In the first review of its kind, the PCAOB Center for Economic Analysis is requesting public comment on a PCAOB standard that requires an engagement quality reviewer to evaluate the significant judgments made by the engagement team.
The analysis of Auditing Standard (AS) No. 7, Engagement Quality Review, represents the start of a post-implementation review program whose goal is to evaluate whether adopted rules and standards are accomplishing their intended purposes. The program also seeks to identify unintended consequences and gauge the overall effects of PCAOB rules and standards.
AS 7 was adopted in 2009, replacing an auditing standard that had been in place since the 1970s. The PCAOB expected the standard to provide a meaningful check on the work performed by engagement teams and increase the likelihood that registered firms would identify significant engagement deficiencies before issuing an audit report.
The PCAOB Center for Economic Analysis is seeking comment by July 5 on the standard's effects.