The International Standard on Quality Management (ISQM) 1 requires firms to record quality objectives in six key areas. these are:
- Governance and leadership;
- Relevant ethical requirements;
- Acceptance and continuance of client relationships and specific engagements;
- Engagement performance;
- Resources; and
- Information and communication.
This week and in subsequent weeks, we will look at each of these primary objectives and explore some of their main requirements. Meantime our ISQM TOOLKIT has been published to guide you on the way.
The first of these areas is Governance and leadership. This is of paramount importance to quality management because it drives how the firm is perceived by its leadership, staff, audit clients and ultimately the public. Governance and leadership principles serve as the framework for how the firm’s decisions are made.
The standard has new and enhanced requirements regarding the firm’s commitment to quality through its culture.
The requirements now also focus on:
- The firm’s public interest role;
- The importance of professional ethics, values and attitudes;
- The responsibility of all personnel for quality relating to the performance of engagements or activities within the Statement of Quality Management (SOQM), and their expected behaviour; and
- Quality in the context of the firm’s strategic decisions and actions (e.g. will we expand the Tax Department and offer tax planning services to our private company audit clients), including the firm’s financial and operational priorities.
There are new requirements that:
- Address leadership’s behaviour and commitment to quality, and their accountability for quality;
- Address the organizational structure of the firm and the firm’s assignment of roles, responsibilities and authority; and
- address resource needs, and resource planning, allocation and assignment, which also include financial resources for matters like up to date software and training.
It’s impossible to cover everything in this brief blog. For more assistance please see our new ISQM TOOLKIT or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard, please call or e-mail John McCarthy FCA or e-mail him at email@example.com
Publications and AML webinar
- The ISQM TOOLKIT 2022 is available to purchase here.
- See our latest Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
- Also we have an updated AML webinar (March 2022) available here, which accompanies the AML Manual. It explains the current legal AML reporting position for accountancy firms and includes a quiz. Upon completion, you receive a CPD Certificate of attendance in your inbox.
- To ensure your letters of engagement and similar templates are up to date visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.
Tags: ISQM TOOLKIT, IAASA, International Standard on Quality Management (ISQM) 1, Root Cause Analysis, Anti Money Laundering Policies Controls & Procedures Manual, AML Training webinar.