The nature of ISQM 1 drives a more bespoke approach to designing and implementing systems of quality management in firms; a ‘one-size-fits-all’ tool will not do the job, without appropriate tailoring for the individual circumstances of a practice.

Several providers have manuals, toolkits and software solutions that aim to help practices. ICAEW asked providers to explain their products to help members make a more informed decision, and this is what they said.

1. PCP ISQM Manual

Who is the product geared towards?

Small to medium sized practices.

How does it work?

The Manual comprises four sections:

• Background and Guidance on ISQM
• Risk Assessment
• Sample Policies and Procedures
• Examples Forms and Templates

Practitioners are first directed to complete the risk assessment by completing a series of questions within an excel spreadsheet. The responses to these questions are linked to the subsequent worksheets within the spreadsheet. Each Pillar within ISQM is represented by a worksheet. Practitioners are encouraged to add additional risks relating to their own practice to supplement those provided as a starting point.

This process will then highlight the potential risks within each of the Pillars and prompts, the Practitioner to consider if those risks are applicable to his practice and if they constitute a quality risk. Where a practitioner does not consider it to be a quality risk they must justify and document why they have made that decision.

How does it address the bespoke nature of the standard?

Where practitioners consider a highlighted risk to be applicable to their practice they are then directed towards the policies and procedures that would need to be adopted and applied to address the risks and any forms or templates to assist in this process. At all stages practitioners are encouraged to consider existing policies and procedures which they may already have in place or to adapt the specimen policies and procedures to suit their own personal circumstances.

Within each section of the individual Pillars, practitioners are encouraged to consider other risks which may be specific to their practice. Within each Pillar the quality objectives of each pillar have already been listed and risks identified that may relate to that objective have already been included. This ensures that it is comprehensive and that no objectives have not been addressed.

It is not a Manual in the sense that practitioners do not just fill in the blank spaces. The aim of the PCP system is that the outcome for each practitioner should be different, dependent on their responses to the initial questions and every practice will have a System of Quality Management which is unique to their circumstances. In this respect it is more of a toolkit which will assist in directing them to compiling their own specific Manual.

Toolkit, manual or software?

Manual.

Does it link to other tools/services?

The PCP ISQM Manual is a standalone product. Practitioners do not need to have any of the other products within the PCP Suite. Neither does it link in with any of the other PCP software products. The Manual has been written in Excel and Word allowing the Practitioner to amend to suit their own circumstances.

A service provider report template is included within the pack of templates and example forms and is designed to cover a range of service providers.

Support provided?

A service provider statement for PCP itself is available for those firms who request one.

If practitioners have small queries by e mail or telephone these are answered free of charge. Firms requiring more support or assistance with the production of the SOQM pay additional fees agreed based on their individual circumstances. An ISQM 1 workshop and general training on ISQM 1 can also be provided in-house.

Regarding quality management, the manual will be updated automatically free for changes arising in the first 18 months or if additional guidance becomes available. After that period, if significant changes are made to ISQM 1 or associated standards or to good practice in the future, an updated version will be produced and will be available to purchase.

Find out more:

• PCP

2. Mercia Quality Management Manual

Who is the product geared towards?

The Quality Management Manual is a fully flexible, customisable manual and toolkit suitable for all practices, from sole practitioners to large multi-partner firms.

How does it work?

The manual consists of guidance on implementing the ISQMs and several appendices to assist with application of the standards. Delivered as editable files, firms can use the manual as a starting point for putting together their own Quality Management Systems.

How does it address the bespoke nature of the standard?

Unique to Mercia's Quality Management Manual is an extensive risk assessment database with over 100 risks catalogued which are drawn from the quality objectives from ISQM 1. The database has recommended actions for each risk, which firms can implement or adapt.

Toolkit, manual or software?

Manual.

Does it link to other tools/services?

No.

Support provided?

Mercia's Quality Management Manual can be accessed through the Mercia website. From here it can be downloaded in Word, Excel and PDF format. These file formats make the manual compatible with any audit methodology or practice management system.

Find out more:

• Mercia

3. Croner-I Quality Management Tool

Who is the product geared towards? Various sizes of firm.

