CPA firms’ work did not end when they developed their Quality Management Documents (QMDs). Now that firms subject to the AICPA’s Statements on Quality Management Standards have implemented their systems, the focus shifts to making sure those systems work in practice. CAMICO recommends treating the QMD as a living operating framework rather than a static compliance document. Firm leadership should establish clear accountability, assign qualified individuals sufficient authority and resources, and ensure quality-management requirements are reflected in everyday activities such as engagement acceptance, independence, consultation, supervision, and engagement quality reviews (EQRs).

Ongoing monitoring and remediation are central to that effort. Firms should test whether policies are actually being followed and achieving their intended objectives, use risk-based engagement inspections, distinguish isolated errors from broader systemic deficiencies, investigate root causes, and assign and track corrective actions. EQRs should likewise have clearly defined criteria and be performed by reviewers with appropriate competence, capacity, authority, and objectivity. CAMICO also stresses practical, recurring training and communication so employees understand how quality-management requirements apply to real situations rather than simply knowing what the written policies say.

Ultimately, firms should continually refine their QMDs as their services, staffing, technology, client mix, workflows, regulatory environment, and identified risks evolve. Repeated findings, consultation failures, inconsistent EQR performance, or other recurring problems may indicate that the firm's documented processes no longer fit its operations. By continually monitoring performance, addressing root causes, updating risk assessments, and adapting their systems accordingly, firms can better maintain quality, demonstrate accountability, and manage professional liability risks.

Want the full discussion, including additional detail on governance, EQR timing, and remediation practices? Read the complete article, "Risk Management in the New Quality Management Era: Practical Lessons for CPA Firms."

By Duncan B. Will, CPA/ABV/CFF, CFE. This article is adapted from CAMICO's IMPACT newsletter.

CAMICO is a Platinum Partner in COCPA’s Preferred Partners program, which connects members with vetted providers across accounting-adjacent services. Learn more about CAMICO and COCPA’s full partner network on the Preferred Partners page.