Firms are now in the second year of applying the requirements of ISQM 1. From the onset, the technical differences between the two standards were clearly identified by many professional bodies, regulators, and related authors as:
Back to the principles though the most fundamental change is that from QUALITY CONTROL to QUALITY MANAGEMENT.
Quality
control refers to the processes and activities that an audit firm is in
place to ensure that an audit meets the specified quality standards. Quality
control focuses on identifying and addressing quality issues at the individual
audit level. This can include activities such as inspecting for deficiencies,
tests to ensure performance standards are met, and implementing processes to
prevent quality issues from occurring.
Quality
management on the other hand is about supervising all the activities and work
needed to maintain a desired level of excellence. It is a system to ensure that
the processes used to perform an audit work efficiently and effectively and
that the product meets the expected standards. Therefore, all the processes of
the audit firm are covered in quality management. Every aspect that may have a
direct or indirect bearing on stakeholder satisfaction is taken care of in
quality management. Under quality management, a quality policy is established,
and quality planning is created.
Further,
quality assurance and quality improvement are implemented under quality
management. In quality management, a structured set of policies, processes, and
procedures is integrated to work in harmony as a system, thus making achieving
goals and objectives about quality easier for the people in the audit firm. In
general, we can say that quality management aims to focus on long-term goals by
implementing short-term initiatives. So, the prime requirement of quality
management is that all the stakeholders in the audit firm work in tandem toward
improving the processes, products, and services, and consequently the
organizational culture itself. The basic philosophy at the core of quality
management is that for the long-term success of any audit firm, quality is the
most significant aspect.
It was
Aristotle who said: “Quality is not an act; it is a habit.” That is exactly
what ISQM 1 has in mind. Successful quality management is what will ensure
sustainability for audit firms. It enhances an audit firm’s brand and
reputation, protects it against risks, increases its efficiency, boosts its profits,
and reduces waste, and positions it to keep on growing. All while making staff,
clients, and stakeholders happier.
In
an extremely competitive environment business survival and business success are
not automatic outcomes of having a business. For the audit firm to not only
survive but also thrive in the 21st century, quality is its license to trade.
And only an impeccable quality management systems, as envisaged by ISQM 1, will
deliver the desired results.
