Narrative of the Second Workshop for the Implementation of International Standards on Quality Management

«In the end, the great economy is to choose the best, even if it seems to cost much, for it costs less than any inferior article in the long run.» – William James.

On November 5th, 2025, at the Asociación Mexicana de Contadores Públicos, 13 accounting firms concluded the Workshop for Compliance with the International Standards of Quality Management. (ISQM)

This initiative represents a comprehensive response to the challenge faced by accounting professionals engaged in performing audits, reviews of financial statements, other assurance, or related services engagements—whether practicing individually or through firms—to establish functional, current, and above all, effective and efficient Quality Management Systems (QMS).

Although it is the conviction of this professional organization that all its associates comply with the implementation of a QMS, for the adoption and use of this useful and fundamental set of methodologies and work tools, consolidated in a Quality Management System, supporting the response that it adopted at the time to the International Federation of Accountants (IFAC), to effectively respond to the professional strengthening of auditing and accounting in general.

Focusing on ISQM-1, which applies to firms and sole practitioners performing the engagements described above, the standard requires the development, implementation, operation, and maintenance of a Quality Management System whose objectives are “to ensure that the firm and its personnel comply with professional standards, legal and regulatory requirements” (1), and that the reports issued are appropriate to the circumstances. (1)

The standard (ISQM-1) is integrated of eight interrelated “components”, each one will be introduced below and containing considerations and requirements that firms must meet unless they are not applicable due to the nature or circumstances of the Firm or its engagements.

Each of these considerations and requirements must be translated into “QUALITY OBJECTIVES” through a methodology shared during the workshop. To achieve them, Firms must propose documents, develop, formalize, and implement policies, procedures, manuals, guides, tools, controls, formats, or even processes that affect engagement execution. This tailored set of tools constitutes the firm’s QMS, designed with a scalable and proportional approach based on the firm’s structure, complexity, and types of engagements, among other aspects of particularization.

(1).- Apt 14, paragraphs “a” y “b” ISQM-1

To address the previous point, the workshop began by showing the participants a methodology for the organization and development of an organizational manual, which formed the basis of the QMS.

Initially, “Risk Assessment Process”, aims to identify and evaluate “quality risks” that may affect the firm’s ability to achieve its objectives. It represents the core of the risk-based approach, incorporating a dynamic and continuous cycle of risk identification, evaluation, response design, implementation, and review.

Subsequently, “Governance and Leadership”, assigns to firm leadership the responsibility for engagement quality and for fostering a culture of quality throughout the organization. Participants were instructed to assume ownership of the QMS, promote ethical values, independence, transparency, accountability, and continuous improvement.

Then, “Relevant Ethical Requirements”, focuses on integrating ethical principles into the QMS, including integrity, objectivity, professional competence, confidentiality, professional behavior, and independence. Policies and procedures for monitoring compliance and reporting violations were emphasized to the workshop participants.

After that, “Acceptance and Continuance of Client, Relationships and specific Engagements”, establishes proactive controls to ensure that firms only accept engagements they can perform with quality, based on documented evaluations of client reputation, fraud risks, environmental factors, and firm capabilities.

The subsequence phase, Engagement Performance, ensures that engagements (Perform Audits or Reviews of Financial Statements, or Other Assurance or Related) are planned, executed, supervised, reviewed, and documented in accordance with professional standards, firm policies, and regulatory requirements. Other aspects also considered here include the designation of Engagement Partners, clear levels of supervision and review, as well as criteria and controls that ensure appropriate professional and technical competence, the necessary scopes, sufficient and adequate documentation and evidence, and even an understanding of expected responsibilities. This is so that, with the above considerations, the participating firms develop the policies, procedures, and operational manuals appropriate to the engagements they perform, their specific circumstances, and their scalability and capacity.

They were presented with the concept that the next component, «Resources», aims for participants to develop instruments to ensure that the firm allocates, develops, maintains, and utilizes the necessary resources (human, technological, intellectual, and financial) to effectively design, implement, and operate its QMS. Consequently, the participating firms designed the criteria and tools to actively manage resources in an adequate, achievable manner, and aligned with the control of quality risks. Among the tools developed were, for human resources: Policies for recruiting, training, evaluating, and motivating personnel, ensuring their technical competence, proper assignment, alignment with ethical and accountability standards, and performance evaluations. They designed tools to ensure technological resources are properly allocated, sufficient technological infrastructure is in place, along with data protection and confidentiality policies. For intellectual resources, they focused on developing updated methodologies and practical knowledge bases with access to consultants when circumstances require. They also addressed the adequacy of material and financial resources, establishing effective budgeting, allocation, and review conditions.

In the prior stage, «Information and Communication,» the participating firms incorporated into their manuals policies and procedures to ensure that relevant, timely, and high-quality information, both internal and external, is identified, captured, processed, and distributed to support the effective design, implementation, and operation of the QMS. This involves accurate, complete, organized, and protected information, even through technological tools, disseminated in all directions for critical information flows, but via secure and controlled channels.

To conclude with final component, the «Monitoring and Remediation Process,» which through ongoing evaluation ensures the QMS functions effectively in practice and is continuously improved by promptly identifying and correcting deficiencies or weaknesses. This process is performed periodically, at least annually, across the entire system based on findings from monitoring activities, root causes of deficiencies, and regulatory, operational, and technological changes in the environment. Participants were shown how to identify relevant indicators, conduct real-time reviews, analyze complaints and claims for corrective action follow-up. These activities are performed by competent and independent personnel, who must implement the following considerations that participants were asked to formalize monitoring to identify issues, root cause analysis, design of corrective actions, verification of monitoring activities, and incorporating the results of risk assessment feedback and system review.

Participants were also informed of additional obligations when firms belong to or use a network, requiring alignment in ethics, methodologies, client acceptance criteria, and monitoring processes.

The integration of the quality regulatory framework, composed of three standards established by the International Auditing and Assurance Standards Board (IAASB) for entry into force as of December 15th, 2022: “International Standard on Auditing 220” (ISA 220) “Revised”, which addresses Quality Management for an Audit of Financial Statements, meaning it focuses on the execution of engagements and the individual responsible for their performance; ISQM-1 (International Standard on Quality Management 1), which «addresses the firm’s responsibility to design, implement and operate a system of quality management» (2); and ISQM-2 (International Standard on Quality Management 2), which «addresses the appointment and eligibility of the engagement quality reviewer, and the performance and documentation of the engagement quality review» (3).

At the conclusion of the Workshop, the participating firms presented their Quality Management Systems (QMS) as the expected final product. The commitments regarding review and follow-up, the schedule and methodology for implementation, and the explanations of the scope, integration, operation, and content of the ISQMs (International Standards on Quality Management) yielded the anticipated results. Furthermore, follow-up, guidance, and support actions were established, which will continue to strengthen the ongoing evolution of these systems.

(2).- Apt 1, ISQM-1

(3).- Apt 2 paragraph “b”, ISQM-1, and ISQM-2 “Engagement Quality Reviews”