IAASB's proposal aims to ensure that firms’ systems continue to be robust and effectively support high-quality audits and other engagements, the IAASB has proposed various enhancements to address firms’ systems of quality management, previously known as systems of quality control. This Exposure Draft includes a new proactive risk-based approach to an effective system of quality management that establishes the foundation for consistent engagement quality.
ACCA and CA ANZ joint response supports the quality management approach which can be described as a more “thinking” approach in comparison to ISQC1. We are also supportive of a risk assessment based approach, subject to specific concerns on aspects of the proposals. We also believe that separating ISQC 1 into two standards is sensible. Our detailed comments on ED-ISQM2 are available in our separate submission letter on that ED.
We note that in our discussions with stakeholders there was general concern that the proposed application date would not provide sufficient time for firms to make the necessary changes and encourage the board to provide a longer period before the standard becomes applicable.
To read in full, please download the consultation response.