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It’s been two years since the introduction of ISQM 1 and from the ICAEW’s latest Audit Monitoring Report findings there is still some way to go in respect of improving audit quality.

Technical FAQs

In late 2022, the implementation date for ISQM1 was fast approaching and many firms were frantically trying to finalise their Systems of Quality Management (SOQM) and get this in place (checking objectives, that risks and responses were all appropriately identified, assessed, documented and getting ready for implementation).

 

One year later many firms were once again now trying to get their first ISQM 1 compliance internal monitoring completed so as to be able to make their annual declaration. With these deadlines met, some may have believed that quality management implementation was done and behind us, but unfortunately no, as there are a variety of SOQM issues that firms (and individuals) may be facing now also including “Quality management fatigue” i.e. becoming overwhelmed by what may feel like constant quality management focus and pressure and, consequently, start to disengage with it all!

 

Firms that believe this fatigue could be an audit quality risk will need to focus on reassessing that risk and once assessed considering how to deal with it. Alternatively, firms may choose to completely change some objectives and amend existing identified risks, so as to consider fatigue caused issues and then reassess and deal with just those risks. Effective mitigation will be largely driven by the nature/circumstances of the firm and its characteristics.

 

While there is no one solution to quality management fatigue, possible mitigations could include:

  • The individuals with operational responsibilities might benefit from more assistance, and staff members who have not previously been directly involved in the design, implementation and monitoring of the SOQM might benefit from widening their experience
  • Role/responsibility rotation  (this may not be possible in smaller firms though)
  • Increased time made available for quality management related activities
  • Improved communication between those involved in maintaining the SOQM (ultimately being all the partners)
  • External support from the likes of HAT regarding use of our Audit Regulatory and ISQM Procedures Manual and Annual Audit Compliance Reviews / ISQM independent periodic reviews (Annual Compliance Review Services for Regulatory Assurance)