SQMS No. 2, Engagement Quality Reviews, sets out requirements and guidance for firms to conduct an engagement quality (EQ) review. The standard also addresses the qualifications, eligibility, responsibilities, and appointment of an EQ reviewer. The predecessor standard, SQCS No. 8, combined quality control policies with the engagement quality control review. SQMS No. 2 was issued separately to highlight the importance of the EQ review within a firm’s system of quality management. SQMS No. 2 formalizes and strengthens the review process through clarified guidance and enhanced documentation requirements. It also distinguishes the responsibilities of the firm from those of the EQR reviewer, ensuring greater accountability and transparency.
Learning Objectives
- Recall the requirements of SQMS No. 1 and SQMS No. 2 related to engagement quality reviews.
- Recall the purpose for an engagement quality review and how the review enhances firm quality.
- Identify considerations for sole practitioners.
Major Topics
- Overview of engagement quality reviews and the firm’s responsibilities
- Requirements for engagement quality reviews and appointing reviewers contained in SQMS No. 1
- Timing of engagement quality reviews
- Performing an engagement quality review
- Considerations for sole practitioners
