The Auditing Standards & Ethics Committee in collaboration with the Southern Regional Committee (SRC) of the Institute of Chartered Accountants of Pakistan (ICAP) has organised a seminar on Quality Management Standards issued by the International Auditing and Assurance Standards Board (IAASB) on May 25, 2022 at a local hotel in Karachi.
The seminar aimed to discuss significant changes made in the suit of Quality Management Standards (ISQM 1, ISQM 2 and ISA 220 (Revised)) and to discuss the challenges that are predicted in their implementation.
The seminar was hosted by Mr. Shaikh Ahmed Salman (FCA), CPD convenor – Technical & Professional Affairs, SRC. In the opening remarks Mr. Arslan Khalid (FCA), Council Member and Chairman, Auditing Standards & Ethics Committee expressed the importance of the seminar topic. He informed that the committee has initiated the due process for recommending the adoption of the Quality Management Standards in Pakistan and has issued exposure draft (through ICAP circular 02/2022) for member’s comments on the Quality Management Standards. He stressed that this is a significant change and members are requested to review and share comments with the Institute.
The Keynote Speakers of the seminar were Mr. Khattab Baig (FCA), Partner, A. F. Ferguson & Co.. and Mr. Zulfikar Ali Causer (FCA), Partner, BDO Ebrahim & Co who gave the overview of the ISQM 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagement and ISQM 2, Engagement Quality Reviews.
Mr. Khattab explained the significant changes made in ISQM 1 as compared to the extant ISQC 1. He emphasized that the key change made in ISQM 1 is a move from a binary, compliance-based process to a more proactive, dynamic, risk-based quality management approach. A risk-based approach now focused on achieving the quality objectives that the firm considers are necessary to achieve the objectives of the system of quality management. Firms are required to have their system of quality management designed and implemented by December 15, 2022.
Mr. Zulfikar Ali Causer (FCA), Partner, BDO Ebrahim & Co apprised that ISQM 2 is a new standard and is very focused on the role of the engagement quality review (EQR) that the person should have right authority, knowledge, and experience to perform this task. Further, ISQM 2 stressed the involvement of EQR from the beginning of the audit process till end including ensuring that the engagement team have complied with the firm level policy and procedures at the engagement level.
The presentations were followed by an interactive panel discussion. The panel included Mr. Shabbir Yunus (FCA), Partner Mazars, Ms. Moneeza Usman Butt (FCA), Partner, KPMG Taseer Hadi & Co., Mr. Muhammad Asif Iqbal (FCA), Executive Director, BDO Ebrahim & Co. and Mr. Waqas Aftab Sheikh (FCA), Partner, A.F. Ferguson & Co. participated as panelists. The panel discussion was moderated by Ms. Hena Sadiq, Partner, Yousuf Adil. The panel discussed the challenges of large, medium and small audit firms that are being faced or expected in the implementation of Quality Management Standards in Pakistan. The panel also talked about the possible solutions to deal with the challenges. The panel and the speakers also responded to the questions of the participants.
Mr. Zafar Iqbal Sobani (FCA), Past President ICAP and Chairman of Appellate Board of ICAP Was invited as a Session chairman, He emphasized that is a significant development and change for the profession and stakeholders and therefore firms leadership should set the tone at the top and understand the significance and the benefit that can be reaped by implementing the Quality Management Standards in their firms.
In the end, Mr. Farrukh Rehman (FCA), Council Member ICAP and Ms. Hina Usmani (FCA), Council Member ICAP presented memento to the worthy speakers and panelists. Mr. Osama Kapadia, Honorary Secretary SRC extended the vote of thanks to the speakers, panel and all the guests.
