With a view to bringing a modern and holistic approach to quality, ISQM 1 has evolved how a firm addresses monitoring and remediation. This includes shifting the focus from inspections of completed engagements, to monitoring the system of quality management as a whole.
Key to enhanced monitoring and remediation is a proactive and iterative approach, with monitoring activities that are tailored to address factors such as how the system is designed, the nature and circumstances of the firm, and changes in the system. The new standards also include a new framework for evaluating findings and identifying deficiencies, and evaluating the severity and pervasiveness of deficiencies. The framework helps the firm to synthesize the information from its monitoring activities, so that the firm can identify deficiencies and their root cause, and take appropriate remedial actions
To build understanding of the new quality management standards, 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 third webinar in this series explores how the transition to ISQM 1 impacts firms’ monitoring and remediation processes. It explains:
- Overall, what has changed in monitoring and remediation and why these changes are important.
- Designing and performing monitoring activities, including:
- The factors driving the nature, timing and extent of the monitoring activities.
- How ISQM 1 has changed regarding requirements to inspect completed engagements.
- What is a finding and a deficiency, including the process for evaluating findings, identifying deficiencies, and evaluating the severity and pervasiveness of identified deficiencies. The webinar also explains expectations to investigate the root cause of identified deficiencies.
- Responding to identified deficiencies, including:
- Designing and implementing remedial actions to address identified deficiencies that are responsive to the root cause.
- Evaluating whether remedial actions are appropriately designed, and if not, taking appropriate action.
- Evaluating whether remedial actions that were implemented to address previous deficiencies were effective, and if not, taking appropriate action.
- Communication around the monitoring and remediation process, including with whom communication is required, and what may need to be communicated.
How important is it for you and your firm to view this webinar session? Over 900+ real-time participants joined us for this session and their feedback speaks for itself:
- Eighty-three percent (83%) noted that they now feel 'more confident' in applying the ISQM standards.
- Ninety percent (90%) believed that they better understood the implications for firms monitoring and remediation processes after having watched the webinar.
- Eighty-four percent (84%) noted that they believed they were better able to apply the ISQM standards to their firms' monitoring and remediation processes following the close of the webinar.
- Eighty-two percent (82%) believed they would be more likely to move forward in a timely manner (expediently) due to this webinar series
- 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 video below:
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