December 17, 2020
New, Revised Standards Strengthen, Modernize Approach to Quality Management
The International Auditing and Assurance Standards Board (IAASB) today released its three quality management standards. The standards promote a robust, proactive, scalable and effective approach to quality management and mark a significant evolution of the existing quality control standards.
“These standards will drive the audit profession to an enhanced approach to quality ‘management’ rather than ‘control’, which better enables the consistent performance of quality engagements, including audits,” according to IAASB Chair Tom Seidenstein. “The standards place greater responsibility on firm leadership for continuously improving the quality of their engagements and remediating when deficiencies are found. When effectively implemented, the standards should help ensure that a commitment to quality is at the heart of firm strategy and operations.”
The suite of standards includes:
· International Standard on Quality Management (ISQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements;
· ISQM 2, Engagement Quality Reviews; and
· International Standard on Auditing 220 (Revised), Quality Management for an
Audit of Financial Statements.
The standards become effective on December 15, 2022.
The IAASB has also developed Bases for Conclusions and factsheets to support the implementation of the new standards, which are available on the IAASB’s website. Additional support materials will be published in 2021.