Understanding The New Quality Management Standards. Are Just Around the Corner – Are You Ready?
- BryMar Crew
- Aug 26
- 3 min read
The New Quality Management Standards Countdown is On
By December 15, 2025, CPA firms performing financial statement audits must be fully operational System of Quality Management Standards (SQMS) in place. This change—rooted in the Statements on Quality Management Standards (SQMS)—represents one of the most significant updates to audit and attest practice quality in decades.
For firms, especially sole practitioners and small-to-midsized practices, the transition can feel daunting. However, with thoughtful planning and use of available resources, compliance can become not just a requirement—but a marker of quality that strengthens your practice.
From SQCS No. 8 to SQMS No. 1: What’s Changing
Previously, firms operated under the Statement on Quality Control Standards (SQCS) No. 8. While functional, this framework was more policy-based and less focused on risk responsiveness.
The new Statements on Quality Management Standards (SQMS) shift the focus to a proactive, risk-based approach that requires firms to continuously identify, assess, and respond to risks.
SQMS No. 1: Requires firms to design, implement, and operate a system of quality management tailored to their specific risks.
SQMS No. 2: Requires an annual evaluation by firm leadership to determine whether the SOQM is effective.
SAS No. 146: Aligns engagement-level quality management with SQMS No. 1.
SSAE No. 23 / SSARS No. 26: Bring attest and review engagements into alignment with the new framework.
Key Steps for CPA Firms
1. Identify Risks
Each firm must evaluate risks unique to its size, structure, and practice areas, such as:
Dependence on a small group of partners
Reliance on technology or third-party providers
Gaps in staff training and development
Industry concentrations that could affect independence
2. Tailor Risk Responses
Responses must be practical and specific. For example:
If staffing is limited → strengthen engagement quality reviews.
If IT risks are high → enhance vendor due diligence and cybersecurity protocols.
3. Implement Across 8 Components
SQMS No. 1 identifies eight components firms must address:
Governance and leadership
Ethical requirements
Client acceptance and continuance
Engagement performance
Resources (people, tech, and methodologies)
Information and communication
Monitoring and remediation
Risk assessment
4. Monitor and Evaluate Annually
By December 15, 2026, firm leadership must perform a documented evaluation of whether the SOQM is achieving quality objectives (SQMS No. 2).
Resources from the AICPA
The AICPA has created tools designed to save firms time:
Interactive Practice Aid (free): Includes a companion risk-and-response library.
Executive Summaries & At-a-Glance Guides: Concise resources for each QM standard.
Comparison Tool (SQCS 8 vs. SQMS): Highlights key changes and what to do now.
A&A Focus Broadcasts: Live and recorded training opportunities.
👉 Explore more here: A Journey to Quality Management
Why This Matters for Peer Review
The transition to SQMS is more than a compliance exercise—it directly impacts your peer review outcomes. Peer reviewers will evaluate not only whether you’ve adopted a system, but whether it’s appropriately tailored to your firm and operating as intended.
A “boilerplate” SQMS won’t meet expectations.
Weak monitoring or risk-response documentation could result in deficiencies or findings during your peer review.
Firms that begin early and leverage AICPA resources will be better positioned for a smooth peer review process.
How BryMar CPA Supports Firms
At BryMar CPA, we specialize in peer review services. We don’t build your SQMS—but we evaluate it against industry standards, providing the independent, objective assessment required.
👉 Schedule a peer review consultation with BryMar CPA today. We’ll provide the independent evaluation you need to move into the new quality management era with confidence.