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In-Brief Podcast – The IAASB’s Exposure Draft on Quality Management is Now Available for Comment

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Mar 12, 2019

On March 12, 2019, the Auditing and Assurance Standards Board (AASB) released a podcast that provides a plain and simple overview of the key highlights of the IAASB’s Exposure Draft on quality management at the firm and engagement level.

The Exposure Draft, issued as four separate documents, includes:

  1. a significantly revised firm standard – now referred to as the International Standard on Quality Management;
  2. a new standard dealing with engagement quality reviews;
  3. a revised International Standard on Auditing dealing with quality management for audits of financial statements; and
  4. an overall explanatory memorandum that sets out significant issues common to all three Exposure Drafts and discusses the proposed effective date and implementation period.

The IAASB introduced a new approach to achieving quality at the firm level, called “quality management,” driving the change to the name of the standards. This approach is risk-based and focuses on proactively identifying and responding to risks to quality. The standard sets out quality objectives and includes some required responses to risks, but not all. Firms will need to determine what additional responses are necessary to address those risks. This approach allows firms to tailor their systems of quality management to reflect the nature and circumstances of the firm and the engagements it performs. As a result, the standards can be scaled to firms of different sizes.

Listen to the podcast and review the transcript on the AASB's website.

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