The IAASB proposed changes to the process of quality management for audit firms with a suite of three EDs.CA ANZ and ACCA prepared joint submissions which were lodged on 1 July.
We connected and received feedback from a wide range of our members, including participating in a number of face to face and web-based sessions with various member groups and obtaining feedback from members who perform quality reviews.
We support adopting a risk assessment based approach to quality management for audit firms but has concerns with aspects of the proposals
The key points of our submission:
- We support the introduction of a risk assessment based approach to quality management for audit firms
- We support the creation of a new and separate standard, ISQM 2, which deals with the responsibilities of the Engagement Quality Reviewer.
- We do not support the use of the term 'significant public interest' entity for determining which entities should be subject to an engagement quality review as it introduces unnecessary complexity and judgement.
- We have concerns with the scalability of, and work effort involved, in the proposals as drafted for each of the exposure drafts. We encouraged the IAASB to further refine the proposals and closely consider the cost versus benefit of each proposals, particularly for small and medium practices.
- We have also encouraged the IAASB to reconsider the proposed application date due to the work effort required for implementation.