Consistent quality in the performance of an audit is one of the major concerns of all audit firms. However, internal inspections by audit firms themselves, along with external inspections by peer review teams and the PCAOB, point out that although effective audit policies and procedures are generally in place, they are sometimes not consistently performed. The result is that audit quality may sometimes be compromised, yet audit firm management is unaware of which particular audits are of low quality.
a. What audit documentation should engagement quality review partners retain to provide evidence that they have properly evaluated the consistent quality of the audit work performed?
b. Assume that an auditor concludes that all the assumptions regarding warranties are appropriate. What documentation would an engagement quality review partner expect to see to support such a conclusion?