The SMPC generally supports the new quality management approach using a risk management lens. However, the Committee also believes that the IAASB needs to consider the cost/benefit of the proposed changes in terms of anticipated quality increase from International Standard on Quality Management 1 (ISQM 1). The SMPC believes that making the standard less complex to apply would go a long way in addressing the practical issues many SMPs would otherwise face and, simultaneously, resolve many of the scalability issues. Specifically by:

The SMPC is concerned that the QM standards' complexity may eventually drive a compliance mindset, especially amongst smaller firms who become subject to proportionately greater documentation burdens to “explain/prove” their compliance. Therefore, it is important for the IAASB to ensure that the final suite of QM standards address this issue to foster an effective focus on the quality of the engagement each individual firm delivers, as opposed to compliance with complex standards.

Listen to IAASB member and Task Force Chair, Marek Grabowski, discuss the extended external reporting (EER) Consultation Paper that includes the first part of the draft guidance for practitioners applying International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information,&n