At its meeting on September 16-20, 2019, the IAASB discussed the comment letters received on certain areas of the Exposure Draft of ISQM 1 relating to the quality management approach, implementation challenges, the components and structure of the standard and the firm’s risk assessment process. The Board concurred that four significant themes had emerged from the comments: scalability; prescriptiveness; addressing firms who do not perform audit or assurance engagements; and challenges with implementation.

The Board, in general, supported proposals to address the structure of the standard and clarify the nature of the components and how they interrelate. The Board also supported addressing the granularity of the quality objectives, introducing quality risk considerations, and refining the required responses. The Board agreed with the ISQM 1 Task Force’s proposals to simplify the firm’s risk assessment process, including addressing concerns about the threshold for the identification of quality risks. The Board did not support the proposal to develop a separate standard for quality management for related services engagements and encouraged exploration of other ways to address scalability concerns.

Review the summary, including the podcast, on the IAASB's Web site.