"We're certainly very aware of the of the sort of challenge Ulster will provide and recognise the quality they have in their squad," said McGahan, whose side claimed six straight wins in the Heineken Cup pool stages.
"To come out of the group they were in was one thing, but to produce the performances they did - especially that win over Leicester Tigers at Ravenhill - shows exactly what a good side they are.
"I thought Ulster were absolutely sensational that day. One of the best performances we've seen in the campaign this season.
"And they backed that up with their performance at the weekend in Clermont. It indicates they are comfortable on the road and won't be at all fazed by having to travel for the quarters.
"But that's some time off. There's internationals to be played and RaboDirect PRO12 matches, so we'll see how players come through that phase of the season before turning our attention back to Heineken Cup."
Like McGahan, Munster's talismanic skipper O'Connell has also been impressed by the Ulster side.
"They were outstanding against Leicester, and although I haven't seen their game against Clermont, to come away with a point, to get out of a group like that, says it all.
"They've a lot of quality players. A lot of players showing really good form. So it's going to be a really tough game."