ABSTRACT This study investigates how evolving regulatory and professional standards have shaped engagement quality review (EQR) partners' assessments of the review process, compared with an earlier study of review partners' assessments of the EQR process, and how these views differ from those of engagement partners. One hundred sixty‐seven audit partners recalled engagements in which they acted either as engagement or EQR partner and resolved difficult issues through discussion. Findings show a marked shift in EQR practice driven by heightened standards and regulatory scrutiny. Reviews now more frequently address complex matters, with sufficiency of audit evidence and internal controls as leading concerns. Valuation has overtaken income recognition as the most cited accounting issue, underscoring inspection‐driven priorities. Regulatory emphasis on critical audit matters and documentation quality is reflected in EQR partners' greater focus on these areas, alongside changes in their independence and composition. Perceptions between partners diverge. Engagement partners often see resolutions as leaning toward the EQR's stance and attach greater career risk to outcomes, whereas EQR partners view discussions as collegial and guided by standards and expertise. Overall, the EQR process has become more rigorous, independent, and consequential for audit quality and professional dynamics within firms.
Michael Favere‐Marchesi (Tue,) studied this question.