Compliance Briefing — December 16, 2024
Audit firms have one year to operationalise PCAOB Quality Control Standard QC 1000, demanding documented governance, risk assessment, and monitoring over audit engagements by December 15, 2025.
Executive briefing: The Public Company Accounting Oversight Board (PCAOB) adopted Quality Control Standard QC 1000 on May 13, 2024. The standard becomes effective for fiscal years ending on or after December 15, 2025, giving registered firms 12 months to design and implement a modern quality management system covering governance, risk assessment, resources, engagement performance, and information processes.
Key compliance checkpoints
- System design. QC 1000 requires a quality objectives–risk–response approach tailored to firm size and practice lines, replacing prescriptive QC Section 20.
- Annual evaluations. Firms must perform yearly evaluations of the quality management system, with the CEO and CCO providing a certification to the PCAOB.
- Monitoring activities. Inspection, internal review, and root cause analysis procedures must feed remediation plans tracked to completion.
Control alignment
- Integrate with ISQM 1. Global networks should harmonise QC 1000 responses with the IAASB’s International Standard on Quality Management 1 to avoid duplicative controls.
- Technology enablement. Deploy workflow tools that capture risk assessments, policy approvals, training completion, and engagement metrics.
- Talent management. Document competency and capacity assessments for partners and specialists, aligning with QC 1000’s resource component.
Enablement moves
- Establish cross-functional implementation teams spanning audit methodology, independence, HR, and IT.
- Map existing inspection findings and PCAOB remediation orders to QC 1000 objectives to prioritise control design.
- Prepare governance committees for annual certification, including evidence packages, dashboards, and issue escalation paths.
Sources
Zeph Tech guides audit firms through QC 1000 transitions, integrating quality risk assessments, governance certifications, and remediation tracking across engagements.