Resources to assist audit firms with the design, implementation and monitoring of quality management systems are available from ICAEW.
Designing and implementing a system of quality management (SOQM) under the International Standard on Quality Management (ISQM) 1 is a journey rather than a destination. “The journey does not end once an SOQM is operational,” says Amelia Pickard, a technical manager in ICAEW’s Audit and Assurance Faculty. “The SOQM should be continuously reviewed and updated, where necessary, to ensure that it remains effective.”
Firms are at various stages on this compliance journey, according to research by ICAEW’s Quality Assurance Department (QAD). “It’s important to maintain momentum,” says Pickard. There are practical ICAEW resources to assist with the journey, as you fine tune your SOQM and adapt it in response to changes in the internal and external risk environment.
The SOQM should be continuously monitored and updated, where necessary, to ensure that it remains effective
Quality management in audit firms is our hub of practical resources to help firms adopt and adapt to the quality management standards ISQM 1, ISQM 2 and ISA 220 (Revised) that became effective from December 15, 2022.
Resources are available for firms of all sizes and among the many on offer are:
- a sole practitioner approach to ISQM 1;
- software options for ISQM 1 design and implementation;
- root cause analysis for small practices; and
- use of resources obtained from service providers.
It also offers some pointers on the expectations of regulators such as QAD and the FRC:
Firms need to be alert to changes in their internal and external risk environment
ISQM 1 has introduced a new quality management approach that is focused on proactively identifying and responding to risks to quality. Firms need to be alert to changes in their internal and external risk environment. Where changes are identified, firms should consider whether and how their SOQM should be adapted in response – and there are many factors to consider.
- staff turnover;
- staff appraisals;
- firm mergers;
- results of internal or external file reviews and inspections; and
- changes in accounting or auditing standards.
Don’t lose sight of the potential for more efficient and profitable engagements, reduced risk of adverse inspection findings and increased audit quality
Continuous monitoring and adjusting of the SOQM may seem daunting but the benefits go beyond compliance. So, when you are looking ahead down that long road, don’t lose sight of the potential for more efficient and profitable engagements, reduced risk of adverse inspection findings and increased audit quality – or ICAEW resources to support you on the journey.
ISQM 1 - maintaining momentum
ICAEW will be hosting ISQM 1 – maintaining momentum, an in-person, morning event on 21 November 2023 at Chartered Accountants’ Hall. It will look at QAD perspectives, what firms have learned so far, how SoLogic goes about root cause analysis training, and will offer the chance to discuss learnings and challenges in roundtable discussions with your peers.