Document ID: chunk:federal_register_of_legislation:F2020C00630:reg:25:p25
Version: federal_register_of_legislation:F2020C00630
Segment Type: reg
Provision Reference: reg 25 (pt 25/31)
Character Range: 80396–83531

within the firm or a suitably qualified external person may be appointed to take on the role of either the engagement quality control reviewer or the person to be consulted on the engagement.

Objectivity of the Engagement Quality Control Reviewer (Ref: Para. 40)

A49.         The firm is required to establish policies and procedures designed to maintain objectivity of the engagement quality control reviewer.  Accordingly, such policies and procedures provide that the engagement quality control reviewer:

           * Where practicable, is not selected by the engagement partner;

           * Does not otherwise participate in the engagement during the period of review;

           * Does not make decisions for the engagement team; and

           * Is not subject to other considerations that would threaten the reviewer's objectivity.

Considerations specific to smaller firms

A50.         It may not be practicable, in the case of firms with few partners, for the engagement partner not to be involved in selecting the engagement quality control reviewer.  Suitably qualified external persons may be contracted where sole practitioners or small firms identify engagements requiring engagement quality control reviews.  Alternatively, some sole practitioners or small firms may wish to use other firms to facilitate engagement quality control reviews.  Where the firm contracts suitably qualified external persons, the requirements in paragraphs 39‑41 and guidance in paragraphs A47‑A48 apply.

Considerations specific to public sector audit organisations

A51.         In the public sector, a statutorily appointed auditor (for example, an Auditor‑General, or other suitably qualified person appointed on behalf of the Auditor‑General) may act in a role equivalent to that of engagement partner with overall responsibility for public sector audits.  In such circumstances, where applicable, the selection of the engagement quality control reviewer includes consideration of the need for independence from the audited entity and the ability of the engagement quality control reviewer to provide an objective evaluation.

Differences of Opinion (Ref: Para. 43)

A52.         Effective procedures encourage identification of differences of opinion at an early stage, provide clear guidelines as to the successive steps to be taken thereafter, and require documentation regarding the resolution of the differences and the implementation of the conclusions reached.

A53.         Procedures to resolve such differences may include consulting with another practitioner or firm, or a professional[*] or regulatory body.

Engagement Documentation

Completion of the Assembly of Final Engagement Files (Ref: Para. 45)

A54.         Law or regulation may prescribe the time limits by which the assembly of final engagement files for specific types of engagement is to be completed.  Where no such time limits are prescribed in law or regulation, paragraph 45 requires the firm to establish time limits that reflect the need to complete the assembly of final engagement files on a timely basis.  In the case of an audit, for example,