Time to Review Your ISQM

Overview

ISQM (Ireland) 1 paragraph 53 requires the ‘individual with ultimate responsibility’ (IUR) to evaluate the Statement of Quality Management (derived from the ISQM 1) at least annually as of a point in time. 

This supplements the requirements for ongoing monitoring and remediation which should ideally include both regular (e.g. monthly or quarterly) activity and event-driven activity such as going through the findings of an external file review or dealing with a quality failure on a specific audit.

Key Features

The IUR should be able to arrive at what amounts to either an unqualified, ‘except for’ or adverse conclusion on whether the SOQM provides reasonable assurance that the quality objectives are being met. 

Under the Irish Quality Management standards, this review must explicitly include evaluating the policies and procedures for statutory audits including coaching, supervision and review of the team and organising the audit file (paragraph 34-1(f)(i) and (ii)). 

Unless the conclusion is unqualified, the IUR needs to act promptly to rectify the deficiencies (with the help of the wider audit team).

ISQM (Ireland) 1 also requires audit firms (in paragraph 56) to undertake periodic performance evaluations of the IUR and anyone assigned operational responsibility (the IOR – the Individual with Operational Responsibility) for the SOQM.