CSQM1 Quality System
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G&L - Governance & Leadership (5)
Conditions | Risk Assessment Meter | Risk Responses | Risk Assessment Explainer | Comments (Optional) |
How does the firm demonstrate a commitment to quality through its culture, recognizing and reinforcing the importance of professional ethics, values, attitudes, and strategic decisions? | Low | Commitment to Quality | Lack of a clear commitment to quality may lead to inconsistent practices and reduced quality of engagements. | Assessed as low as all inspection findings are dealt with immediately and incorporated into the firms processes. |
What are the primary leadership roles and responsibilities within the firm, and how are they assigned to ensure accountability for quality? | Low | Human Resource Risks | Misalignment of roles and responsibilities may hinder effective leadership and quality management. | Jag is the lead engagement for CSRS4200 files and ensures a commitment to Quality. |
How does leadership demonstrate their commitment to quality, and what actions and behaviors exemplify this commitment? | Medium | Commitment to Quality, Reputation and Brand Risks | Leadership's failure to demonstrate commitment to quality may affect the firm's reputation and ability to achieve quality objectives. | Jag requires that all CSRS4200 files have to go through “VerifyIQ” where it is required to have a 95% accuracy score in order to even create the CSRS4200 file in Caseware. |
How are resources, including financial resources, planned for, obtained, and allocated in alignment with the firm's commitment to quality? | Medium | Financial Risks, Human Resource Risks | Inadequate resource allocation may lead to insufficient support for quality initiatives and engagements. | Firm resources are deployed for R&D and to continuously increase the quality and brand of the firm. |
How does the firm integrate quality objectives, as outlined in CSQM 1, into its strategic decision-making process, and what evidence supports this integration? | Low | Strategic Risks, Commitment to Quality | Failure to integrate quality objectives into strategic decisions may lead to misalignment with quality goals and reduced engagement performance. | Assessed as low as the firm has a well-defined process for integrating quality objectives into strategic decisions. |
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ER - Relevant Ethical Requirement (5)
Conditions | Risk Assessment Meter | Risk Responses | Risk Assessment Explainer | Comments (Optional) |
What are the relevant ethical requirements that CPAs must follow? | Medium | Compliance with Relevant Ethical Requirements | Lack of understanding or compliance with ethical requirements may lead to legal or regulatory issues. | All CPAs of the firm are required to do CPD hours for a minimum of 4 hours a year for Ethics. |
How do relevant ethical requirements establish the fundamental principles of professional ethics, such as integrity, objectivity, professional competence and due care, confidentiality, and professional behavior? | Low | Compliance with Relevant Ethical Requirements | Misunderstanding the principles of professional ethics may lead to inconsistent ethical practices. | Firm culture is to follow High Ethics and we decline engagements after doing a complete discovery call if we feel the engagement would lead to unethical behaviours. The tone at the top is Ethics and brand image are more important then Revenue. |
Are CPAs required to be independent of the entity for a compilation engagement according to CSRS 4200 and the ethical requirements? | Medium | Compliance with Relevant Ethical Requirements, Breaches of Relevant Ethical Requirements | Failure to maintain independence may lead to conflicts of interest and impair the quality of engagements. | We only take on Independence engagements and comply with this when doing the checklists in Caseware for CSRS4200. |
How should firms handle breaches of relevant ethical requirements, including communication, evaluation, reporting, and taking appropriate actions? | High | Breaches of Relevant Ethical Requirements | Inadequate handling of ethical breaches may lead to legal consequences and damage to the firm's reputation. | Assessed as high due to the critical importance of addressing ethical breaches promptly and effectively. |
What policies or procedures should be established for dealing with complaints and allegations related to relevant ethical requirements? | Medium | Complaints and Allegations, Compliance with Relevant Ethical Requirements | Lack of clear policies may lead to inconsistent handling of complaints and allegations, potentially affecting the firm's reputation and legal standing. | All complaints are handled via feedback forms and client discussion. We have clients sign “Client Rep Letter” for every CSRS4200 file we do to ensure the client understands our ethical requirements and policies/procedures. A new Engagement letter is also collected. |
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A&C - Acceptance and Continuance (5)
Conditions | Risk Assessment Meter | Risk Responses | Risk Assessment Explainer | Comments (Optional) |
What information should be obtained about the nature and circumstances of the engagement and the integrity and ethical values of the client to support judgments about accepting or continuing a client relationship or specific engagement? | Medium | New Client Information, Compliance with Relevant Ethical Requirements | Inadequate information may lead to misjudgment in accepting or continuing a client relationship, affecting the quality of engagements. | |
