Quality Control Document and Engagement Quality Control Review (EQCR)

All firms are required to include in their quality control document the criteria established for an engagement quality control review of an engagement. Firms must be careful in developing EQCR criteria since some firms will need to hire an independent contractor to perform this service. Firms are allowed to set criteria so that it is probable the conditions will never be met. For example, for firms that perform only reviews and compilations, the criteria could be that they will require an EQCR if they accept an audit engagement. For firms with audit practices, the criteria could be that an EQCR is required if the firm performs an ERISA audit or OMB Circular A-133 audit. Other criteria might involve application of new standards, complex issues, size of client (in terms of amount of revenues), size of engagement (in terms of number of hours) or entry into a new industry.