EQ = Engagement Quality Review

EQR = Engagement Quality Reviewer

EQ Triggering Requirement

We have criteria for determining whether an EQ review should be performed, evaluate all engagements against the criteria, perform an EQ review for all engagements that meet the criteria, and complete the review before the report is released.

Any attest engagement that meets the criteria below should be subject to engagement quality review requirements:

• Engagements where review is required by law or regulation
• Engagements with public entities
• Engagements with entities with a high public profile, large number, and wide range of stakeholders.
• Engagements where the partner serves for longer than 5 years.
• Engagements with fees >$50,000
• Engagements with risk rating determined to be “HIGH”
• Engagements to express an opinion on the service organization’s description of controls, whether such controls were suitably designed and whether they had been placed in operation (SOC audits)
• Engagements to audit employee benefit plans (EBP audits)
• Engagements with recurring internal or external inspection findings
• Engagements with material restatements of comparative information
• Engagements to express an opinion on financial statements that reflect material acquisitions, merger, or disposition of business
• Engagements where the team is planning to re-audit prior period balances
• Engagements with known disagreements between the client and their predecessor auditor

The assessment of whether the engagement should be subjected to EQ should be made by the partner for all attest engagements. This assessment should be made prior to the engagement letter signature date.

EQ Triggered After the Engagement Inception

There are situations when EQ may not be required at the inception of the engagement, but we may subsequently conclude that EQ is required as a result of the discovery of existing or new facts and circumstances such as:

• Limitations on the scope of audit engagement imposed by the client
• Limitations on the scope of audit engagement outside of the client's control
• Differences in opinions between the engagement team members that the engagement partner cannot resolve
• Potential litigation action from the client or users of financial statements arise
• Significant changes in facts and circumstances that, if they happened and were known prior to the engagement acceptance date, would trigger EQ.

EQR Eligibility Criteria

The criteria for the appointment of EQR are being determined by the managing partner and currently include the following requirements that the person who serves as EQR should:

• Possess sufficient expertise and experience

• Has availability to perform engagement quality review

• Be independent of the client.

• Demonstrate the appropriate objectivity and due professional care.

• Has no responsibilities for any audit or non-audit engagements with the entity or its related parties.

• Has the appropriate authority (meaning that a reviewer should not be subject to any provisions that would require subordination to the engagement audit partner).

• Has no involvement in the client or engagement acceptance and continuation processes.

• Not have provided any consultations with results that are being used as audit evidence in the engagement.

If a party engaged is not employed by us, we should also: