New Statement on Quality Control Standards Effective as of Jan. 1

Statement on Quality Control Standards (SQCS) no. 7, A Firm’s System of Quality Control, applies as of Jan. 1, 2009, to a CPA firm’s system of quality control for its accounting and auditing practice. The statement describes elements of quality control and other matters essential to the effective design and implementation of the system.

Issued in October 2007 by the Auditing Standards Board, the statement supersedes all previously issued SQCSs and establishes standards and provides guidance for a CPA firm’s responsibilities for its quality control system for its accounting and auditing practice.

SQCS no. 7 requires that a CPA firm must establish a quality control system designed to provide it with reasonable assurance that the firm and its personnel comply with professional standards and applicable regulatory and legal requirements, and reports issued are appropriate in the circumstances. A quality control system consists of policies designed to achieve these objectives and the procedures necessary to implement and monitor compliance with the policies.