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Updated peer review requirements

25 May 2023

The Clean Energy Regulator has released guidance on the requirements for auditors serving as peer reviewers on audit engagements.

In accordance with ASQM 2 Engagement Quality Reviews, where an auditor has served as a team leader for a Part 6 audit in relation to an audited body, a minimum 2 year cooling off period is required before the engagement partner can assume the role of peer reviewer for the same kind of Part 6 audit in relation to the same audited body.

In recurring engagements for an audited body, significant judgements made in prior periods may continue to affect the judgement of the engagement team in subsequent periods. This can then affect the ability of a peer reviewer to objectively evaluate significant judgements where they were previously involved in those judgements as team leader in a previous engagement. As such, it is important that safeguards are put in place to reduce the threats to objectivity, particularly the self-review threat.

This guidance follows the release of the two new quality control standards by the Australian and Assurance Standards Board (AUASB) on the 15 December 2022:

  • Auditing Standard ASQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements (ASQM 1)
  • Auditing Standard ASQM 2 Engagement Quality Reviews (ASQM 2).

For more information on the requirements under ASQM 1 and ASQM 2 refer to the AUASB website.

If you have any questions please contact the Clean Energy Regulator at CER-Audit@cer.gov.au.



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