discussed at the IAASB meetings are part of the Invitation to Comment on Enhancing Audit Quality in the Public Interest which was issued in December 2015. The Working Group will use the comments received on the Invitation to Comment as a basis for the project proposal which is scheduled to be discussed in December 2016.**
** Together with the ISA 600-Group Audits and Professional Skepticism project, this project is part of the Audit Quality Enhancements Coordination Group (AQECG). The AQECG intends to coordinate the various inputs to the invitation to comment developed at the individual working group level, and take a holistic approach as to how the matters are presented in one invitation to comment.
MEETING HIGHLIGHTS - SEPTEMBER 2017
Engagement Quality Control (EQC) Reviews
The Board discussed the QCTF’s recommendations in relation to EQC reviews that would be incorporated in ISQC 1 and the proposed new standard, ISQC 2. The Board confirmed that the purpose of the EQC review is to evaluate the significant judgments made by the engagement team. In addition to various recommendations to further enhance and clarify the various requirements and application material, the Board encouraged the QCTF to improve the robustness of the requirement relating to the scope of the engagements subject to EQC review.
MEETING HIGHLIGHTS - JUNE 2017
The Board discussed the appropriate location of the requirements and application material in relation to engagement quality control (EQC) reviews and agreed that a separate standard addressing EQC reviews should be developed.