What About New Quality Management Standard, SQMS No. 1? (Completed)

SQMS No.1, Statement on Quality Management Standards (SQMS), A Firm’s System of Quality Management supersedes Statement on Quality Control Standards (SQCS) No. 8, A Firm’s System of Quality Control (QC section 10). The Auditing Standards Board (ASB) last made significant changes to its quality control standards in October 2006 with the issuance of SQCS No. 7, A Firm’s System of Quality Control, superseding all previously issued SQCSs. SQCS No. 7 converged with the International Auditing and Assurance Standards Board’s (IAASB) International Standard on Quality Control (ISQC) 1, Quality Control for Firms That Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements. In November 2010, SQCS No. 8 was issued and superseded SQSC No. 7. SQCS No. 8 applied the ASB’s clarity drafting conventions to SQCS No. 7 without changing or expanding it in any significant respect.

Since then, the environment in which firms operate has evolved. The power and use of technological resources have increased exponentially, both by businesses and by firms. The expectations of regulators, given high-profile business failures, are higher. In addition, the ASB has received feedback that SQCS No. 8 has a “one size fits all” approach that does not adapt well to differences in the size or nature of firms or their services.

SQMS No. 1 takes a new approach that emphasizes the responsibility of firm leadership for proactively managing quality, while at the same time being scalable to deal with differences in the size of firms and nature of the services they provide. The essence of the new approach is to focus firms’ attention on risks that may have an impact on engagement quality.

Unlike QC section 10, the new approach requires a firm to customize the design, implementation, and operation of its system of quality management based on the nature and circumstances of the firm and the engagements it performs. The new approach also requires the firm to transition from policies and procedures that address standalone elements, as required by QC section 10, to an integrated and iterative approach that reflects upon the system. The standard takes an initiative-taking approach to quality management, with an increased emphasis on a continual flow of remediation and improvement.

Who Should Attend
Professionals in management and public accounting, as well as other professionals with a “need to know” what the latest audit requirements, procedures, and techniques on quality management are.

Topics Covered

• A New Approach in auditing focused on Quality Management
• Objective of the new Standard
• Risk Assessment Process
• Governance and Leadership
• Resources
• Information and Communication
• Monitoring and Remediation
• Networks
• Scalability
• Relationship between SQMS No. 2 and SQMS No. 1
• Why a Separate Standard?

Learning Objectives

• Recognize and apply the changing attributes of Quality Management
• Identify the new objective of the new standard

Level
Intermediate

Instructional Method
Group: Internet-based

NASBA Field of Study
Auditing (2 hours)

Program Prerequisites
General understanding of auditing quality standards.

Advance Preparation
None