Post-implementation analysis begins for PCAOB engagement quality review standard

By Ken Tysiac

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 effects of the standard, including:

  • Whether it has accomplished its purpose and increased the likelihood that engagement deficiencies will be detected before the audit report is issued.
  • Whether reviews under the standard provide a meaningful check on the engagement team’s work.
  • Whether users of financial statements believe that the implementation of AS 7 has affected the credibility of financial reporting.
  • The experiences of auditors, preparers, and audit committees with implementation of AS 7.
  • The initial and recurring costs and benefits associated with the implementation of AS 7.
  • Whether AS 7 could be refined or improved to better accomplish its purpose.

Ken Tysiac ( is a JofA editorial director.


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