What is an Engagement Quality Review (EQR/EQCR), and when is it required?
A core Audit & Assurance interview question — asked in analyst and associate interviews across IB, PE, and the Big 4.
THE SHORT ANSWER
An Engagement Quality Review is an objective evaluation of the significant judgements made by the engagement team and the conclusions reached, performed by a qualified reviewer (the EQ reviewer) who is not part of the engagement team, before the report is issued. Under the quality-management standards (ISQM 2), the firm must require an EQR for audits of listed entities and for other engagements where the firm determines it's warranted by risk (e.g., high public interest, significant risks, or regulatory requirement). The reviewer evaluates the team's significant judgements — materiality, significant risks and responses, areas of high estimation/subjectivity, the appropriateness of the opinion, and significant matters and consultations — and the report can't be dated/issued until the EQR is complete. It's a key safeguard against engagement-level quality failures: an independent, experienced second look at exactly the judgemental areas where audits go wrong.
WHAT INTERVIEWERS LISTEN FOR
- ✓Objective review of significant judgements by a non-team qualified reviewer
- ✓Required for listed entities + risk-warranted engagements (ISQM 2)
- ✓Covers materiality, significant risks, estimates, the opinion, consultations
- ✓Report can't be issued until EQR complete
COMMON MISTAKES
- ✗Issuing the report before EQR completion
- ✗Reviewer being part of the engagement team
- ✗Not knowing it's mandatory for listed entities
Reading isn't the same as answering under pressure.
Interviewers don't hand you the model answer — you deliver yours on a clock. Practice this and 1,000+ questions with AI feedback on every answer.
RELATED QUESTIONS