Risk Based Approach of ISQM -1 : Building High Quality Audit Firms in Bangladesh and Restoring Trust

The presentation on International Standard on Quality Management (ISQM) 1 by SK Ashik Iqbal FCA CPA (USA) highlights a major shift from traditional quality control to a proactive, risk-based quality management system for audit firms. Effective from December 2022, ISQM 1 requires firms to identify quality objectives, assess risks, and design tailored responses for sustainable audit excellence. The standard comprises eight components, including governance, ethics, client acceptance, engagement performance, resources, communication, monitoring, and firm-wide risk assessment. Surveys by CSSF and ICAEW show that ISQM implementation enhances audit quality, stakeholder confidence, accountability, and long-term operational efficiency, though challenges include resource constraints, training needs, and resistance to change. For Bangladeshi firms, ISQM 1 is crucial in restoring public trust through ethical leadership, client due diligence, consistent audit performance, and strong monitoring mechanisms. IFAC and IAASB offer extensive guidance for implementation and evaluation. The approach ensures firms meet professional and regulatory standards while adapting quality management systems to their size and complexity. Ultimately, ISQM 1 strengthens audit integrity, fosters continuous improvement, and enhances confidence in the profession globally.