Engagement Quality Reviews: A Comparison of Audit Firm Practices

Engagement quality (concurring partner) review is an important part of the audit review process. It is one quality control mechanism used by public accounting firms to monitor the quality of audit engagements. The engagement quality reviewer serves as an evaluator of the performance of the engagement partner and engagement team. Concerns about the effectiveness of existing firm concurring partner review practices have led to increased partner sanctions imposed by the Securities and Exchange Commission (SEC). In addition, Section 103 of the Sarbanes-Oxley Act of 2002 directs the Public Company Accounting Oversight Board (PCAOB) to develop an auditing standard on engagement quality review. This practice note reports on an analysis of six major firms' written guidance and practice aids for engagement quality review. Our comparison of the firms' guidance shows some differences in the assignment of engagement quality reviewer, the participation of the engagement quality reviewer in audit planning, the extensiveness of practice aids, and the involvement of engagement quality reviewer during the course of audit engagements. Lastly, we identify a number of research questions and practice implications.