Proactive approach to quality management with ISQM 1
Proactive approach to quality management with ISQM 1
In September 2020, the International Auditing and Assurance Standards Board (IAASB) issued a new set of Quality Management Standards which includes ISQM 1, ISQM 2 and the ISA 220 (Revised). The International standard of Quality Management (ISQM) 1 applies to all firms performing audits or reviews of financial statements or other Assurance or related services engagements. This implies that the non-audit functions and services like Advisory, Consulting, Risk management, Compliance, and other assurance engagements will also come under the umbrella of quality management.
This presents an opportunity for firms to revisit their quality management systems with the goal of identifying their quality objectives, assessing the quality risks and designing and implementing responses that best address those risks.
Firms are required to have systems of quality management designed and
implemented in accordance with ISQM 1 by 15 December 2022. The System of
Quality Management (SoQM) addresses the following components:
Additionally, it also addresses the requirements for the following:
- Network Requirements or Network Services
- Evaluating the System of Quality Management Documentation
Predominantly as an Audit firm we are aware of the risks associated with an audit engagement and going forward the Firm shall train our staff members from Advisory and Consulting divisions about quality management and its significance and benefits for the staff as well as clients and their stakeholders. There will be an added emphasis on the annual assessment of the SOQM and implementing the required responses to address quality risks and meet the objective of quality management.
The important steps are towards enhancing the quality include reviewing and discussing the new standard, identifying key risks currently faced, redefining the quality management priorities, and ensuring that the system is scalable and flexible for change.
We believe that an all-inclusive approach to quality management is imperative, and we plan to involve all our staff members to adopt, adapt and operate under the new SOQM. This is the beginning of a long journey towards quality enhancement and overall excellence in the work that we do which will go a long way and benefit our clients, stakeholders, and the society at large.
