Governance Briefing — October 20, 2025
Audit committees must verify firms have PCAOB QC 1000 systems-of-quality management ready before the December 15, 2025 effective date so FY2026 audits satisfy the new inspection baseline.
Executive briefing: The Public Company Accounting Oversight Board’s QC 1000, A Firm’s System of Quality Management standard becomes effective for audits of fiscal years beginning on or after 15 December 2025. Firms must document quality objectives, identify quality risks, and design responses that cover governance, ethics, resources, engagement performance, and information technology. Audit committees should demand status reports this quarter so external auditors can evidence a fully implemented system before year-end planning meetings.
Key governance checkpoints
- Oversight responsibilities. Confirm the auditor’s board-approved governance structure includes a quality-control leader with authority over risk assessments, monitoring, and remediation as required by QC 1000 Sections .12–.19.
- Quality risk inventories. Review the firm’s documented quality risks across acceptance, independence, engagement performance, and technology so committees can evaluate how responses align with issuer risk profiles.
- Annual evaluation evidence. Require delivery of the firm’s year-end evaluation plan, including triggers for timely reporting of deficiencies to audit committees under QC 1000 Section .89.
Operational priorities
- Engagement resource mapping. Ensure staffing models, use of specialists, and project management tooling are captured in the firm’s resource quality objectives ahead of FY2026 audit scoping.
- Technology controls. Validate documentation of IT applications and automated tools used in audits, along with change-management and access controls demanded by QC 1000 Appendix C.
- Monitoring cadence. Align interim inspection schedules, internal inspection documentation, and remediation timetables with PCAOB inspection cycles so deficiencies are addressed before the new standard’s effective date.
Enablement moves
- Schedule joint briefings with the auditor’s quality leadership to walk through SOQM design decisions, escalation paths, and documentation that will be shared with regulators.
- Update audit committee charters to reference QC 1000 oversight expectations and require quarterly SOQM progress reporting through FY2026.
- Coordinate with internal audit to test management’s readiness for expanded auditor information requests tied to QC 1000 monitoring and remediation activities.
Sources
Zeph Tech partners with audit committees to benchmark QC 1000 implementation progress, validate supporting evidence, and coordinate remediation follow-up ahead of FY2026 audit planning.