ISQM Implementation - Quality Management Manual (International)
What is ISQM?
The International Standards of Quality Management (ISQMs) are designed to fix inefficiencies in the current standards. More focus is placed on proactive responses to quality management issues. The impact of ISQMs mean that professional accountancy firms will need to change the way they handle quality management.
ISQM requires the firm to design, implement and operate a system of risk-based quality management processes.
Who needs to meet ISQM standards?
The ISQM applies to all firms performing audits, reviews of financial statements or other assurance or related services engagements.
If your firm practices any of the above services, then you need to meet the Quality Management Standards of ISQM that came into effect on 15th December 2022.
What is the Quality Management Manual (International)?
The Quality Management Manual (International) contains a list of over 100 potential quality management risks that a firm could face. It identifies the causes and potential responses a firm could implement to address the risks.
It should be noted that a firm’s risk assessment must be individual to the firm. This manual should only be used as a starting point to ensure that all the relevant risks and their responses are adequately documented.
In addition to a database of potential risks, the Quality Management Manual (International) includes an example Quality Management Policy, Staff Appraisal Forms & Processes, Quality Control checklists and so much more. All to make sure you have the tools to design and implement an effective Quality Management system.
The Quality Management Manual (International) has been designed by experienced team of technical audit and compliance reviewers. It has been broken into easy to use sections and categories so you can find the information you need quickly.
Will the Mercia Quality Management Manual mean my firm is ISQM compliant?
The Quality Management Manual by itself will not make your firm compliant. Instead, the Quality Management Manual offers advice and details the steps your firm needs to take to comply with the ISQM standards.
For example, included in the Quality Management Manual is a pre-populated Risk Assessment Tool.
The Risk Assessment Tool includes over 100 example risks which your firm may face; giving you a starting place for you to customise and add your own assessments based on your own needs.
Who can benefit from this Manual?
The Mercia Quality Management Manual (International) has been designed to benefit firms of any size. From Sole Practitioners to firms with over 20 audit engagement partners (EPs).
The manual categorises risks that could apply to smaller and larger firms.
- General requirements
- ISQM1 - Risk Assessment including the following appendices: Risk Assessment Tool; Example Quality Management policy; Assessing your Service Provider; Annual declaration form for individuals (incorporating independence, Fit & Proper, confidentiality and internal procedures); Fit & Proper form for the firm; Staff appraisal form
- ISQM1 - Monitoring and Remediation including the following appendices: Example Quality Management policy; Quality Control procedures programme; Internal Quality Control checklist; Cold file review summary; Cold file review checklist; Root cause analysis programme
- ISQM1 - Other (Networks, documentation)
- ISQM2 - Engagement Quality Review including the following appendices: Example EQR policy; EQ engagement forms
- [Audit firms only] ISA 220
- PIEs [only limited details provided and not a full policy]
July 2024
The principal technical changes in this update include updates to reflect revisions made to the Audit Manual.
June 2024
The principal technical changes in this update include:
- Updates to offer more guidance on root cause analysis.
January 2024
The principal technical changes in this update include:
- Updates to reflect latest IFAC guidance.
August 2023
The principal technical changes in this update include changes and consequential amendments in relation to ISA 600 Special considerations - Audits of group financial statements (Including the work of component auditors).
November 2022
This update reflects best practice amendments and a number of enhancements to guidance within the manual rather than any changes to underlying requirements. The principal updates include:
- Additional guidance notes to reflect best practice and latest guidance.
- Additional suggested wording in the Example quality management policy.
- Enhancements to the Service provider assessment.
- Enhancements to the Quality management procedures programme.
In addition, minor changes have been made for formatting, grammar, consistency across documentation and overall presentation.
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Additional Versions:
The Quality Management Manual is also available in these additional versions:
