Supporting International Standards
Are Your Firm and Its Engagements Partners Ready for ISQM 1? – IAASB & IFAC Second Quality Management Webinar Highlights Resources and Expectations for Firms and Engagement Partners
Gabriella Kusz MBA, MPP, CPA, CGMA, Natalie Klonaridis | October 26, 2021
Our world evolved during the COVID19 pandemic to recognize the greater need to design, manage, and maintain not only our human resources, but also our technological, intellectual and financial resources. With a view to bringing a modern and holistic approach to quality, the Quality Management standards expand the scope of ‘resources’ beyond the traditional view of the human resources to better recognize the changing environment in which firms operate.
Of particular focus, is the inclusion of technological and intellectual resources in the quality management standards. In our changing world, engagement teams depend very heavily on technology and intellectual resources. Under ISQM 1, the focus centers on the need to obtain, develop and assign resources in a manner that enables the system of quality management to operate, and engagement teams to perform engagements effectively. To ensure that these resources keep in step with the changing world around them, ISQM 1 also outlines the need for resources to be maintained and used appropriately.
Important to note, when referring to technological resources, ISQM 1 refers to technology needed to operate the system of quality management. Examples of technological resources that fall within the scope of the quality management standards include technologies:
(a) Used to design, implement or operate a system of quality management, such as IT applications for archiving files, IT applications to manage staff or IT applications used to track independence.
(b) Used by engagement teams to perform engagements, such as IT applications for managing the audit file and working papers, and IT applications used to perform data analytics; and
(c) That are essential to enabling effective operation of IT applications, such as operating systems, databases, and supporting hardware.
Some technology used by the firm may be used for another purpose and therefore would not be within the scope of the standard.
Under ISQM 1, intellectual resources may include the methodology, guides, checklists, or information sources used by the firm to enable the operation of the system of quality management. ISQM 1 particularly emphasizes that intellectual resources need to be consistent with professional standards and jurisdictional legal and regulatory requirements.
The IAASB in collaboration with IFAC held four global webinars to enhance knowledge and understanding of ISQM 1:
- Webinar One: All You Need to Know about the Firm’s Risk Assessment Process;
- Webinar Two: Resources: Expectations for Firms and Engagement Partners;
- Webinar Three: What’s New for Firms’ Monitoring and Remediation Processes;
- Webinar Four: Bringing it All Together: Exploring all the Components of a Quality Management System.
This second webinar took a deep dive into resources, explaining what are resources in ISQM 1 and why they are so important. It explored:
- For human resources:
- Who are human resources, and members of the engagement team.
- How addressing internal personnel and external human resources (i.e., services providers) might differ within the firm’s quality management system.
- The interrelationship between ISQM 1 and ISA 220 (Revised), and the respective responsibilities of the firm and the engagement partner for human resources.
- What are technological and intellectual resources?
- Firms’ responsibilities when using service providers who provide a resource to the firm.
How important is it for you and your firm to view this webinar session? Roughly 1,500 real-time participants joined us for this session and their feedback speaks for itself:
- Ninety-one percent (91%) of webinar participants felt that the information and content presented was very valuable to their work.
- Ninety-one percent (91%) believed that participating in this webinar put them in a better position to understand the resource expectations for firms and partners.
- Eighty-one percent (81%) believed that participating in this webinar positioned them to move forward in a timely manner in implementing the ISQM 1 standards.
- Most notably, eighty-four percent (84%) of webinar respondents believe they are more likely to apply the standards correctly in practice having attended this webinar.
To view the recording of this event, please click on the below link to visit the IAASB YouTube Channel and access this event’s video: https://youtu.be/-PN6PzLPSNs
To learn more about the IAASB’s four global quality webinars and to view recordings and obtain presentation materials, please visit: https://www.iaasb.org/publications/quality-management-webinar-series
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