(Aud Update) Mastering ISQM with KTP & Company PLT: Your Ultimate Guide to Audit Excellence Part 2

(Aud Update) Mastering ISQM with KTP & Company PLT: Your Ultimate Guide to Audit Excellence Part 2

Welcome to KTP & Company PLT's official YouTube channel, your trusted source for top-tier audit and assurance insights! In today's video, we delve deep into the world of International Standards on Quality Management (ISQM).

Join us as we explore the intricacies of ISQM and its pivotal role in elevating audit practices. Whether you're a seasoned auditor or just beginning your journey in the field, this guide is packed with essential knowledge, practical tips, and the latest industry standards to enhance your expertise.

Watch the YouTube video https://youtu.be/5QI8CM0OsqY

What is ISQM ?

ISQM, which stands for International Standards on Quality Management, refers to a set of standards developed by the International Auditing and Assurance Standards Board (IAASB) to enhance the quality of audits and assurance engagements. The key aspects of ISQM include:

ISQM 1: This standard, "Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements", focuses on how audit firms should manage and maintain quality. It replaces the previous standard ISQC 1 and emphasizes a more proactive and tailored approach to quality management. Firms are required to establish a risk assessment process and create a system of quality management (SoQM) that is scalable and adaptable to their specific circumstances and risks​​​​.

ISQM 2: This standard deals with the engagement quality reviews, outlining the responsibilities and processes for conducting these reviews. It is a new standard, introduced to enhance the requirements for engagement quality reviews​​.

ISA 220 (Revised): This standard pertains to the responsibilities of the engagement partner and team in managing the quality of an audit of financial statements. It modernizes the approach to quality management within individual audit engagements​​.

The ISQM standards are designed to be applicable to firms of all sizes and aim to ensure that firms performing audits or other assurance engagements under the IAASB’s standards maintain a consistently high level of quality management. These standards are part of a broader effort to enhance public trust in financial reporting and audits, by ensuring that audit firms adopt a more dynamic, risk-focused, and effective approach to managing audit quality.

Why ISQM ?

The International Standards on Quality Management (ISQM) were introduced to modernize and enhance audit quality management in response to evolving business and regulatory environments. Key reasons for implementing ISQM include:

  1. Adapting to Change: The business world is rapidly evolving, and traditional quality control methods needed an update. ISQM offers a more flexible and relevant approach.

  2. Improving Audit Quality: ISQM focuses on enhancing the reliability and credibility of audits, which is crucial for stakeholder trust in financial reporting.

  3. Proactive Risk Management: Unlike previous standards, ISQM emphasizes a proactive, risk-based approach, requiring firms to identify and address potential risks to audit quality.

  4. Global Consistency: With businesses operating internationally, there's a need for consistent audit practices. ISQM provides a standardized, globally applicable framework.

  5. Technology and Innovation Impact: Recognizing the significant role of technology and innovation in auditing, ISQM incorporates these elements into its framework.

  6. Public Interest and Confidence: By bolstering audit quality, ISQM aims to serve the public interest and enhance confidence in financial markets.

How ISQM in KTP ?

KTP & Company PLT fully leverages an automated auditing platform namely aBOT for documenting ISQM processes, ensuring 100% compliance and efficiency

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