The Public Company Accounting Oversight Board has published a set of questions and answers from its staff to explain the documentation requirements behind the recently issued Engagement Quality Review standard.

The new auditing standard aims to toughen the requirements for concurring reviews of the work of audit teams. Auditing Standard No. 7 provides a framework for the engagement quality reviewer to objectively evaluate the significant judgments made and related conclusions reached by the engagement team in forming an overall conclusion about the engagement.

The Sarbanes-Oxley Act of 2002 directs the PCAOB, among other things, to set standards for public company audits, including a requirement for each registered public accounting firm to "provide a concurring or second partner review and approval of [each] audit report (and other related information), and concurring approval in its issuance...." The new standards are intended to answer that mandate.


The U.S. Securities and Exchange Commission approved AS No. 7 last month (see SEC Approves Engagement Quality Review Standard). In its order approving the EQR standard, the SEC encouraged the PCAOB to provide further implementation guidance on the documentation requirements of the standard. The staff Q&A document provides implementation guidance. However, the PCAOB cautioned that the statements contained in the staff questions and answers are not rules of the board, nor have they been approved by the board.

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