Quality Management Review

Quality Management Review is the procedure through which IKM, by means of the Quality Management Committee, verifies the quality of the accounting services and other services provided by its members. It is based on Law No. 10091, the Statute of IKM, Regulation No. 5 “On Quality Management Review and the provision of assurance for services performed by Certified Accountants”, as amended by the General Assembly on 3 October 2026, International Standard on Quality Management 1 (ISQM 1) and IFAC’s Statement of Membership Obligations (SMO) 1. Its aim is to improve the overall quality of the services provided by Certified Accountants and Accounting Firms, in the interest of clients and the public.

Scope of the review

The review assesses whether the member has designed, implemented and put into operation a system of quality management that provides reasonable assurance that the member and the member’s personnel fulfil their responsibilities in accordance with professional standards and legal requirements, and that reports, financial statements and other engagement products are appropriate in the circumstances. It covers all eight components of the system under ISQM 1: the risk assessment process; governance and leadership; ethical requirements; acceptance and continuance of client relationships; engagement performance; resources; information and communication; and monitoring and remediation of deficiencies.

In practice, the Review Team assesses:

• the system of quality management across the eight components, using a risk-based approach;
• compliance with the applicable accounting standards, with the Code of Ethics, including independence and conflicts of interest, and with legal and regulatory requirements;
• the sufficiency and appropriateness of engagement documentation and, on that basis, the quality of engagement products;
• the human, technological and intellectual resources used and the fees charged;
• the member’s own annual evaluation of its system and the operation of its process for monitoring and remediating deficiencies.

The requirements are applied in a scalable manner: IKM members do not perform statutory audits, so the form and formality of their systems are considerably simpler than those of audit firms, and requirements that do not relate to the member’s circumstances — for example those on organisational structure for a sole practitioner without staff — are documented as not applicable and assessed as such by the Review Expert. For employed Certified Accountants, who do not carry out independent practice, the review has a limited scope: fulfilment of membership obligations, compliance with the Code of Ethics, responsibility for the preparation of financial statements, where it exists, and knowledge of the requirements for the prevention of money laundering.

The review is carried out at the member’s premises, at IKM’s offices or by electronic communication.

Selection and cycle

The selection of members for review combines cyclical and risk-based elements; any member may be selected, regardless of the outcome of the risk analysis. The review is carried out:

• within three years of the member’s registration with IKM;
• once every five years for each member, after the first review;
• every three years for members who prepare financial statements for public interest entities.

On the basis of the risk analysis, reviews may be carried out more frequently. Risk factors include the number of clients that are public interest entities, previous investigations and disciplinary proceedings, complaints accepted for examination (only as a selection factor, with no consequences unless verified), years of experience, the results of previous reviews and non-fulfilment of Continuing Professional Development, as well as significant changes in the member’s structure or client portfolio. At least once a year, the Quality Management Committee proposes to the Managing Council for approval the list of members to be reviewed, the list of members with engagements with public interest entities, the list of Review Experts and the review timetable. The selection of working files — at least two for each member — is based on the declaration of files that members submit by 31 March each year.

Review Experts

Reviews are carried out by Review Experts, Certified Accountants who are members of IKM, selected by the Quality Management Committee according to criteria approved by the Managing Council: at least five years of membership, regular participation in Continuing Professional Development, no disciplinary measures, knowledge of professional standards and the ability to exercise professional judgement. Selection takes place in two stages — the list of members who meet the requirements, and random selection from within it — with conflicts of interest checked for each review; members of the Managing Council, the Quality Management Committee, the Investigation Committee and the Disciplinary Committee may not be appointed as Review Experts. The Experts receive specific training on ISQM 1 and ISQM 2 and, for each review, sign a confidentiality declaration and a conflict of interest declaration.

For each review, a Review Team Leader is appointed, who oversees the performance of the review, leads the closing meeting with the member and prepares the report.

How the review is conducted

1. Notification and planning. The member is notified of the review according to the timetable of the Annual Programme approved by the Managing Council. The Review Expert has the right to request any necessary information and uses the questionnaires of the Quality Management Review Manual.
2. Examination. The Review Team assesses the system of quality management, the selected working files and compliance with the standards and the Code of Ethics. For each significant deficiency, the Team examines the root cause analysis performed by the member, or documents the possible causes and asks the member to complete the analysis.
3. Closing meeting. At the end, the Team’s results, conclusions and recommendations are discussed, together with the type of report to be issued.
4. Report. The Team Leader prepares the preliminary report and submits it to the Quality Management Committee, which reviews it and sends it to the member. The member has 15 days to submit objections to the findings and conclusions. The final report, together with the objections and the member’s Action Plan for addressing the deficiencies, is sent to the Committee, which prepares the final assessment for the Managing Council.
5. Decision. Only the Managing Council formalises the conclusions of the review and requires the implementation of the recommendations. For breaches that are subject to disciplinary measures, the Managing Council refers the file to the Investigation Committee.

The reviewed member submits a written response to the recommendations, with the Action Plan and the implementation deadline, which is agreed between the member, the Review Team and the Committee. A copy of the report is sent to the member and a copy is kept in IKM’s archives.

Assessment

The result of the review is expressed in one of the following four grades:

• Very good — the findings are not material.
• Good — minor deficiencies; the Review Experts recommend corrective actions.
• Satisfactory — significant deficiencies; substantial improvements are recommended within one year.
• Poor — the deficiencies require a disciplinary process.

The detailed criteria for each grade, with the corresponding thresholds and indicators, are drawn up by the Quality Management Committee, approved by the Managing Council and published on this page.

Re-review and follow-up

A member who has received an assessment other than “Very good” may request a re-review, at least six months after the date of the final assessment; the re-review also covers services and engagements performed after the previous review. For members assessed as “Satisfactory” or “Poor”, a procedure verifying the implementation of the Action Plan is carried out in the following year, with two possible outcomes: the recommendations have been fulfilled or have not been fulfilled.

Appeal

Within ten days of the close of the process, the member has the right to appeal the Review Report to the Quality Management Committee. Within 15 days, the Committee holds a meeting with the member and the Review Experts, notified at least ten days in advance, and presents its decision, with specific proposals, within five days after the meeting. If the member does not attend, the appeal is examined on the basis of the documentation submitted.

Confidentiality

The review respects professional secrecy. Making engagement files available is based on the member’s professional duty and right, recognised by the Code of Ethics, to disclose information for the purposes of quality review by the professional body; the service contract with the client contains a clause providing for the possibility of making the file available to IKM for quality review purposes, while for existing contracts, until they are renewed, the member obtains the client’s written authorisation in advance where it is required. Review reports are internal IKM documents; the overall results are published each year in summary form and without names.

Public reporting

The Quality Management Committee reports each year to the Managing Council and the General Assembly. No later than 30 June of the following year, IKM publishes a summary annual report on the results of Quality Management Review — statistics on the reviews and their results, the main areas for improvement, progress compared with previous reviews — without naming individuals or firms. A copy of the report is made available to the Public Oversight Board.

For questions about Quality Management Review, IKM staff are available to help at ikm.alb@gmail.com or through the Contact page.