The CSSF released its ISQM1 implementation thematic report
The International Standard on Quality Management 1 (“ISQM 1” or the “Standard”) which deals with an audit firm’s responsibilities to design, implement and operate a system of quality management for audits or reviews of financial statements, or other assurance or related services engagements, entered into force on 15 December 2022 for the design and implementation part.
In 2023, the CSSF studied how the approved audit firms implemented this Standard:
- through a survey launched in September 2023 and for the purpose of which a questionnaire was submitted to and received from 49 approved audit firms, and
- by analysing the implementation of the system of quality management and examining the risk assessment process for 10 firms in scope of the CSSF 2023 quality inspection campaign.
The study not only provides with key takeaways resulting from these analyses but also emphasises on the requirements of ISQM 1 dealing with Network Requirements or Network Services.
In addition to the survey, the CSSF focused its work during its 2023 inspection campaign on the risk assessment process and the design and implementation of responses, highlighted best practices for each component of ISQM 1 and identified the points to be monitored and the areas for improvement on which the CSSF will focus from 2024 onward.
The report may be used by audit firms for benchmarking purposes and by audit committees to gather information about how audit firms manage quality.
A full version of the report is available here below: