ISQM 1 software for small and mid-size audit firms

What ISQM 1 asks of your firm

ISQM 1 has eight components. Two are processes (the firm's risk assessment process, and monitoring and remediation). For the other six, the firm sets quality objectives, identifies the risks to achieving them, and designs responses. At least once a year, the individual with ultimate responsibility evaluates whether the system provides reasonable assurance that its objectives are met.

Evidence pulled from your engagements

Monitoring is easier when the data already exists. Stowbill's quality dashboard counts, for the year: engagements started and those with an acceptance assessment, team members who haven't confirmed independence, gate items waived by partners, review notes raised and still open, working papers prepared but not reviewed, and files that passed the 60-day assembly deadline without being locked. Each one points to a possible deficiency before an inspector finds it.

The annual evaluation

When the partner with ultimate responsibility signs the annual evaluation, Stowbill shows open deficiencies and unconfirmed independence alongside the form. The conclusion (reasonable assurance, reasonable assurance except for matters noted, or not achieved) and its basis are recorded with the signer and date, and appear in every engagement's inspection pack.

Start from a sensible default

• Default quality objectives for each component, paraphrased from ISQM 1 paragraphs 28 to 33, which you can extend with firm-specific objectives.
• A free ISQM 1 risk register template you can download and adapt before you sign up.
• Pakistan and ISA statutory audit templates whose gates map to the engagement performance component.

Questions