Sir Who is engagement quality control reviewer And what are his responsibilty

1 answer

Ravi Staff August 15, 2018

In Simple Terms, Once work is done by Audit Team and Reviewed by Partner, Non Team Member CA is called to have overview of the work done, to ensure quality is maintained, kyunki khudki galti khud ko nahi samjhti 🙂
Technical Definition
Engagement quality control reviewer – a partner, other person in the firm, suitably qualified external person, or a team made up of such individuals, with sufficient and appropriate experience and authority to objectively evaluate, before the report is issued, the significant judgments the engagement team made and the conclusions they reached in formulating the report. However, in case the review is done by a team of individuals, such team should be headed by a member of the Institute.

  • Responsibility of Engagement Partner for EQCR

For audits of financial statements of listed entities, and those other audit engagements, if any, for which the firm has determined that an engagement quality control review is required. (E.g. suppose they have decided all clients having turnover more than 100 cores EQCR is compulsory), the engagement partner shall:

  1. Determine that an engagement quality control reviewer has been appointed;
  2. Discuss significant matters arising during the audit engagement, including those identified during the engagement quality control review, with the engagement quality control reviewer; and
  3. Not date the auditor’s report until the completion of the engagement quality control review.

 

  • Responsibility of Reviewer for EQCR

The engagement quality control reviewer shall perform an objective evaluation of the significant judgments made by the engagement team, and the conclusions reached in formulating the auditor’s report. This evaluation shall involve:
 

  1. Discussion of significant matters with the engagement partner; (E.g. Significant Risk / Significant Difficulty / Material Misstatements)
  2. Review of the financial statements and the proposed auditor’s report; (E.g. For compliance of Sch III)
  3. Review of selected audit documentation relating to the significant judgments the engagement team made and the conclusions it reached; and (E.g. for compliance of SA 700 series & Sec 143)
  4. Evaluation of the conclusions reached in formulating the auditor’s report and consideration of whether the proposed auditor’s report is appropriate. (E.g. whether qualified opinion was appropriate or adverse was required etc.)

 

  • Extra Requirements in Case of Listed Companies

For audits of financial statements of listed entities, the engagement quality control reviewer, on performing an engagement quality control review, shall also consider the following:

  1. The engagement team’s evaluation of the firm’s independence in relation to the audit engagement;
  2. Whether appropriate consultation has taken place on matters involving differences of opinion or other difficult or contentious matters, and the conclusions arising from those consultations; and
  3. Whether audit documentation selected for review reflects the work performed in relation to the significant judgments made and supports the conclusions reached. (Impairment Testing / Goodwill Valuation etc.)

1.     HOW TO MANAGE DIFFERENCE OF OPINION?
 
 

(He documents his work and at the end he states, “Not aware about unresolved issues”)

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