New approach to quality management proposed by ASB

By Ken Tysiac

A new approach to quality management was ushered in Thursday by the AICPA Auditing Standards Board (ASB), which issued an exposure draft of three interrelated proposed standards.

The proposed standards are designed to bring important changes to the way firms will manage quality in their accounting and auditing practices. The standards the ASB is proposing:

  • Include a new, proactive, risk-based approach to quality management systems within firms.
  • Are designed to improve the scalability of standards because the risk-based approach promotes a system tailored to the nature and circumstances of an individual firm and its engagements.
  • Are based on the International Auditing and Assurance Standards Board’s quality management standard.
  • Use the terms “quality management” instead of “quality control,” and “engagement quality review” instead of “engagement quality control review.”

“As the environment in which practitioners provide services becomes ever more diverse and complex, it has become more important than ever for firms to tailor their quality management processes to their individual circumstances, in order to maintain and enhance audit quality,” Tracy Harding, CPA, chair of the ASB, said in a news release. “Our proposed revisions to quality management provide firms with a framework for developing a quality management system that addresses each firm’s unique practice, and the framework is converged with international standards so that firms performing engagements under those standards and GAAS can use a consistent approach to quality management.”

The ASB is proposing the creation of a new quality management section in the AICPA Professional Standards. The proposal would supersede Statement on Quality Control Standards No. 8 and SAS No. 122, as amended, Section 220, Quality Control for an Engagement Conducted in Accordance With Generally Accepted Auditing Standards.

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Ken Tysiac ( is the JofA’s editorial director.

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