What it is
SQMS No. 2 sets who may perform an engagement quality review, what they must do and when. The firm decides which engagements need one using criteria in its quality management system. Many small firms do not have a second partner who is eligible, so the criteria and the reviewer pool need to be planned before busy season.
This checklist goes beyond a general review checklist. It records the criteria, the reviewer’s eligibility and independence, what was reviewed, timing against the report date and the file. SQMS No. 2 applies to audits or reviews of financial statements for periods beginning on or after December 15, 2025, and to other engagements in the firm’s accounting and auditing practice beginning on or after that date. Not an AICPA product.
When to use it
- When deciding whether an engagement needs an EQR.
- When appointing a reviewer, including an outside reviewer.
- To document the review and its timing before release.
What’s inside
- EQR criteria and decision record
- Appointment, competence, independence and cooling-off
- Performance steps: judgments, financial statements, report, documentation
- Timing against the report date
- Documentation and monitoring feed
Standard cited
This template follows SQMS No. 2. 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.
Questions
Can the engagement partner choose the reviewer?
The firm assigns responsibility for appointing reviewers to an individual or individuals with the competence, capabilities and appropriate authority to do so. SQMS No. 2 notes that in a smaller firm or sole practitioner it may not be practicable for someone other than an engagement team member to appoint the reviewer.
Can an outside CPA be the reviewer?
Yes. SQMS No. 2 says a smaller firm or sole practitioner with no eligible partner or other individual may contract with an individual external to the firm, who must meet the eligibility criteria. The service provider provisions of SQMS No. 1 apply.
Must the review finish before the report is released?
Yes. The engagement partner may not release the report until the reviewer notifies the partner that the review is complete. If the review finishes after the report date and more work is needed, the report date may have to change.
Related templates
- Engagement Quality Review Checklist (SQMS 2)
- Engagement Partner Review Checklist (Audit)
- Audit Completion and File Review Checklist (AU-C 230 / AU-C 700)
- SQMS No. 1 Monitoring and Remediation Checklist
Last updated 11/05/2026. All free templates.