ExpertHard1 markMultiple Choice
CPA · Question 10 · Area I: Ethics & General Principles
Under the Quality Management standards (SQMS 1 / QM Section 10), a CPA firm must establish a risk-based approach to quality management. Which of the following is a NEW component introduced by SQMS 1 that was not explicitly a component in the previous QC standards?
Under the Quality Management standards (SQMS 1 / QM Section 10), a CPA firm must establish a risk-based approach to quality management. Which of the following is a NEW component introduced by SQMS 1 that was not explicitly a component in the previous QC standards?
Answer options:
A.
Governance and Leadership.
B.
Information and Communication.
C.
Engagement Performance.
D.
The Firm's Risk Assessment Process.
How to approach this question
.
Full Answer
D.The Firm's Risk Assessment Process.✓ Correct
The Firm's Risk Assessment Process.
SQMS 1 introduced 'The Firm's Risk Assessment Process' as a distinct component, requiring firms to proactively identify and respond to quality risks. 'Human Resources' was broadened to 'Resources'.
Common mistakes
Confusing old QC elements with new QM components.
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