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Quality Management – AASB

Date recorded:

At its meeting on December 2-3, 2019, the AASB provided input to the IAASB members from Canada on issues related to the IAASB’s project to revise standards for quality management at the firm and engagement level, including engagement quality reviews.

Issues discussed related to ISQM 1 included: how the standard should address quality risk considerations; whether responses to quality risks should be included in one section versus within each component; and the factors to be considered in determining an appropriate cyclical basis for selecting completed engagements for inspection.

Issues discussed related to ISQM 2 included: whether the objective is sufficiently outcome based; how the firm should identify engagements that should be subject to an engagement quality review; and the cooling-off period of the engagement quality reviewer.

Issues discussed related to ISA 220 (Revised) included: whether the definition of engagement team should include component auditors; whether the proposed standard should include application material on evolving audit delivery models; and clarifying which requirements must be performed by the engagement partner and those where other members of the engagement team can assist the engagement partner.

The AASB will continue to discuss these and other issues at future meetings.

Review the executive summary on the AASB's Web site.

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