The American Institute of Certified Public Accountants (AICPA) has issued four new quality management and risk assessment standards for auditing private companies. These standards will go into effect December 15, 2025 — just over a year from now. That means time is running out for firms to update their risk processes and systems.
Not quite ready yet? We can help your firm prepare for the upcoming changes. Below, we’ll briefly review each new standard — then explain how tailored risk solutions can help your teams improve risk assessment during the pre-audit stage.
The 4 new quality standards
Strong accounting policies are obviously fundamental to compliance and quality management. But without reliable processes and tools to support the monitoring and enforcement of those policies, employees are more likely to make mistakes when conducting audits or evaluating new business for independence.
An engagement partner might think a spot check is sufficient, for example, when in actuality, a full review is required. Or a team might begin an audit without realizing that the audit required pre-approval from the audit committee. These kinds of errors can result in costly fines or regulatory penalties during inspections.
To help firms improve risk assessment and audit quality, the AICPA’s Auditing Standards Board (ASB) and Accounting and Review Services Committee (ARSC) issued four new auditing standards, summarized below:
Statement of Quality Management Standard No. 1
Accounting firms must establish quality objectives and implement a quality management system and a risk-based assessment process that meet these objectives.
Statement of Quality Management Standard No. 2
Before appointing an engagement quality (EQ) reviewer, accounting firms must determine whether the reviewer is eligible to address the firm’s engagement performance quality management objective.
Statement on Auditing Standards No. 146
Accounting firms must ensure their engagement partners and engagement teams are providing proper quality management for audits at the engagement level.
Statement on Standards for Accounting and Review Services (SSARS) No. 26
SSARS No. 26 enhances certain concepts related to quality management for engagements and ensures that these concepts are consistent between the auditing standards and SSARSs.
So how can your firm improve its risk assessment process and comply with these new standards?
5 solutions built to help your firm comply
When it comes to updating your firm’s processes, tailored risk solutions — supported with trusted AI — are the key.
Intapp Compliance offers integrated, AI-powered software to help accounting professionals efficiently assess risk during the pre-audit stage. From quickly surfacing potential conflicts to easily tracking audit clients, independence requirements, and regulated activity, your teams can effectively manage and demonstrate firm compliance. And by collecting data from new clients and surfacing potential issues, Intapp Compliance helps professionals quickly and accurately determine which engagements they can perform quality audits for.
Unlike generic risk solutions, Intapp Compliance is industry-tailored to support your accounting firm’s unique risk assessment processes. Users can create dynamic workflows and forms based on their firm’s needs, as well as standardize and automate processes such as due diligence and approval routing.
A key factor to a successful audit is a firm’s audit acceptance process. Intapp Compliance handles this successful setup in the following ways:
Pre-audit and during audit
- Intapp Intake Capture risk-related information about a potential client to help determine whether to take on the engagement.
- Intapp Conflicts Easily search, analyze, and resolve potential conflicts of a potential engagement using proprietary and third-party data. audit
- Intapp Employee Compliance Review employees’ financial interests and outside activities before taking on an engagement to ensure compliance with your firm’s ethical policies.
During audit
- Intapp Terms Enforce guidelines and requirements from the contract or engagement letter during the audit.
- Intapp Walls Manage and control access to your firm’s data to protect sensitive information during the audit.
Don’t wait to update your firm’s risk and compliance processes. Invest in the right technology now so your teams can more accurately evaluate new business, highlight potential conflicts, and conduct successful audits that meet the AICPA’s quality management standards.
Schedule a demo and learn more about Intapp technology for accounting.