Pre-Audit Report Reviews
Pre-audit report reviews are carried out at appropriate points in time during the engagement. The objective of this review is that the engagement quality reviewer performs an objective evaluation of the significant judgments made by the engagement team and the conclusions reached thereon.
This review is carried out in adherence to International Standard on Quality Management 2, Engagement Quality Reviews wherein the engagement quality reviewer evaluates, when applicable to the type of engagement, the exercise of professional scepticism by the engagement team. This objective evaluation of the significant judgments made by the engagement team and the conclusions reached thereon, are performed by the engagement quality reviewer and completed on or before the date of the engagement report.
Compass approach
- Read, and obtain an understanding of, information communicated by: (1) the engagement team regarding the nature and circumstances of the engagement and the entity; and (2) the firm related to the firm’s monitoring and remediation process, in particular identified deficiencies that may relate to, or affect, the areas involving significant judgments made by the engagement team.
- Discuss with the engagement partner and, if applicable, other members of the engagement team, significant matters and significant judgments made in planning, performing, and reporting on the engagement.
- Based on information obtained and discussions made above, review selected engagement documentation relating to the significant judgments made by the engagement team and evaluate: (1) the basis for making those significant judgments, including, when applicable to the type of engagement, the exercise of professional scepticism by the engagement team; (2) whether the engagement documentation supports the conclusions reached; and (3) whether the conclusions reached are appropriate.
- For audits of financial statements, the engagement quality reviewer is to evaluate the basis for the engagement partner’s determination that the engagement partner’s involvement has been sufficient and appropriate throughout the audit engagement such that the engagement partner has the basis for determining that the significant judgments made, and the conclusions reached are appropriate given the nature and circumstances of the engagement.
The engagement quality reviewer is to notify the firm in circumstances where there could be an impairment of the engagement quality reviewer’s eligibility to perform the engagement quality review and if there are unresolved concerns of the engagement quality reviewer.
When completing the engagement quality review, the reviewer notifies the Engagement Partner of the firm that the review is complete.
Mr Renzo Farrugia is approved by the Accountancy Board as an Approved Accountancy Board External Engagement Quality Assurance Reviewer.