Issues on Quality Management Standards

Author: Pat Patterson

An engagement quality review is a specified response the firm designs and implements to address quality risks. An EQ reviewer performs the EQ review at the engagement level on behalf of the firm. SQMS No. 1, A Firm’s System of Quality Management, requires that the firm determine when an engagement quality review is an appropriate response to quality risks.

SQMS Engagement Quality Reviews (SQMS No. 2) addresses:

• the appointment and eligibility of the EQ reviewer and
• performance of EQ reviews.

The changes are intended to respond to issues and challenges with the requirements for EQ reviews in SQMS No. 1 and the previous Statement on Quality Control Standards (SQCS) No. 8, A Firm’s System of Quality Control (QC sec. 10), and AU-C section 220, Quality Control for an Engagement Conducted in Accordance with Generally Accepted Auditing Standards.

This is accomplished by:

• Creating one standard that contains the requirements for EQ reviews, and by making changes that clarify and strengthen aspects of those requirements for a more robust EQ review
• By revising requirements that focus on the objective evaluation of the significant judgments the engagement team makes and the conclusions reached.

SQMS No. 2 is how this is accomplished by an engagement quality review. This course will address those requirements.

Publication Date: July 2024

Designed For
Professionals who need to be Knowledgeable and aware of the changes brought on by SQMS No. 1, No. 2., and No. 3., SSARS 26, and SAS 146.

Topics Covered

• Review Definitions of Quality Control and Quality Management
• Examine New SAS 147 and Ethics issues on NOCLAR
• Quality Managment Introduction
• Issues in Quality Management Standards Compared to Quality Control
• Other matters considerred important and timely

Learning Objectives

• Identify how to apply the requirements and responsibilities of the new Quality Management standards and the Quality Management Standards for the Engagement Quality Reviewer for audits, reviews, and compilations
• Identify the SQMS that addresses the appointment and eligibility of the EQ reviewer and the performance of EQ reviews
• Identify by what year should you understand how to perform root cause analysis
• Identify the component that deals with obtaining, generating, or using information regarding the SQM
• Identify the date implementation of the new quality management standards is effective

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Auditing (2 hours)

Program Prerequisites
None

Advance Preparation
None