With the IAASB’s approval of three interrelated quality management standards (ISQM 1, ISQM 2, and ISA 220), a new major milestone has been achieved for the audit and assurance profession. The new standards introduce a robust, scalable and proactive approach to audit quality management which is central to serving the public interest.
In our industry’s increasingly complex operating environment, we believe that these new standards significantly enhance risk-based quality management, global consistency and lay the foundation for high quality audits across the auditing profession. I recently had the chance to speak with Accounting Today and comment on the new standards, the importance of executing on audit fundamentals and how our firm is driving a culture of accountability.
At KPMG, we embody our values of integrity and excellence in our unwavering commitment to quality which is fundamental to achieving our aim to be the most trusted and trustworthy firm. I’ve previously mentioned that, for me, part of this commitment to quality includes taking an “I own it” approach where everyone is accountable and owns their part in driving quality and contributing to the culture of integrity at KPMG. Our Audit strategy is built upon a quality-centric culture and consistent execution in line with the requirements and intent of applicable professional standards, within a strong system of quality controls.
If recent events have taught us anything, it is that we must diligently execute fundamental audit procedures and collate robust evidence in accordance with the professional standards in order to execute quality audits. In adopting the quality management standards, we are fully committed to meeting the expectations of our shareholders related to the new standards and are building on our solid quality foundations to drive further sustainable advances in quality and consistency across KPMG. Having a strong system of quality management that is robust, consistent and scalable drives quality engagement execution.
Accounting firms must constantly evolve to reflect the changing needs of society, technology and business practices. For KPMG, this means significant ongoing investment in our system of quality management, global monitoring of audit quality, and enhanced support, technology, tools and training for our engagement teams.
As the audit and assurance industry continues to evolve in line with the changing and increasingly complicated business landscape, these new standards will drive firms to consistently implement quality management to provide high quality audits for the benefit of investors.