ISQM
Standards for Quality Management in Auditing and Reviews of Financial Statements.
ISQM Preparation Support
In September 2020, the International Auditing and Assurance Standards Board (IAASB) approved two new International Standards on Quality Management - ISQM 1 and ISQM 2 - alongside a revised ISA 220. These replaced the previous quality control standard (ISQC1) and the version of ISA 220 in place at the time to create a more robust, proactive system for quality management for firms that perform audits or reviews of financial statements, or other assurance or related services engagements.
Mercia’s Quality Management Manual and targeted training courses help firms effectively meet the ISQM requirements and maintain ongoing compliance.
What are ISQMs?
The ISQMs focus on improving firms’ quality management systems with a stronger emphasis on proactive risk identification and continuous improvement. They include:
- ISQM 1: Enhances the overall robustness of a firm’s quality management system
- ISQM 2: Sets requirements for the appointment and eligibility of the engagement quality reviewer
- ISA 220 (Revised): Addresses auditor responsibilities on individual audit engagements.
The standards place greater accountability on firm leadership to embed quality at the heart of strategy and operations and to promptly address any deficiencies.
Timeline and Compliance
- Approved: September 2020
- Standards Released: December 2020
- Effective Date: 15 December 2022
As the ISQMs have now been in place for some time, firms are expected to have fully implemented and continually complied with the ISQMs. Firms will need to be able to demonstrate compliance during regulatory monitoring visits by supervisory bodies such as the ICAEW, ICAS, ICAI, and ACCA.
Mercia Quality Management Manual
Our manual supports firms of all sizes in complying with ISQM requirements. It includes:
- Over 100 potential quality management risks
- Comprehensive risk ratings
- Sample risk mitigation procedures tailored to your firm’s needs.
ISQM Training Courses
ISQM 1 Practical Application - The Monitoring and Evaluation Phase
A three-module course designed for those with operational responsibility for the firm’s system of quality management, including service line leads and ethics officers.
Root Cause Analysis - A Practical Appraisal
Explore the principles of root cause analysis and its relevance to ISQM 1 compliance, auditing standards, and the regulatory environment.
What are Mercia's Quality Management procedures?
To comply with ISQM, you will need to keep a record of your service providers Quality Management procedures.
For Mercia members, we have put together a document outlining our current internal Quality Management Procedures in:
- Training
- Peer Reviews
- Technical Queries
- Publications
- and more...
ISQM Preparation Support
Get Advice and Support for getting your firm ready for ISQM
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