FRC revises ISQM quality management standards for auditors

The Financial Reporting Council (FRC) has issued revised quality management standards for an audit firm’s responsibilities to design, implement and operate a system of quality management

Implementation of the new standards will require extensive changes to quality management processes at audit firms and will take time for new approaches to be bedded into daily management systems.

The revisions include two standards, the International Standard on Quality Management (UK) (ISQM) 1 focusing on quality management for firms that perform audits or reviews of financial statements, or other assurance or related services engagements, and ISQM 2 focusing on engagement quality reviews.

This also involves a revision to the International Standard on Auditing (UK) 220 (Revised July 2021) Quality Control for an Audit of Financial Statements.

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