The impact of the transition from the previous International
Standard on Quality Control (ISQC 1) into the International
Standard on Quality Management (ISQM 1) adopted two years ago
is now clear. The shift from a focus on compliance to a focus on
management of audit quality has had a notable impact on audit firms
over recent years.
Audit firms are now prioritising managing risks rather than
focusing on controlling them.
So, what's the difference between "managing" and
"controlling"?
Under ISQM, quality management is an ongoing and dynamic
process. Firms must establish a system that is proactive rather
than reactive in managing quality. Managing is a much broader task
which not only incorporates the identification of the firm's
quality objectives, recognition of those risks that could hinder
the achievement of these objectives, and the development of those
policies, procedures, and strategies to mitigate them but also
emphasises the ongoing evaluation and
