[The following paragraphs are effective on December 15, 2025. See PCAOB Release No. 2024-005. View the standard effective before December 15, 2025 here.]

Responding to Engagement Deficiencies After the Issuance of a Review Report

21.       After the issuance of the review report, the auditor may identify information that indicates the existence of an engagement deficiency.14 When the auditor has determined that an engagement deficiency exists, the auditor should take action to address the deficiency unless it is probable15 that the review report is not being relied upon.

Note: The auditor must treat as relied upon any review report that is included (either directly or through incorporation by reference) in a broker’s or dealer’s most recent filing on an SEC form that requires inclusion of such a review report. 

22.       For engagement deficiencies where the auditor did not obtain appropriate evidence that is sufficient to support the auditor’s conclusion:

  1. The auditor should perform procedures to obtain additional evidence, to the extent necessary, such that the review results is supported by appropriate evidence that is sufficient; or
  2. If the auditor is not able to obtain sufficient appropriate evidence to support its opinion, the auditor should take action to prevent future reliance on the report.

23.       For other engagement deficiencies, the auditor should take action to address the deficiency, taking into account the nature and severity of the deficiency.

Note: As appropriate, actions a firm may take include preventive or corrective actions, or a combination, such as actions: (1) to address engagement deficiencies on completed engagements; and (2) to deter future engagement deficiencies.

24.       The auditor should comply with:

  1. Paragraph .16 of AS 1215, Audit Documentation, when documenting its response to engagement deficiencies within the working papers; and
  2. QC 1000.82c when documenting the actions taken to address engagement deficiencies as part of the monitoring and remediation process of its QC system.

14 "Engagement deficiency" is defined in QC 1000, A Firm’s System of Quality Control, Appendix A—Definitions. See paragraph .67 of QC 1000 on determining when an engagement deficiency exists.

15 The term “probable” has the same meaning as used in the FASB Accounting Standards Codification, Contingencies Topic, paragraph 450-20-25-1.