The new IAASB standards are an attempt by the governors to make quality standards more relevant to accounting firms of differing shapes and sizes. With waiting times due to expire soon and the standards becoming official before the close of 2022, let’s see who’s affected in the UK and take a closer look at the guidelines to come.
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Any firm that performs audits under international standards will need to prepare for ISQM 1, ISQM 2, and ISA 220. These three elements combine to make up the new standards under the jurisdiction of the IAASB (International Auditing and Assurances Board).
The new standards will take effect from December 15th, 2022, having been in discussion for several years. It cannot be stated more firmly that all auditing firms affected should make themselves fully aware of the changes prior to the launch date. Early implementation will likely save huge amounts of time in the long run.
See our post on what is the ISQM 1 implementation timeline? for more information.
The IAASB exists to create a fairer system for all, on an international basis. By introducing new quality management standards, auditors are better equipped to judge the performance of individual businesses.
Having a set of standards requires firms to adhere to quality indicators, with an ultimate goal of continuous improvement. The standards aim to demonstrate a firm’s commitment to quality, both to its employees and clients. Regulations also serve to boost the public’s perception of the auditing profession.
Given the changes, it’s recommended that auditors consider using specialist software to help them manage the new workload. Digital technologies can better organize the information and manage manual processes that would take an enormous amount of time for a human to achieve.
Clear guidelines are good for businesses and auditors alike. Any firms wishing to cut corners in their quality offering will likely be found out under the new risk-based procedures. And more transparency will serve to reinforce public confidence in the process.
The shift from ‘quality control’ to ‘quality management’ places more responsibility on audit firms to improve. There’s no streamlined level of quality to attain anymore, and firms will need to implement plans for continuous improvement across all levels of their processes. This should result in a greater level of service being provided, meaning everyone benefits.
For more information, read our article on will new guidance materials be released for ISQM 1?
With the changes in talks for several years now, auditing firms have had ample opportunity to prepare for the new ISQM standards. The IAASB recommends taking a granular approach, working through their processes individually in order to break down their operations into more palatable sections for their auditor.
Inflo software can help all firms manage their audits more effectively. Using AI through digital technology, Inflo can be your work buddy, looking after the routine manual processes that take up most of your time. The software can map out insights, risk assessments and quality objectives.
