At its meeting on March 9-10, 2020, 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 proposed ISQM 1 included:

1. whether a service provider should be considered as a resource and, therefore, subject to the same requirements as internal firm resources;
2. renaming quality risk considerations introduced in December 2019, including conditions and circumstances, actions and inactions, and events;
3. whether the standard should include examples of how larger firms may apply the requirements, and to examples for smaller firms, in order for firms to compare and contrast;
4. whether specified responses should be included within each component or together in a separate section of the standard; and
5. whether the reference to transparency reports should be in the requirements of the standard or the application material.

Issues discussed related to proposed ISQM 2 included:

1. the cooling-off period for the engagement quality reviewer; and
2. how the firm identifies engagements that should be subject to an engagement quality review.
3. Issues discussed related to proposed ISA 220 (Revised), included:the definition of “engagement team”;
4. links to proposed ISA 600 (Revised) and proposed ISQM 1; and
5. how the standard addresses scalability.

The IAASB expects to approve final proposed ISQM 1, ISQM 2, and ISA 220 (Revised) at its June 2020 meeting. The AASB expects to approve the Canadian equivalent standards at its September 2020 meeting.

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