Governance and leadership is of paramount importance to quality management as it affects the perception received from its leadership, staffs, clients and ultimately the public. Governance and leadership serves as framework for how the firm’s decisions are made.
ISQM 1 has new and enhanced requirements regarding the firm’s commitment to quality through its culture. The requirements now also address:
- The firm’s public interest role;
- The importance of professional ethics, values and attitudes;
- The responsibility of all personnel for quality relating to the performance of engagements or activities within the system of quality management and their expected behavior; and
- Quality in the context of the firm’s strategic decisions and actions, including the firm’s financial and operational priorities.
The new requirements also address the below:
- Leadership’s behavior and commitment to quality and their accountability for quality;
- The organizational structure of the firm and the firm’s assignment of roles, responsibilities and authority; and
- Resource needs and resource planning, allocation and assignment which also include financial resources.
How the Firm Demonstrates a Commitment to Quality through its Culture
The firm may embed a commitment to quality through several mechanisms and actions as the following:
A smaller firm may be able to establish the desired culture of the firm through the direct interaction of the firm leadership with other personnel, which is not always possible in the case of a larger firm.