How should a firm assess its ability to perform an engagement in accordance with professional standards and applicable legal and regulatory requirements before accepting or continuing a client relationship? | Medium | Compliance with Standards and Regulations | Failure to assess the ability to perform an engagement may lead to non-compliance with standards and regulations. | |
What factors should be considered to ensure that the financial and operational priorities of the firm do not lead to inappropriate judgments about accepting or continuing a client relationship? | Medium | Financial Risks, Strategic Risks | Misalignment of priorities may lead to inappropriate acceptance or continuance decisions, impacting the firm's reputation and financial stability. | |
How should a firm address circumstances when it becomes aware of information subsequent to accepting or continuing a client relationship that would have caused it to decline the engagement if known earlier? | High | New Client Information, Compliance with Relevant Ethical Requirements | Failure to address new information may lead to legal or ethical breaches, affecting the firm's reputation and legal standing. | Assessed as high due to the critical importance of timely addressing new information. |
What policies or procedures should be established to address the circumstances mentioned above, including the actions to be taken and the responsible parties involved? | Medium | Compliance with Standards and Regulations, Regulatory and Legal compliance Risks | Lack of clear policies may lead to inconsistent handling of acceptance and continuance decisions, potentially affecting the firm's reputation and legal standing. |
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EP - Engagement Performance (8)
Conditions | Risk Assessment Meter | Risk Responses | Risk Assessment Explainer | Comments (Optional) |
How can engagement teams understand and fulfill their responsibilities, including the role of the engagement partner? | Medium | Human Resource Risks, Professional Judgment and Skepticism | Lack of understanding or fulfillment of responsibilities may lead to errors in engagement performance, affecting quality and client satisfaction. | |
What factors should be considered when determining the direction and supervision of engagement teams? | Medium | Direction, Supervision, and Review, Human Resource Risks | Inappropriate direction and supervision may lead to inconsistencies and errors in engagement performance, affecting quality and compliance. | |
How can engagement teams ensure appropriate direction, supervision, and review based on the nature of the engagements and available resources? | Medium | Human Resource Risks, Resource Management | Failure to align direction, supervision, and review with engagement nature and resources may lead to inefficiencies and quality issues. | |
What steps should be taken to provide guidance and oversight to less experienced team members? | Medium | Human Resource Risks, Training and Development | Lack of guidance and oversight for less experienced members may lead to errors and inefficiencies, affecting engagement quality. | |
How can engagement teams exercise professional judgment and skepticism in their work? | High | Professional Judgment and Skepticism, Compliance with Standards and Regulations | Failure to exercise professional judgment and skepticism may lead to significant errors and non-compliance with professional standards. | Assessed as high due to the critical importance of judgment and skepticism in engagement performance. |
How should engagement teams facilitate consultation on difficult or contentious matters, and ensure that conclusions are implemented? | Medium | Consultation on Difficult Matters, Compliance with Standards and Regulations | Failure to consult on difficult matters may lead to incorrect conclusions and non-compliance with standards. | |
How should differences of opinion within the engagement team or with the engagement quality reviewer be addressed and resolved? | Medium | Resolution of Differences of Opinion, Compliance with Standards and Regulations | Failure to resolve differences of opinion may lead to inconsistencies and non-compliance with standards. | |
What procedures should be followed to ensure that engagement documentation is assembled, maintained, and retained in compliance with relevant requirements and standards? | Medium | Engagement Documentation, Compliance with Standards and Regulations | Inadequate engagement documentation may lead to non-compliance with requirements and standards, affecting quality and legal standing. |
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Resources (5)
Conditions | Risk Assessment Meter | Risk Responses | Risk Assessment Explainer | Comments (Optional) |
How does the firm identify, obtain, develop, and maintain the necessary human, intellectual, and technological resources to enable the design, implementation, and operation of the SOQM and the performance of engagements? | Medium | Human Resource Risks, Technology and Data Security Risks, Financial Risks | Inadequate identification, development, or maintenance of resources may lead to inefficiencies, errors, and non-compliance with professional standards. | |
