28 February 2021
Audit Quality Management
The current environment is challenging for assurance practitioners. With staff shortages that may not go away any time soon, lean is the key word when going forward. We need to pay as much attention to the systems, processes and controls within our practice as we do when we are auditing clients. The new quality management standards can help provide us with a framework.
The final pronouncements on PES 3, PES 4 and ISA 220 were published in December 2020. From December 2022 all auditors and assurance practitioners must adhere to the new standards.
Implementing the requirements at a firm and engagement level will take considerable time and effort. At Audit Assistant, we are developing ways to reduce the burden of the changeover and integrate the requirements of the new standards into our systems.
To help firms achieve their quality management objectives:
- We are developing a customisable quality control manual for our clients to help develop policies and identify risks.
- This sets out the steps to manage audit and assurance quality in a scalable manner – acknowledging that many of our firms are sole practitioners.
- We are also making a supporting tool for client screening and induction that fits with the quality management manual.
- In addition, we have a supporting tool in development for staff recruitment, induction and tracking training.
- As we create these tools and update the templates, we will ensure that there will be a clear connection between the work files and the quality control manual and other tools.
- We will continue to develop a structured training system that teaches users how to use Audit Assistant correctly, including resources that teach quality control.
- Through file reviews, we monitor our clients’ work to ensure that our audit quality policies, procedures, and systems adequately address any quality risks. (These processes could be incorporated into your quality management system.)
To finish the race, staying competitive and profitable, firms must develop strategies and processes to cover the basics of good quality management well.
For further information on the new quality management requirements see our further articles:
New Quality Standards: Outline of PES 3
New Quality Standards: Main components of PES 3
New Quality Standards: An Outline of the new ISA (NZ) 220
New Quality Standards: PES 4 Explained