How does it work?

The Croner-i Navigate platform includes the resources needed to understand the requirements of ISQM (UK) 1 and document your firm’s compliance with these requirements and more. This includes:

• the Quality Management Tool, with detailed risk identification factors and integrated links to guidance and requirements;
• the standards themselves, with detailed mindmaps to help navigate the requirements;
• practical FAQs on a range of areas;
• detailed commentary and guidance from experts on the risk assessment process, components of the quality management system, evaluating and documenting the system, monitoring and remediation, networks and service providers;
• detailed coverage of ISQM (UK) 2 on engagement quality reviews;
• Croner-i’s service provider Quality Statement; and
• a wide range of forms and templates including a service provider checklist.

How does it address the bespoke nature of the standard?

The Excel-based Quality Management Tool is designed to help firms of varying sizes to identify and document relevant quality objectives, risks and responses as required by ISQM (UK) 1.

The Quality Management Tool enables users to fully meet the requirements of ISQM (UK) 1 and as it is in Excel, provides the flexibility for firms to edit and own as they wish. It can be downloaded from the Quality Management Tool page, or from the Tools area of Navigate Audit.

The Tool works through the risk assessment phase, the identification of risks, responses and mapping to quality objectives. The Tool can be easily tailored to meet the firm’s needs and includes links to relevant guidance and the specific source standard paragraphs, all within Navigate Audit.

Firms must ensure they undertake appropriate procedures to ensure the completeness of quality risks and responses. Each risk and response will reflect the nature and circumstances of the firm. The nature of ISQM (UK) 1 means this will be an iterative process from risks identified, quality objectives met and responses implemented with some risks, quality objectives and responses overlapping.

Those responsible for assessing quality risks and implementing responses must be familiar with the requirements of ISQM (UK) 1 before attempting to document this process within the Tool.

Toolkit, manual or software?

Toolkit.

Does it link to other tools/services?

Ongoing provision of general training/videos through Navigate and separate eCPD platform, but no specific helpline/direct firm support for implementation.

Support provided?

Croner-i has prepared a detailed Quality Statement, available alongside its user Terms and Conditions at the bottom of the Croner-i Navigate platform homepage.

Ongoing compliance with ISQM (UK) 1 requirements and the delivery of quality audits will be made easier by using the full suite of tax, audit and accounting resources on the Croner-i Navigate platform.

Find out more:

• Croner-i

4. Inflo QMS

Who is the product geared towards?

Inflo QMS is scalable to any firm’s size, complexity, and engagement types as required by the new standards.

How does it work?

First, Inflo QMS presents you with simple configuration questions that can assist with the initial draft of the firm’s QMS. One of the questions is whether the firm would like to apply Inflo Hybrid Intelligence (InfloHI) to recommend Risks and Responses from our Inflo Content Library. Even if the firm says no at this stage, they can still add these from the library once the QMS has been drafted.

If the firm says yes, InfloHI recommends Risks and mitigating Responses. Inflo Content Library includes Risks for all Quality Objectives mentioned in ISQM 1 and all the Risks have mitigating Responses as well. Inflo QMS allows for both one to one and many to many relationships between Risks and Responses.

How does it address the bespoke nature of the standard?

The flexibility built into Inflo QMS allows you to easily tailor your QMS to meet your firm’s precise needs. The tailoring process is accomplished through easy-to-follow customization screens.

Risks must then be assessed by the firm and scored based on their inherent likelihood of occurrence and magnitude of effect on the related Quality Objectives. Mitigating Responses will then be assigned reduction scores indicating the extent to which the responses reduce the occurrence and effect of the related risks.

After the firm’s QMS is tailored and finalised, focus moves to the monitoring and remediation process. This consists of ongoing Monitoring and Inspection activities, which will typically lead to continual modifications and refinements of the QMS. This is where a technology centric solution pays continuing dividends. Quality management activities and monitoring can occur in real time, with the resulting information automatically accumulated and shared so that it can be acted on quickly. This is in stark contrast to a ‘documents and spreadsheets’ approach which will be highly dependent on manual processes.

Toolkit, manual or software?

Software.

Does it link to other tools/services?

