Consistent quality in the performance of an audit is one of the major concerns of all public accounting firms. However, internal inspections by audit firms themselves, along with external inspections by peer review teams and the PCAOB, point out that although good 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 inferior quality.

Required

a. How would an engagement quality review partner (concurring partner) help to assure the consistent execution of audit firm policies and procedures?

b. 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?

c. What implications does the situation above have in terms of providing motivation for documenting the auditor reasoning process in the work-papers? For example, assume that an auditor concludes that all the assumptions regarding warranties are appropriate. What documentation would an engagement quality reviewing partner expect to see to support those conclusions?

d. Describe the different professional requirements for the conduct of engagement quality review, contrasting the standards governing public versus private entities using U.S. auditing standards, and those of entities reporting under international standards?