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MNCPA PERSPECTIVES

QMS: The countdown continues

Dec. 15, 2025, deadline is closing in

April 25, 2025  |  Faye Hayhurst, CPA

QMS: The countdown continues If your firm performs A&A work, you have likely heard by now about the Quality Management (QM) Standards, which introduce a new framework and system around achieving quality in these engagements.
 
When the QM standards were approved in 2022, the standard-setters graciously allowed three and a half years for firms to learn the standards and implement them. That deadline of Dec. 15, 2025, is now just months away. Any firm performing services that require a peer review must be prepared to incorporate the standards by the deadline.
 
Firms should allow plenty of time to understand the standards and do the design work because QM represents a sea change in how quality is approached.

Consider this implementation strategy

  1. Team meeting No. 1: Gather your senior A&A people — including at least one partner-level person — and establish a team or task force with an individual identified as the overall leader/champion. Emphasize the importance of the process and assign everyone on the team to read SQMS 1 and explanatory material.
    1. Time commitment: 1 hour.
  2. Everyone reads SQMS 1 and explanatory material on their own.
    1. Time commitment: 2-3 hours.
  3. Review QM CPE options and identify courses and who will take them. (Optional)
    1. Courses available through the MNCPA. Search the catalog using the terms “QM” or “New quality”
  4. Team meeting No. 2: Gather the team to talk about highlights from the standard or anything that stood out from what they read or from the CPE. Identify questions or issues for follow up.
    1. Time commitment: 2-3 hours.
  5. Leader/champion completes the MNCPA practice aid, “SQMS 1 Responsibilities and Understanding the Firm.” (Optional)
    1. This practice aid, developed by the MNCPA, is not required but can document the firm’s fulfilling of certain SQMS requirements.
  6. Team meeting No. 3
    1. If the MNCPA practice aid is completed, share with the team.
    2. Introduce the team to a risk template obtained from the AICPA (for AICPA members) or other third-party practice aid provider.
    3. Assign individuals to work on each of the six components requiring risk assessment using the AICPA template and the firm’s current policies as responses.
    4. Time commitment: 2 hours.
  7. Individuals work on their assigned components and check in with the team leader as needed. Instruct individuals to highlight any risks for which they believe a new or modified firm policy is necessary.
    1. Time commitment: 2-4 hours per component.
  8. Team meeting No. 4: Review the work on each component, modifying as needed based on additional input.
    1. Time commitment: 2-3 hours.
After meeting No. 4, take a break from the process for the team to reflect on the work so far. The team will likely need to revisit the process several times prior to implementation.

Visit the MNCPA Quality Management standards resource page

Final steps

  1. Firms are already required to have a policy regarding which engagements require a quality review by someone outside the engagement team (EQCR policy). SQMS 2 changes the name of this process to engagement quality review (EQR) and has requirements for who can perform this review, timing of it and what must be documented. Review your firm’s policy to ensure it complies with the new standards.
  2. The monitoring element of the current quality control standards has been changed to a monitoring and remediation process under QM. Compare the firm’s current policy against the new standard; revisions likely will be required.
  3. Under QM, quality management is considered an ongoing process that will require remediation and adjustments as unaddressed risks are uncovered or as the firm’s practice changes. Set a timeframe for the first review of how the system is working. A documented review of the system, signed off by the firm’s managing partner, must be completed no later than one year after implementation.

Feeling overwhelmed by the process?

  1. Get help from a peer reviewer.
    1. Contact the firm’s peer reviewer to see if they are available to provide consultation.
    2. Use the AICPA’s reviewer search and select, “I am a firm looking for an outside party…” and then, “consulting related to a firm’s system of quality management,” under specific services.
  2. Take CPE
    1. Standalone courses.
    2. Series of short webinars covering various components.
  3. Confer with other CPAs
    1. Reach out to colleagues you know.
    2. Contact me at fhayhurst@mncpa.org, using the subject line, “QM Roundtable,” if you are interested in joining an online group to compare notes and questions.

Topics: Accounting & Auditing, Practice Management

Faye Hayhurst, CPA

Faye Hayhurst is the MNCPA director of finance and administration. She is committed to using numbers to tell relevant stories, although she also employs words, charts and occasionally clothing to communicate a message. While some have questioned her about the pressures of being the CPA for the MNCPA, Faye considers presenting financial information to fellow CPAs a dream job. Outside of storytelling with numbers, Faye enjoys directing her church's handbell choir, visiting national parks and other scenic places, and checking out the chocolate products at Trader Joe's. Faye can be reached at 952-885-5540 or fhayhurst@mncpa.org.

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