Inflo QMS can be used standalone, without requiring the use of any other Inflo products. Integration with Inflo Digital Audit allows firms to continue performing monitoring activities in -platform, facilitates real-time, in-flight engagement reviews and allows them to monitor Audit Quality Indicators.

Support provided?

Inflo provides several resources to support customers:

• Learn More: in-product hyperlinks to contextual guidance.
• Inflo Academy: an e-learning platform for self-paced learning.
• Inflo Know: a comprehensive resource library accessible at any time.
• In-platform ticket support: to request assistance from our dedicated support team.

Inflo is classified as a “service provider” under the definitions of ISQM 1. A comprehensive Service Provider Report is provided to customers using Inflo and satisfies the five objectives defined in relation to service providers.

Find out more:

• Inflo

5. Apex ISQM Toolkit

Who is the product geared towards?

The Toolkit is geared towards sole practitioners and smaller practices, although is being used by offices of some Top Thirty firms. It typically envisages a small number of audit partners and fewer than 100 annual audits.

How does it work?

The Toolkit consists of three Word documents at its core. Part One helps firms to consider the inbuilt quality objectives and then to ask themselves a series of questions and to identify potential quality risks. Part Two lets firms assess the risks and then apply the specified responses, with space to add additional responses if needed to address any residual risks. Part Three helps firms to document their monitoring and remediation processes.

Supporting this core, the Toolkit contains a few additional resources including a staff survey questionnaire and checklists which focus on service providers (such as for methodology, file reviews and training).

How does it address the bespoke nature of the standard?

Rather than being pre-populated with risks, the Toolkit focuses firms on likely issues that they might face within each of the six topics (leadership & governance, relevant ethical requirements etc) and asks firms to consider whether these are relevant and whether they lead to potential risks. This should lead to a bespoke list of risks and responses for each firm that completes the Toolkit.

Part Two includes a ‘one-to-many, many-to-one’ approach. Each assessed risk is numbered and these numbers are allocated against the specified responses. More than one number can be attached to each response and each numbered risk can be addressed more than once. Any numbered risks that haven’t been addressed by the specified responses will need to be addressed with further, bespoke responses.

The risks and responses can thus be tailored flexibly.

Toolkit, manual or software?

Toolkit.

Does it link to other tools/services?

The Toolkit is standalone, but Apex offers support.

Support provided?

We’ve provided several consultancy sessions to help firms complete the Toolkit and to act as a sounding board for risk and response identification.

The Toolkit checklists contain questions to ask service providers if they are unable to supply a ‘supplier quality statement’.

As a provider of file reviews and training, Apex has its own supplier quality statement.

Find out more:

• Apex

6. HAT ISQM Pack

Who is the product geared towards?

The ISQM pack is written for smaller firms, from sole practitioners to firms with around a dozen partners, reflecting our core clients.

How does it work?

The pack consists of two modules:

• Documentation to evidence the process required by ISQM (UK) 1, including detailed risk assessment and annual compliance review;
• Pro-forma documentation, which with limited tailoring forms the core of a firm’s System of Quality Management (SOQM), for example procedures to comply with the FRC Ethical Standard for auditors.

How does it address the bespoke nature of the standard?

The ISQM pack is issued in Word format with a guide on what must be completed and tailored. Firms can add additional guidance or cross-reference to existing procedures.

HAT’s risk assessment is based on, and cross-references to, the Quality Objectives in the standard and clearly signposts when responses are required.

Toolkit, manual or software?

Toolkit.

Does it link to other tools/services?

The pack can be purchased together with on demand training and an example completed risk assessment for a one-off fee from www.isqm.co.uk.

Alternatively, it can be purchased as part of our Compliance Pack which also covers Anti-Money Laundering Procedures and a Practice Assurance Framework.

HAT also provides a wide range of assignment documentation which links to and reflects the requirements of ISQM (UK) 1.

Support provided?

HAT has been supporting small and medium sized firms of accountants for nearly fifty years. Ongoing support with ISQM 1 can be provided to any firm subscribing to a package of services with HAT. A comprehensive service provider report has been drafted and will be available this month.

Find out more:

• HAT