AICPA Releases New Quality Management Standards
June 6 Update: The AICPA Auditing Standards Board and Accounting and Review Services Committee have collectively released four new quality management standards designed to improve a CPA firm's risk assessment and audit quality.
The AICPA says that the new standards modernize quality control and reflect new realities in practice, such as an increased emphasis on risk assessment, changes in technology and the growing use of external service providers. The four standards are:
- Statement on Quality Management Standards (SQMS) No. 1, A Firm's System of Quality Management
- SQMS No. 2, Engagement Quality Reviews
- Statement on Auditing Standards (SAS) No. 146, Quality Management for an Engagement Conducted in Accordance with Generally Accepted Auditing Standards
- Statement on Standards for Accounting and Review Services (SSARS) No. 26, Quality Management for an Engagement Conducted in Accordance with Statements on Standards for Accounting and Review Services
The new standards are effective Dec. 15, 2025, and the AICPA suggests firms begin the implementation process now. To learn more, visit the AICPA’s resource page on quality management. The AICPA has also developed a four-part webinar series to guide practitioners on the changes.
May 12: The AICPA Auditing Standards Board (ASB) recently approved new quality management standards intended to increase a firm's risk assessment and audit quality.
The ASB voted to approve three standards, and the Accounting and Review Services Committee is expected to approve a fourth. The four standards to be released in June are:
- Statement on Quality Management Standards (SQMS) No. 1, A Firm's System of Quality Management
- SQMS No. 2, Engagement Quality Reviews
- Statement on Auditing Standards (SAS) No. 146, Quality Management for an Engagement Conducted in Accordance With Generally Accepted Auditing Standards
- Statement on Standards for Accounting and Review Services (SSARS) No. 26, Quality Management for an Engagement Conducted in Accordance With Statements on Standards for Accounting and Review Services
The new standards signal a shift from a policies-based approach to a risk-based approach in audit and assurance quality with a focus on increasing firm leadership responsibilities and accountability. Among other things, the standards address technology, networks and the use of external service providers and the importance of monitoring the flow of information internally and externally. In addition, the standards promote proactive monitoring of quality management systems and timely remediation of any deficiencies. The standards are also designed to assist the engagement partner in determining the level of oversight needed throughout an engagement as well as the amount of work they can delegate to other parties.
The ASB quality management standards align, adapted as appropriate for nonissuers in the United States, with those of the International Auditing and Assurance Standards Board (IAASB). IAASB's quality management standards take effect Dec. 15, 2022.
Implementation of the ASB standards is required by Dec. 15, 2025, for firms that perform engagements in accordance with the Statements on Auditing Standards, Statements on Standards for Accounting and Review Services, and Statements on Standards for Attestation Engagements.