Overview

CSQM 1 replaces Canadian Standard on Quality Control (CSQC) 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance Engagements. It incorporates a risk-based approach that firms are required to follow in designing, implementing and operating a system of quality management for audits or reviews of financial statements, or other assurance or related services engagements that is scalable to the nature and circumstances of the firm and the engagements it performs.

CSQM 1 sets out requirements relating to: (i) the system of quality management; (ii) the firm's risk assessment process; (iii) governance and leadership; (iv)  relevant ethical requirements; (v) acceptance and continuance of client relationships and specific engagements; (vi) engagement performance; (vii) resources; (viii) information and communication; (ix) specified responses; (x) the monitoring and remediation process; (xi) network requirements or network services; (xii) evaluating the system of quality management; and (xiii) documentation.

CSQM 1 is effective as follows:

• Systems of quality management in compliance with CSQM 1 for audits or reviews of financial statements or other assurance engagements are required to be designed and implemented by December 15, 2022, and the evaluation of the system of quality management required by paragraphs 53-54 of CSQM 1 is required to be performed within one year following December 15, 2022.
• Systems of quality management in compliance with CSQM 1 for related services engagements are required to be designed and implemented by December 15, 2023, and the evaluation of the system of quality management required by paragraphs 53-54 of CSQM 1 is required to be performed within one year following December 15, 2023.