Audit quality accountability strengthened
Three new audit quality management standards focus attention on the role of country managing partners, who will need to sign off on firm processes
International accountancy networks are digesting the full impact of three audit quality management standards, released late last year by the International Auditing and Assurance Standards Board (IAASB). Although these standards have been long in the pipeline, and are not due to take effect until December 2022, firms will need to begin their preparations now if they are to hit this deadline.
In response to how audit processes have adapted to new technologies and growing regulatory concerns in recent years, the IAASB has created a suite of three quality management standards.
ISQM 1 deals with firms’ responsibilities for managing quality and applies to all firms that perform engagements under the IAASB’s standards. The standard updates the International Standard on Quality Control (ISQC 1) and shifts focus from a traditional, compliance-based system to more ‘proactive and effective quality management’.
ISQM 2 deals specifically with engagement quality reviews, while ISA 220 (Revised) sets out how quality is maintained on audit engagements and focuses on the responsibilities of the engagement partner.
All three standards become effective from 15 December 2022.
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