[The following paragraph of AS 1220, amended to read as follows, will be effective for audits of fiscal years ending on or after December 15, 2017. See PCAOB Release No. 2017-001.PDF The current standard can be found here.]

.10     In an audit, the engagement quality reviewer should:

  1. Evaluate the significant judgments that relate to engagement planning, including -
    - The consideration of the firm's recent engagement experience with the company and risks identified in connection with the firm's client acceptance and retention process,
    - The consideration of the company's business, recent significant activities, and related financial reporting issues and risks, and
    - The judgments made about materiality and the effect of those judgments on the engagement strategy.
  2. Evaluate the engagement team's assessment of, and audit responses to -
    - Significant risks identified by the engagement team, including fraud risks, and
    - Other significant risks identified by the engagement quality reviewer through performance of the procedures required by this standard.

Note: A significant risk is a risk of material misstatement that requires special audit consideration.

  1. Evaluate the significant judgments made about (1) the materiality and disposition of corrected and uncorrected identified misstatements and (2) the severity and disposition of identified control deficiencies.
  2. Review the engagement team's evaluation of the firm's independence in relation to the engagement.
  3. Review the engagement completion document4 and confirm with the engagement partner that there are no significant unresolved matters.
  4. Review the financial statements, management's report on internal control, and the related engagement report.
  5. Read other information in documents containing the financial statements to be filed with the Securities and Exchange Commission ("SEC")and evaluate whether the engagement team has taken appropriate action with respect to any material inconsistencies with the financial statements or material misstatements of fact of which the engagement quality reviewer is aware.
  6. Based on the procedures required by this standard, evaluate whether appropriate consultations have taken place on difficult or contentious matters. Review the documentation, including conclusions, of such consultations.
  7. Based on the procedures required by this standard, evaluate whether appropriate matters have been communicated, or identified for communication, to the audit committee, management, and other parties, such as regulatory bodies.
  8. Based on the procedures required by this standard, evaluate the engagement team's determination, communication, and documentation of critical audit matters in accordance with AS 3101, The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion.

   Paragraph .13 of AS 1215, Audit Documentation, requires the auditor to identify all significant findings or issues in an engagement completion document.

5      See paragraphs .04-.06 of AS 2710, Other Information in Documents Containing Audited Financial Statements; AS 4101, Responsibilities Regarding Filings Under Federal Securities Statutes.

[Effective pursuant to SEC Release No. 34-81916, File No. PCAOB-2017-01 (October 23, 2017)]