Accountants are you ready for ISQM 1?
09 November 2022
Guest article written by Karen Eckstein of Karen Eckstein Limited.
ISQM 1 is the international standard on quality management for firms that perform audits or reviews of financial statements, or other assurance or related services engagements. It includes a number of significant changes that affected firms need to aware of.
The deadline to implement the changes under ISQM 1 is 15 December 2022. The standard requires firms to establish quality objectives, identify and assess quality risks, design and implement responses, and identify information indicating a need to add/modify quality objectives, quality risk or responses.
The issues to consider include governance and leadership, risk assessment processes, the ethical standards required, acceptance and continuance, engagement performance, resources, information and communication, and monitoring and remediation to deal with identified deficiencies.
Firms need to consider what clients they are prepared to act for, how they will deal with the requirements and prove compliance with the requirements. Other issues to consider include, staffing (to ensure appropriate expertise for the audit in question), fees (to enable the job to be carried out to the standard required) and processes for the recording of information, actions and thought processes before and during the audit.
Firms should be taking steps now to review their processes and governance to ensure that they comply with ISQM 1- there is not much time left before the deadline!
If you want to discuss any of the points raised in this article, Karen is happy to be contacted directly on [email protected].