IAASB releases audit quality management guides

The International Auditing and Assurance Standards Board issued two new implementation guides Monday for its recent quality management standards.

The guides aim to help constituents understand the new quality management standards and properly implement the latest requirements. They include a First-time Implementation Guide for 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 in addition to a First-time Implementation Guide for ISQM 2, Engagement Quality Reviews.

The guides arrive at a time when auditors have come under pressure to improve their audits after a series of international accounting scandals in recent years involving companies like Wirecard and Steinhoff.

The IAASB also plans to issue an implementation guide for International Standard on Auditing 220 (Revised), Quality Management for an Audit of Financial Statements, in Q3 this year. The new quality management standards are set to take effect on Dec. 15, 2022, but the IAASB is encouraging all practitioners to plan early for appropriate implementation, given the potential impact of the changes to their firms’ systems of quality management.

The IAASB, which is affiliated with the International Federation of Accountants, cautioned that the new publications don’t amend or override the International Standards on Quality Management, the texts of which alone remain authoritative. Reading the publications isn’t a substitute for reading the ISQMs.

Courtesy of IFAC