Engagement Quality Review Checklist

Client independence verified and documented

No conflicts of interest identified

Audit committee communication completed

Engagement letter signed by both parties

Materiality calculated and documented ($500K)

Performance materiality set at 75% of materiality

Risk assessment completed for all assertion categories

Fraud risk assessment documented

Significant account/assertion procedures mapped

Controls testing performed on revenue & purchases cycles

70+ substantive items tested (revenue, inventory, receivables)

All exceptions documented with audit implications

Sufficient competent evidence obtained for all assertions

Bank confirmations received and reconciled

COSO framework components evaluated

Control deficiency identified & documented (purchases >$50K)

No material weaknesses identified

Management's remediation plan reviewed and assessed

Preliminary analytical review performed (4 flags identified)

Revenue growth 42% YoY investigated and explained

A/R DSO 80 days vs 35-day industry average explained

Gross margin compression from 18% to 9% analyzed

Financial statements compared to trial balance

Subsequent events procedure performed through 1/31/2025

Management representations letter obtained

2 Critical Audit Matters identified and documented

Draft audit report prepared (unqualified opinion)

File documentation complete and indexed

All audit adjustments reviewed and approved

Concurring partner review scheduled for 2/7/2025

Partner sign-off on audit conclusion