Who is accountable for quality in the firm
Who must carry ultimate responsibility for a firm's system of quality management under ISQM 1, who supports them, and how to show it clearly.
By Achekam · · 4 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
Ask the partners of a small firm who is responsible for quality, and the usual answer is "all of us". That is true in spirit and unhelpful in practice. When everyone is responsible, a quality problem that falls between two partners' clients, or between the technical partner and the managing partner, can go unaddressed for a long time.
ISQM 1 asks for something more precise. Quality is still everyone's business, but the firm must be clear about who is accountable for the system as a whole, who runs which parts of it, and how engagement partners carry quality on each file. Writing that down is one of the simplest and most useful steps a firm can take.
Firm-wide, with a named leader
ACCA's article on ISQM 1 explains that responsibility for quality is firm-wide, with the chief executive or managing partner assigned responsibility and accountability for the system of quality management.
That is a deliberate choice. The person accountable for the system is the person who runs the firm, not a quality officer tucked away from strategy and resources. Quality decisions often involve money and people: hiring, training, turning down a client, investing in methodology. Placing accountability at the top makes sure those decisions get made.
The IAASB describes ISQM 1 as strengthening firms' systems through a robust, proactive and effective approach. Proactive systems need someone at the top whose job includes asking whether the system is working.
Operational responsibility below the leader
The managing partner cannot run every part of the system personally, and ISQM 1 does not expect that. ACCA lists the eight components a system must address: the firm's risk assessment process; governance and leadership; relevant ethical requirements; acceptance and continuance; engagement performance; resources; information and communication; and monitoring and remediation.
In a small or medium firm, it helps to assign each component, or a group of them, to a named person:
| Component | Typical owner in a smaller firm |
|---|---|
| Risk assessment process and governance | Managing partner |
| Relevant ethical requirements, including independence | A partner designated for ethics |
| Acceptance and continuance | The partner approving new clients |
| Engagement performance and methodology | Technical partner |
| Resources: people, technology, intellectual resources | Managing partner with HR or operations lead |
| Information and communication | Practice manager |
| Monitoring and remediation | A partner not involved in the files being monitored |
The managing partner remains accountable for the whole; the others are responsible for their parts and report to the leader.
Partner involvement on each engagement
ACCA notes that ISQM 1 specifically refers to the need for the audit engagement partner to be sufficiently and appropriately involved throughout the engagement. Firm-level accountability does not replace engagement-level responsibility. The system should make it possible for each engagement partner to be involved, through realistic portfolios, time for review and access to consultation, and should check that it actually happens.
Matching roles and permissions to responsibilities
A firm's accountability chart should match what its systems let people do. In Achekam, a firm can allow or deny what each role may do, check why a member may or may not act, and grant named time and collaboration permissions per role or per person.
That makes it possible to test the chart against reality. If the ethics partner is responsible for the independence register, can they open it? If only partners should approve client acceptance, can anyone else? The "why may this person act" check is useful in a quality review: it turns a question about responsibility into an answer the firm can see. Roles and permissions covers the settings in more detail.
Registers that show who did what
Accountability needs a record. Achekam keeps a firm's quality registers, such as professional judgements, quality incidents, complaints and inspection progress, on the server with every version and who changed it. When the managing partner reviews the system, the registers show not only what was recorded but who recorded it and when it changed.
One limit to keep in mind: sign-off roles on professional judgements are checked only by the screen, not the server. The firm's own review of the register should confirm that the person who signed each judgement held the role the firm's policy requires.
A one-page accountability chart
Put it on one page:
- The person with ultimate responsibility and accountability for the system: name and role.
- The people with operational responsibility, by component, as in the table above.
- How engagement partners are supported: portfolio limits, consultation and review time.
- How the leader is kept informed: monitoring results, incidents, complaints and inspection findings, with how often.
- Who evaluates the system each year, and who receives the evaluation.
Circulate it to everyone in the firm and review it whenever roles change. Setting the objectives that each owner works towards is covered in ISQM 1 quality objectives. Draft the chart at the next partners' meeting; most firms find two or three responsibilities nobody had clearly claimed.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
