The AASB is proposing to adopt ISQM 1 as CSQM 1 with only the Canadian amendment noted above. The Board believes that it is appropriate to adopt proposed ISQM 1 with no amendments to the scope, such that related services engagements in the Handbook would now be covered by the system of quality management. The Board is proposing to expand the scope of CSQC 1 for the following reasons:
- It is in the public interest that practitioners consistently perform high quality engagements. A system of quality management will support the consistent performance of high-quality engagements.
- Related services engagements are being conducted for a broader range of external users. They are relevant and sought-after services. As a result, there is an increased need for quality management standards to drive the consistent performance of high-quality engagements.
- Proposed ISQM 1 is designed to accommodate different firms, engagements and subject matters now and in the future. It is intended to be proportionate to the nature of the firm and the engagements it undertakes, while requiring a base level of quality management. As a result, the standard will facilitate the application of systems of quality management to smaller firms, including firms that only conduct related services engagements.
The AASB recognizes that implementing proposed ISQM 1 may require effort, particularly for those practitioners who currently are not required to have a system of quality control under CSQC 1. The Board will work to identify implementation challenges and support the development of non-authoritative guidance and tools to assist practitioners with their implementation.