Engagement Quality Control ReviewEngagement Quality Control Review

Engagement Quality Control Review

Completion of the Engagement Quality Control Review before Dating of the Auditor’s Report (Ref: Para. 19(c))

1. ASA 700 requires the auditor’s report to be dated no earlier than the date on which the auditor has obtained sufficient appropriate evidence on which to base the auditor’s opinion on the financial report.[11] In the case of an audit of a financial report of a listed entity or when an engagement meets the criteria for an engagement quality control review, such a review assists the auditor in determining whether sufficient appropriate evidence has been obtained.
2. Conducting the engagement quality control review in a timely manner at appropriate stages during the engagement allows significant matters to be promptly resolved to the engagement quality control reviewer’s satisfaction on or before the date of the auditor’s report.
3. Completion of the engagement quality control review means the completion by the engagement quality control reviewer of the requirements in paragraphs 20‑Aus 21.1, and where applicable, compliance with paragraph 22. Documentation of the engagement quality control review may be completed after the date of the auditor’s report as part of the assembly of the final audit file. ASA 230 establishes requirements and provides guidance in this regard.[12]

Nature, Extent and Timing of Engagement Quality Control Review (Ref: Para. 20)

1. Remaining alert for changes in circumstances allows the engagement partner to identify situations in which an engagement quality control review is necessary, even though at the start of the engagement, such a review was not required.
2. The extent of the engagement quality control review may depend, among other things, on the complexity of the audit engagement, whether the entity is a listed entity, and the risk that the auditor’s report might not be appropriate in the circumstances. The performance of an engagement quality control review does not reduce the responsibilities of the engagement partner for the audit engagement and its performance.
3. When ASA 701[13] applies, the conclusions reached by the engagement team in formulating the auditor’s report include determining:

• The key audit matters to be included in the auditor’s report;
• The key audit matters that will not be communicated in the auditor’s report in accordance with paragraph 14 of ASA 701, if any; and
• If applicable, depending on the facts and circumstances of the entity and the audit, that there are no key audit matters to communicate in the auditor’s report.

In addition, the review of the proposed auditor’s report in accordance with paragraph 20(b) includes consideration of the proposed wording to be included in the Key Audit Matters section.