Naming an engagement quality reviewer
How a partner names an engagement quality reviewer in Achekam, who is eligible, and which steps on an audit that reviewer's clearance holds back.
By Achekam · · 4 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
An engagement quality review is only worth something if it finishes before the report goes out. The classic failure is not a careless reviewer. It is a signing partner under deadline pressure, a reviewer who has not yet seen the significant judgements, and an auditor's report that is dated and released anyway, with the review "completed" afterwards.
ISQM 2 exists to stop exactly that, and a system can help by refusing to let the report move until the reviewer has cleared it. This article explains how an engagement quality reviewer is named in Achekam, what that person's clearance holds back, and the parts of ISQM 1 and ISQM 2 that remain the firm's own work.
Which engagements need a reviewer: still the firm's policy
Under ISQM 1 the firm sets policies on which engagements require an engagement quality review: audits of listed entities, engagements where law or regulation requires one, and those the firm identifies as an appropriate response to its quality risks. ISQM 2 then deals with appointing an eligible reviewer and with how the review is performed and documented, as the IAASB's page on ISQM 2 describes.
The standards themselves come to firms in each country by their own route. In South Africa, IRBA regulates auditors and its auditing standards follow the IAASB's. Nigeria applies the ISAs as issued, with ISQM 1 and ISQM 2 from 15 December 2022. Kenya applies the ISAs as issued, with ISQM 1 and ISQM 2.
Achekam does not make that policy decision for you. For a South African firm, it does not require a reviewer for any engagement type: naming one is the firm's decision. Keep your list of engagements that need a review in your quality manual, and make naming the reviewer part of planning for every engagement on that list.
Who can be named, and by whom
A partner names the engagement quality reviewer on the engagement. The person named must be a partner or a senior manager who is not on the engagement team. Achekam enforces that combination of seniority and separation.
What it does not test is the rest of your eligibility criteria. ISQM 2 also expects the firm to consider objectivity more broadly, including any cooling-off before a former engagement partner can act as reviewer, and the competence and time the reviewer has for this particular client. Record those judgements in your own appointment note, alongside the name entered in Achekam.
What the reviewer's clearance holds back
The reviewer must clear the auditor's report before it can be issued. That is the central control, and it is stronger than most other approvals in the audit flow.
The engagement partner has some room elsewhere. When approving the auditor's report, the partner may approve with working papers still open by recording a reason. A named quality reviewer's clearance is different: it cannot be bypassed. The same holds at completion, where an uncleared quality review cannot be overridden.
| Step | What the engagement partner can do alone | What needs the quality reviewer |
|---|---|---|
| Working papers still open at report approval | Approve, recording a reason | The clearance still cannot be bypassed |
| Issuing the auditor's report | Nothing, until cleared | The reviewer's clearance |
| Completing the file | Nothing, while the review is uncleared | The reviewer's clearance |
| Unlocking a locked audit file | Nothing alone | A second partner or the quality reviewer |
The quality-review stage on working papers
Achekam's working papers move through preparation, manager review, partner review, an optional engagement quality review stage, completion and lock. The quality-review stage is optional because not every engagement has a reviewer. Where one is named, use it for the papers the reviewer must see under your methodology: significant risks, key judgements, the going concern assessment, materiality and the evaluation of misstatements.
Using the stage rather than e-mails has a practical benefit. The reviewer's work is visible on the file, at the paper it concerns, and the engagement team can see which papers are waiting for the reviewer instead of guessing.
After the report is issued
Once the auditor's report is issued, the engagement partner assembles and locks the audit file. From then on, changes can only be added as addenda, and unlocking needs a second partner or the quality reviewer. The reviewer is also one of the people who can download the archive built from the locked file, together with partners and managers.
That gives the reviewer a continuing role. If a matter arises after issue that requires the file to be reopened, the request can come to the reviewer, who already knows the engagement.
What the reviewer should look at outside the workflow
One gap deserves the reviewer's attention. Staff can take a technical consultation from question to conclusion and closure, and record a difference of opinion with each party's position, escalation and resolution. But an open consultation or difference of opinion does not stop the auditor's report from being approved or signed. A quality reviewer who checks the consultation register for the engagement before clearing the report closes that gap by hand. The registers are described in quality registers, consultations and disagreements.
A reviewer's checklist before clearing:
- Confirm the engagement is on the firm's list of engagements requiring review, and that the appointment note records eligibility.
- Read the papers routed to the quality-review stage and the significant judgements in them.
- Check there is no open consultation or difference of opinion on the engagement.
- Read the independence declarations relevant to the team, bearing in mind what Achekam records about independence today.
- Read the draft auditor's report against the conclusions in the file.
- Only then clear the report.
Make it part of planning
Add "name the engagement quality reviewer, or record why none is needed" to your planning checklist for every audit, and do it before fieldwork starts rather than in the week the report is due. A reviewer named late is a reviewer who can only read conclusions, not influence them.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
