What it is
An engagement quality review is an objective evaluation, completed before the report is released, of the significant judgments the engagement team made and the conclusions it reached on them. The memo is the record in the engagement file that the review happened, what it covered, what was raised and how it was resolved.
The template records why a review was required, the reviewer’s appointment and eligibility, the stages at which the reviewer looked at the work, the documents reviewed, each significant judgment evaluated with the reviewer’s conclusion, the matters raised with their resolution, and the reviewer’s completion statement. It also records the partner’s acknowledgment that the report was not released before completion.
When to use it
- Any audit the firm’s policies make subject to an EQ review.
- When the firm wants a standard format for the reviewer’s record across engagements.
- In preparing for peer review of the firm’s system of quality management.
What’s inside
- Engagement, reasons a review was required and reviewer appointment and eligibility
- Timeline of the review by stage
- Documents reviewed with references and dates
- Significant judgments evaluated and the reviewer’s conclusion on each
- Matters raised and resolved, completion statement and partner acknowledgment
Standard cited
This template follows SQMS No. 2 / AU-C 220. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 220 explained.
Questions
What is an engagement quality review?
An objective evaluation of the significant judgments made by the engagement team and the conclusions reached on them, performed by the engagement quality reviewer and completed before the engagement report is released.
What must the engagement partner do about an EQ review?
Under AU-C 220 as amended by SAS 146, the partner determines that a reviewer has been appointed, cooperates with the reviewer and tells the team to do so, discusses significant matters and judgments with the reviewer, and does not release the report until the review is complete.
When is the review not complete?
If the reviewer has told the partner of concerns about the significant judgments or whether the conclusions reached on them are appropriate, the review is not complete until those concerns are resolved.
Where does the reviewer’s documentation go?
In the engagement file. SQMS No. 2 deals with the reviewer’s responsibilities for performing and documenting the review. The memo gives a consistent format for it. Use the eligibility checklist for the appointment record.
Related templates
- Engagement Quality Review Checklist (SQMS 2)
- EQR Eligibility and Performance Checklist (SQMS No. 2)
- Audit Completion and Partner Review Memo
- SQMS No. 1 Annual Evaluation Checklist
Last updated 11/05/2026. All free templates.