AICPA’s Proposed New Quality Management Standards Aim to Enhance and Maintain a CPA Firm’s Audit Quality
The American Institute of CPAs’ (AICPA) Auditing Standards Board (ASB) has issued the exposure draft (ED), Proposed Quality Management Standards, that includes three interrelated standards that address the way CPA firms manage quality for their accounting and auditing practices. The standards offer a new proactive, risk-based approach to effective quality management systems within CPA firms, which will improve the scalability of the standards and promote a system tailored to the firm and its engagements.
“As the environment in which practitioners offer services becomes more diverse, it’s more important than ever for CPA firms to tailor their quality management processes to their circumstances and maintain and enhance audit quality,” said Tracy Harding, CPA, AICPA Auditing Standards Board Chair. “Our proposed revisions to the quality management standards offer CPA firms a framework for developing a quality management system that addresses each firm’s practice. The framework is converged with international standards so that firms performing engagements under those standards and generally accepted auditing standards (GAAS) use a consistent approach to quality management.”
The ED aligns with the International Auditing and Assurance Standards Board’s (IAASB) quality management standards. The proposed standards include changes such as using the terms quality management and engagement quality review instead of quality control and engagement quality control review, respectively, used in the current standards.
The three proposed standards are:
- Proposed Statement on Quality Management Standards (SQMS) A Firm’s System of Quality Management
- Proposed SQMS Engagement Quality Reviews
- Proposed Statement on Auditing Standards (SAS) Quality Management for an Engagement Conducted in Accordance with Generally Accepted Auditing Standards
The proposed standards would supersede Statement on Quality Control Standards No. 8, create a new QM section in AICPA Professional Standards and supersede SAS No. 122, as amended, section 220, Quality Control for an Engagement Conducted in Accordance with Generally Accepted Auditing Standards.
Interested parties are encouraged to submit their feedback to the ASB at CommentLetters@aicpa-cima.com by June 11, 2021. The ASB intends to begin addressing feedback at their July 26-29 meeting, and devote the entire Aug. 11 meeting to further consideration of the feedback.