QM standards: It’s not too late to make sure you’re on time
June 3, 2024 | Faye Hayhurst, CPA
A gentle reminder: Dec. 15, 2025, will be here before you know it.
This is the date by which every firm with an accounting and/or auditing (A&A) practice must have a system of quality management designed and implemented.
The new quality management standards represent a sea change in that they require firms to approach their A&A practice from a whole new perspective. That perspective can be summarized as:
- Identifying risks to achieving quality.
- Designing responses to mitigate those risks.
This new perspective has new requirements, and firms will need to invest some time to wrap their heads around what they need to do. To ensure you’ll be ready by the deadline, now is a good time to start the process!
Yesterday was a great time to start understanding the process. Today is the next best option. Here are some digestible chunks to keep you on track. Keep in mind, depending on the circumstances and complexity of your firm, these times are estimates.
- Team meeting No. 1: Gather your senior A&A people — including at least one partner-level person — and establish a team or task force and an overall leader/champion. Emphasize the importance of the process and assign everyone on the team to read SQMS 1 and explanatory material.
- Time commitment: 1 hour.
- Have the team leader complete the “SQMS 1 Responsibilities and Understanding the Firm” template for discussion with the team.
- Time commitment: 2 hours.
- Everyone reads SQMS 1 and explanatory material on their own.
- Time commitment: 2-3 hours.
- Team meeting No. 2: Gather the team to talk about highlights from the standard or anything that stood out from what they read. Consider watching the MNCPA May 2024 webinar on SQMS 1 together.
- Time commitment: 2-3 hours.
- Team meeting No. 3
- Introduce the team to the AICPA practice aid and template.
- Review “understanding the firm” template completed by the leader.
- 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.
- Time commitment: 2 hours.
- 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.
- Time commitment: 2-4 hours per component.
- Team meeting No. 4: Review the work on each component, modifying for additional input
- Time commitment: 2-3 hours.
Then what?
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.
There are additional pieces to figure out prior to implementation, like reviewing the firm’s engagement quality review process in light of SQMS 2 and the monitoring and remediation process for changes needed to follow the requirements of SQMS 1. But these can wait until closer to the deadline.
Review the firm calendar for less busy times when the meetings and the work related to SQMS can be scheduled. By starting now — in the summer of 2024 — the firm will be on track and have the mental mindset to be fully compliant by that ever-nearing deadline.
Topics: Accounting & Auditing
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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