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New quality management suite of standards: Practitioner alert

This practitioner alert raises awareness about the new Canadian standards on quality management. Learn about this new suite of standards comprising CSQM 1, CSQM 2, and CAS 220, and how they impact you.

We have issued this practitioner alert to raise awareness about the new Canadian standards on quality management at the firm and engagement level, which include:

  • Canadian Standard on Quality Management (CSQM) 1, Quality Management for Firms that Perform Audits or Review of Financial Statements, or Other Assurance or Related Services Engagements
  • CSQM 2, Engagement Quality Reviews
  • Canadian Auditing Standard (CAS) 220, Quality Management for an Audit of Financial Statements

What will I learn about?

  • why the scope of CSQM 1 now includes related services engagements
  • what types of engagements are included in related services
  • how this suite of standards is scalable to firm circumstances
  • the components of a system of quality management (SOQM)
  • the monitoring and remediation requirements
  • considerations for first-time implementers
  • resources to help you prepare for implementation

Where the extant standard, Canadian Standard on Quality Control (CSQC) 1 applied only to audits or reviews of financial statements or other assurance engagements, the scope of the new Canadian standards has been expanded to also include related services engagements. With respect to CSQM 1:

  • Firms are required to design and implement their system of quality management for audits or reviews of financial statements or other assurance engagements by December 15, 2022. They are required to evaluate their system within one year following this date.
  • Firms are required to design and implement their system of quality management for related services engagements by December 15, 2023. They are required to evaluate their system within one year following this date.

This alert takes the perspective of a firm implementing the suite of quality management standards for the first time. It will help you understand the changes you can expect to see and how those changes may impact your current practices and policies.

For those firms which have already established a system of quality management and who have previously implemented CSQC 1, the International Auditing and Assurance Standards Board (IAASB) has prepared fact sheets which provide an overview of the changes made and new material introduced in ISQM 1 Quality Management for Firms that Perform Audits or Review of Financial Statements, or Other Assurance or Related Services Engagements, CSQM 2 Engagement Quality Reviews, and IAS 220 (revised) Quality Management for an Audit of Financial Statements. The Canadian standards CSQM 1, CSQM 2, and CAS 220 mirror ISQM 1, CSQM 2, and IAS 220 (revised).

This practitioner alert and our audit and assurance alert contain links to the respective IAASB fact sheets.