In late 2020, the International Auditing and Assurance Standards Board (IAASB) issued three new and revised quality management standards. The standards strengthen and modernize how a firm of any size or level of complexity approaches quality management.
- They address the evolving and increasingly complex audit ecosystem, including growing stakeholder expectations and a need for quality management systems that are proactive and adaptable.
- They mark an evolution from a traditional, more linear approach for quality control to an integrated quality management approach.
- They recognize the importance of firm governance and leadership, with quality embedded in the fabric of the firm’s culture, strategic and operational decisions, and leadership’s actions and behavior.
The standards also drive more robust and effective monitoring and remediation. At the engagement level, they increase the responsibility of engagement partners for managing and achieving audit quality. And they bolster who can perform engagement quality reviews and how the reviews are performed.
In order to support implementation and help small- and medium-sized practices (SMPs) understand, navigate and apply the revised standards, IFAC in collaboration with the Forum of Firms held two video panel discussions. These focus on providing an overview of International Standard on Quality Management 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements, how firms are planning its implementation, and sharing practical examples, tips and suggested good practices. These videos are available in English; translated transcripts are also available in Spanish and French.
- ISQM 1: Getting Ready for the New Risk-Based Approach – a discussion of the standard and the shift in mindset needed to apply the new risk-based approach.
- ISQM 1: Early Lessons Learned and Next Steps - a discussion on how to get started on implementation and tips and best practices.