CSQM and QMG Cloud – What’s in it for you?
We’ve compiled a selection of frequently asked questions about quality management, along with information on resources and tools that can be of assistance to you.
1. Why is quality management so important?
Quality management is important for firms because it helps them focus on their firm’s governance and the business processes needed to deliver high quality engagements in an efficient manner. With the new Canadian Standard on Quality Management (CSQM) 1, the focus is really on the firm’s quality risks and how these risks can be mitigated. This is a great opportunity to understand why certain policies and procedures are in place, to evaluate whether they are, in fact, needed, and what changes may be possible.
2. What is CSQM 1 and how does it affect me?
CSQM 1 introduces a risk-based approach for firms to achieve quality objectives. The approach is grounded in a risk assessment that identifies quality risks specific to firms and the engagements they perform. CSQM 1 requires firms to design, implement and operate a system of quality management (SOQM). This risk-based approach to quality management is a transformational change from the previous standard.
It’s worthwhile noting that CSQM 1 applies to all engagements for which there are standards in the CPA Canada Handbook – Assurance, which include related services such as compilation engagements. There are, in fact, a suite of quality management standards for practitioners and firms.
The suite of standards to read include the following:
- CSQM 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements
- CSQM 2, Engagement Quality Reviews
- Canadian Auditing Standard (CAS) 220, Quality Management for an Audit of Financial Statements
Conforming amendments to other CASs have been made as these quality management concepts are being integrated more deeply into new standards development.
3. When are the quality management standards effective?
Important implementation timelines are as follows:
I. firms providing assurance services (e.g., audits, reviews, 3000-series engagements)
- December 15, 2022: New quality management standards became effective – firms are expected to have designed and implemented an SOQM for assurance engagements.
- December 15, 2023: The first full cycle of monitoring, remediation and evaluation of the system of quality management for assurance engagements is completed.
- If your firm provides assurance services, you may now be looking at monitoring and remediating findings related to your SOQM. Evaluating findings and identifying deficiencies will help you prepare for the next quality management cycle.
II. firms providing related services (e.g., compilations, agreed-upon procedures engagements)
- December 15, 2023: New quality management standards become effective – firms are expected to have designed and implemented an SOQM for related services engagements.
- December 15, 2024: The first full cycle of monitoring, remediation and evaluation of the SOQM for related services engagements is completed.
4. What resources are available to assist with CSQM?
There are some great free resources available! They include:
I. How to get started
- Implementation tool to assist practitioners implement CSQM 1
- Webinars on the new quality management standards:
II. Related services firms (including compilations, agreed-upon procedures engagements)
III. Assurance firms
- Audit & Assurance Alert: Changing responsibilities under CSQM 1, CSQM 2, and CAS 220
- Audit & Assurance Alert: Moving from quality control to quality management
Refer to the quality management guidance resources webpage for additional information.
If your firm needs additional support, CPA Canada has just launched the digitized quality management platform, QMG Cloud, which replaces the Quality Management Guide (QMG) on Knotia. It contains content for assurance and related services (e.g., compilations) firms.
Looking for information about the compilation engagements standard, CSRS 4200?
Additionally, the Practice Management, Advisory, Compilations and Tax guide (PACT) has a streamlined approach for firms that are only performing related services, including compilation engagements.
5. What’s the difference between QAM, QMG on Knotia and QMG Cloud?
The Quality Assurance Manual (QAM) was developed to comply with the previously applicable quality control standards. To help firms comply with the new quality management standards, the QMG on Knotia was launched last year to replace the QAM and provide guidance and practice aids for the new standards. However, these practice aids were comprised of Word and Excel spreadsheets and our subscribers were concerned that using these manual forms would result in inconsistencies, errors and inefficiencies. To mitigate these concerns, the QMG was digitized. In a digital world, data can automatically flow from form to form, reducing transfer errors. As a result, the QMG Cloud was born and replaces the QMG on Knotia. QMG Cloud has the same content but presented in a more user-friendly platform and with a lot more features.
When you’re using technology, there are a lot of cool opportunities for new features and tools. For example, the “Dashboard” view created in QMG Cloud is an exciting feature, where you can see key information about your system of quality management at a glance rather than having to search through files (e.g., the number of quality risks, findings, the status of documentation, review notes).
6. How is QMG Cloud different from the QMG on Knotia?
CPA Canada spent more than a year developing QMG Cloud with its software partner Auvenir. The goal was to provide subscribers with a platform to utilize the QMG methodology in a more user-friendly, intuitive and practical way. QMG Cloud is more than a compliance tool; it can help your firm be as efficient as possible in meeting your quality objectives.
QMG Cloud is based on the content and methodology found in the QMG on Knotia. When developing QMG Cloud, we thought about how firms would develop, maintain, monitor, remediate and evaluate their SOQMs and what pain points might exist along the way. This helped guide the workflow and development of additional features to make QMG Cloud more than strictly a method of documenting compliance with the quality management standards.
7. How was QMG Cloud developed?
CPA Canada worked very closely with its software partner, Auvenir, to transform the QMG content into a user-friendly software. As CPAs, we never thought we would find ourselves debating graphical user interfaces in our day-to-day jobs, but the goal was to develop the best possible product for QMG Cloud users. We are still gathering feedback and brainstorming new features to further enhance the quality management process.
Consideration was given to who would be using the QMG Cloud and knowing that CSQM 1 is applicable to firms performing related services and those performing assurance engagements, we thought a lot about what firms with fewer external resources and specific client focus areas might need. It was therefore very important that the platform is scalable for firms of all sizes, from sole practitioners to firms with multiple locations across the country.
8. Who provided input and feedback when developing QMG Cloud?
A call was put out to firms across the country requesting them to provide their input and feedback. It was great to hear directly from the practitioners who will use the platform to find out what they liked, what didn’t quite work, and how QMG Cloud could keep getting better.
9. What was the objective in creating QMG Cloud?
The objective was to create an easy-to-use platform that not only helps firms comply with CSQM 1, but also helps with their efficiency. Reflecting on our experience in public practice, it was always a challenge to find anything; there never seemed to be a central repository with all the documents needed because they were stored in many different places. The hope is that QMG Cloud can help solve this problem. If you use QMG Cloud as a central hub to store everything related to your firm’s system of quality management, you can be sure you’re pulling your firm’s most up-to-date information. Since the platform is accessed via a web browser, instead of a LAN or local drive, it’s also easier to collaborate with others within the firm. As more firms sign up, we’ll continue to gather feedback and learn about ways to improve and make the most out of QMG Cloud.
10. Why should I subscribe to the QMG Cloud?
If you are spending too much time checking that content was properly copied, references are correct, and information didn’t go missing, or tired of having multiple versions of forms, figuring out where and how to store everything and want to make the most out of the quality management process, then QMG Cloud is a very helpful solution. QMG Cloud removes the “manual labour” involved with the QMG so firms can spend time where it matters – on thinking about their quality risks, policies and procedures, and monitoring and remediation. Although firms may see the quality management process as a compliance exercise, there are operational benefits too in identifying gaps and eliminating confusion, duplication or redundancy in your processes.
KEEP THE CONVERSATION GOING
In the spirit of CSQM 1, we are looking to continually improve QMG Cloud, so we want to hear from users! Are there areas of improvements, additional features, or other suggestions that could help enhance QMG Cloud? Let us know here.
The views and opinions expressed in this article are those of the author and do not necessarily reflect that of CPA Canada.