AICPA proposes changes in quality management standards


The American Institute of CPAs is proposing to revise its quality management standards to take a more risk-based approach targeted at the types of engagements performed by the CPA firm.

The AICPA’s Auditing Standards Board issued an exposure draft Thursday of a set of three interrelated proposed standards to address how CPA firms should manage the quality of their accounting and auditing practices. The AICPA said the changes would improve the scalability of the standards and promote a system tailored to the firm and its engagements.

The proposed changes come at a time when the Public Company Accounting Oversight Board has also proposed changes in its quality management standards for auditing firms. The PCAOB proposals use as a starting point the quality management standards issued by the International Auditing and Assurance Standards Board last year. While their standards would apply to public companies, the AICPA’s could be used by private companies seeking assurance on their financial statements. Increasingly auditing standards take more of a risk-based approach to target them better and allow them to be used more efficiently.

“As the environment in which practitioners offer services becomes more diverse, it’s more important than ever for CPA firms to tailor their quality management processes to their circumstances and maintain and enhance audit quality,” said AICPA Auditing Standards Board chair Tracy Harding in a statement. “Our proposed revisions to the quality management standards offer CPA firms a framework for developing a quality management system that addresses each firm’s practice. The framework is converged with international standards so that firms performing engagements under those standards and generally accepted auditing standards (GAAS) use a consistent approach to quality management.”

The exposure draft aligns with the IAASB quality management standards. The proposed changes include using the term “quality management” instead of “quality control” and “engagement quality review” instead of “engagement quality control review” in the current standards.

The three proposed standards are:

  • Proposed Statement on Quality Management Standards (SQMS) A Firm’s System of Quality Management
  • Proposed SQMS Engagement Quality Reviews
  • Proposed Statement on Auditing Standards (SAS) Quality Management for an Engagement Conducted in Accordance with Generally Accepted Auditing Standards

The proposed standards would supersede Statement on Quality Control Standards No. 8, as well as create a new quality management section in the AICPA Professional Standards and supersede SAS No. 122, as amended, section 220, Quality Control for an Engagement Conducted in Accordance with Generally Accepted Auditing Standards.

The AICPA is asking for feedback on the proposed standards by June 11. Comments can be sent to

The Auditing Standards Board plans to start addressing the feedback it receives at its July 26-29 meeting, and devote the entire Aug. 11 meeting to further consideration of the comments.

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