What processes and measures are in place to ensure timely allocation and assignment of resources, including specialized expertise, to meet the needs of engagements and the SOQM? | Medium | Human Resource Risks, Third-Party and Outsourcing Risks | Failure to allocate resources in a timely manner may lead to delays, quality issues, and client dissatisfaction. | |
How does the firm assess and ensure the competence, capabilities, and experience of individuals assigned to engagements, and what training and professional development opportunities are provided? | Medium | Human Resource Risks, Training and Development | Lack of competence or training may lead to errors and inefficiencies, affecting engagement quality and client satisfaction. | |
How does the firm utilize technological resources, such as automated tools and techniques, to enhance efficiency and quality, and what policies govern their use and maintenance? | Medium | Technology and Data Security Risks, Compliance with Laws and Standards | Ineffective utilization or maintenance of technological resources may lead to inefficiencies, security risks, and non-compliance with regulations. | |
How does the firm monitor, evaluate, and address the effectiveness of resource allocation and utilization, including identifying and remedying any gaps or deficiencies? | Medium | Human Resource Risks, Monitoring and Evaluation, Continuous Assessment and Adaptation | Failure to monitor and address resource effectiveness may lead to ongoing inefficiencies, quality issues, and failure to adapt to changing needs. |
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I&C - Information and Communication (5)
Conditions | Risk Assessment Meter | Risk Responses | Risk Assessment Explainer | Comments (Optional) |
How can the firm establish clear channels of communication to ensure seamless coordination within the SOQM and engagement teams? | Medium | Communication with External Parties about the SOQM, Client Satisfaction and Retention Risks | Ineffective communication channels may lead to misunderstandings, delays, and inefficiencies in engagement activities. | |
What processes should be implemented to provide relevant information to engagement teams, enabling them to perform functions related to the SOQM effectively? | Medium | Technology and Data Security Risks, Client Satisfaction and Retention Risks | Failure to provide relevant information may hinder engagement teams' ability to perform their functions effectively and in compliance with SOQM requirements. | |
How should the firm communicate the results of monitoring activities, including deficiencies and remedial actions, to engagement teams and personnel? | Medium | Risk Assessment and Monitoring, Regulatory and Legal Compliance Risks | Ineffective communication of monitoring results may lead to repeated deficiencies, non-compliance, and lack of awareness among engagement teams. | |
What measures can be taken to ensure that engagement teams are aware of monitoring activities, identified deficiencies, and the actions taken to address them? | Medium | Risk Assessment and Monitoring, Client Satisfaction and Retention Risks | Lack of awareness may lead to repeated mistakes, non-compliance, and a lack of alignment with quality objectives. | |
How can the firm evaluate and improve communication processes to enhance the flow of information within the firm and with external parties? | Medium | Continuous Assessment and Adaptation, Reputation and Brand Risks | Failure to evaluate and improve communication processes may lead to ongoing communication issues, affecting the firm's reputation and ability to achieve quality objectives. |
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Monitoring and Remediation Process (5)
Conditions | Risk Assessment Meter | Risk Responses | Risk Assessment Explainer | Comments (Optional) |
How should the firm design and perform monitoring activities to gather relevant information about the SOQM's design, implementation, and operation? | Medium | Risk Assessment and Monitoring, Technology and Data Security Risks | Inadequate monitoring activities may lead to a lack of insight into the SOQM's effectiveness, potentially resulting in non-compliance and inefficiencies. | |
What procedures should be in place to evaluate findings and identify deficiencies in the SOQM and engagements, and ensure timely remediation? | Medium | Risk Assessment and Monitoring, Regulatory and Legal Compliance Risks | Failure to evaluate findings and identify deficiencies may lead to ongoing non-compliance and a lack of alignment with quality objectives. | |
How should the firm communicate identified deficiencies and remedial actions to relevant stakeholders, such as firm leadership and engagement partners? | Medium | Communication with External Parties about the SOQM, Reputation and Brand Risks | Ineffective communication of deficiencies and remedial actions may hinder the resolution process and negatively impact the firm's reputation. | |
What measures should be in place to facilitate continual improvement of engagement quality and the SOQM through the monitoring and remediation process? | Medium | Continuous Assessment and Adaptation, Client Satisfaction and Retention Risks | Lack of measures for continual improvement may lead to stagnation in quality and potential dissatisfaction among clients. | |
How should the firm monitor the effectiveness of the remedial actions implemented to address identified deficiencies? | Medium | Risk Assessment and Monitoring, Regulatory and Legal Compliance Risks | Failure to monitor the effectiveness of remedial actions may lead to repeated deficiencies and non-compliance with regulatory requirements. |