1. The terms engagement quality review and concurring partner review are synonymous.
2. An engagement quality review is required for publicly traded companies, so engagement quality reviews for privately held company audits rarely happen.
3. The auditor is required to communicate certain issues with the audit committee; this communication is important because the audit committee serves as an independent subcommittee of the board of directors, and the audit committee can also assist the auditor should a disagreement occur between the auditor and management.
4. One of the issues that the auditor is required to communicate to the audit committee is the competence, training, and industry specialization of each of the highest ranking members of the engagement team (the partner, manager, and audit senior).
5. The management representation letter and the management letter are both required for the audits of publicly traded companies.
6. The management letter helps to provide management comfort that the auditor has done a quality job and that the auditor knows and understands the client's business.
7. Existing clients for which the audit firm provided services in the preceding period are evaluated by the audit firm and by the individual engagement partner at the completion of the audit to determine whether the audit firm should continue to provide services again in the next period; the process by which this evaluation occurs is called the client continuance decision.
8. Audit firms may discontinue serving a client because the client does not fit the profile or growth strategy of the audit firm.
9. KPMG has audited General Electric Company for over 100 years.
10. Audit firm rotation is relatively common across the world, whereas audit partner rotation is less common and is not required for audits of publicly traded companies in the U.S.

  • CreatedSeptember 22, 2014
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