Contemporary aspects of quality management in audit services

Abstract

Introduction. New International Standard on Quality Management have brought significant changes to the approach to quality management in auditing activities. According to ISQM 1, auditing entities were required to develop and implement quality management systems before the standards came into effect and conduct an assessment of the effectiveness of these systems within one year of implementation. The purpose of the paper is to contribute to the development of scientific understanding and practical application of quality management in the auditing sphere to ensure the quality, reliability, and trustworthiness of auditing services. Results. According to ISQM 1, a quality management system must operate continuously and respond to changes in the circumstances of the entity and its objectives. This system has a comprehensive nature and encompasses eight key components, including the assessment of entity risks, leadership and management, adherence to ethical requirements, establishment and maintenance of client relationships and engagements, performance of engagements, resource utilization, information exchange and communication, and monitoring and remediation. The primary innovation is the risk-based approach to building a quality management system, which is based on risk assessment and includes setting quality objectives, identifying and evaluating quality risks, and developing actions to mitigate them. Quality objectives are determined by the auditing entity and must include objectives related to managing the entity, adhering to ethical requirements and independence, client and engagement acceptance and performance, and resource objectives, including human resources. Measures taken by the entity in response to quality risks may relate to the entity's activities as a whole or be specific to individual engagements. The nature, extent, and timing of these measures should be based on the results of the identified risks assessment. Conclusion. Therefore, the implementation of new quality management standards in auditing aims to enhance the quality of auditing services and ensure the reliability of financial information.