Audit quality isn’t just about the team on site — it begins with how an audit firm is managed. That’s the idea behind International Standards on Quality Management (ISQM 1 & 2), which South Africa adopted through the IRBA. From December 2022, every registered firm must maintain a comprehensive system of quality management. Here’s what that means for businesses choosing an auditor.
What Is ISQM?
- A framework requiring audit practices to identify and assess quality risks across leadership, ethics, client acceptance, resources, and monitoring.
- Firms must design controls, evaluate them regularly, and document results.
- ISQM 2 adds detailed rules for engagement quality reviews (EQRs) on higher-risk audits
Why It Benefits Clients
When your auditor runs on ISQM principles, you gain:
- Consistency: policies make sure every file is handled to the same high bar.
- Better staffing: firms must assign suitably skilled, independent staff.
- Early warning: internal monitoring spots issues before they affect your report.
- Confidence for boards and funders: quality oversight reduces the chance of surprises.
Questions to Ask Your Auditor
- How has your firm embedded ISQM into day-to-day work?
- Do you perform annual risk assessments on all clients?
- Who performs engagement quality reviews on my audit?
- What training do your teams undergo to maintain quality?
SC Audit’s Commitment
SC Audit has implemented ISQM across leadership, human resources, technology and monitoring. For you, that means a boutique-sized team with big-firm quality controls — ensuring your financial statements are scrutinised with independence, rigour and efficiency.
Discover how our quality-first approach can make your next audit seamless. Schedule a consultation with our partners today.
Frequently Asked Questions
What is ISQM and why does it matter to clients?
ISQM (International Standard on Quality Management) is a new framework requiring audit firms to design, implement, and operate a system of quality management. For clients, this means higher and more consistent audit quality, better risk identification, and greater confidence in the audit opinion.
How is ISQM different from previous quality control standards?
ISQM is more proactive and risk-based than prior standards. Instead of checking compliance retrospectively, firms must now identify quality risks, design responses to mitigate them, and monitor the system continuously. The focus shifts from quality control to quality management.
Does ISQM affect the cost or duration of my audit?
ISQM primarily changes how audit firms manage quality internally. While there may be some initial investment as firms implement new systems, the standard is designed to improve efficiency over time by reducing errors and rework. Clients should expect consistent quality, not necessarily higher fees.
How does SC Audit ensure compliance with ISQM standards?
SC Audit has implemented a comprehensive quality management system aligned with ISQM requirements, including regular risk assessments, engagement quality reviews, independence checks, and ongoing staff training. These processes are embedded in every engagement from planning to sign-off.
What should clients look for in an audit firm’s quality management?
Clients should ask about the firm’s quality control policies, how they handle independence and conflicts, their approach to engagement reviews, and their track record with IRBA inspections. A firm that invests in quality management demonstrates commitment to reliable, professional audits.
SC Audit is part of the Schoemans Group that includes Schoemans – Chartered Accountants in Cape Town and Acrede – Quality Auditing and Tax Consulting.