{"id":9659,"date":"2023-04-21T10:57:23","date_gmt":"2023-04-21T05:27:23","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=9659"},"modified":"2025-03-29T14:40:38","modified_gmt":"2025-03-29T09:10:38","slug":"what-is-the-audit-quality-maturity-model-aqmm","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/what-is-the-audit-quality-maturity-model-aqmm\/","title":{"rendered":"What is the Audit Quality Maturity Model (AQMM)?"},"content":{"rendered":"<h2><strong>Why in News?<\/strong><\/h2>\n<ul>\n<li>The Institute of Chartered Accountants of India (ICAI<strong>) has mandated the firms to undertake audit quality maturity evaluation through AQMM w.e.f. 1st of April 2023.<\/strong>\u00a0<\/li>\n<li>The mandate covers the firms auditing (a) A listed entity; (b) Bank other than a co-operative bank (except multi-state co-operative bank); or (c) an Insurance Company.<\/li>\n<li>Those firms which are conducting only branch audits are excluded from this mandate.\u00a0<\/li>\n<\/ul>\n<h3>About Audit Quality Maturity Model (AQMM):<\/h3>\n<ul>\n<li>It is a tool <strong>for the self-evaluation of audit firms<\/strong> &amp; sole proprietors towards technologically driven mechanisms to increase operational efficiency.\u00a0<\/li>\n<li>AQMM is an <strong>amalgamation of a well-researched set of Audit Quality Indicators (AQIs).<\/strong><\/li>\n<li>It is a <strong>cross-functional evaluation model<\/strong> covering key areas of not only audit engagements but also audit practice at the firm level.<\/li>\n<li>It <strong>includes operations of the firm<\/strong>, viz. <strong>revenue budgeting and pricing, audit practice manual, budgeting of engagements<\/strong>, timesheet, use of technology adoption, quality control for engagements, <strong>Human Resource Management<\/strong> including resource planning and monitoring, performance evaluation and compensation, physical and IT infrastructure.<\/li>\n<li>The AQMM model <strong>is structured into 3 sections with a total score of 600 points<\/strong>,\n<ul>\n<li><strong>Practice Management (Operation<\/strong>);<\/li>\n<li><strong>Human Resource Management<\/strong>;<\/li>\n<li><strong>Practice Management -Strategic\/Functional<\/strong>;\u00a0<\/li>\n<\/ul>\n<\/li>\n<li>Based on the score(s) obtained under each of the sections, <strong>the firm shall arrive at a level ranging from Level 1 to 4.<\/strong><\/li>\n<li>While <strong>Level 1 depicts that the firm is very nascent, Level 4 indicates that the firm has made significant adoption<\/strong> of standards and procedures.\u00a0<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3>Key facts about Institute of Chartered Accountants of India (ICAI):<\/h3>\n<ul>\n<li>It is a <strong>statutory body<\/strong> established by an Act of Parliament, viz. <strong>The Chartered Accountants Act, 1949.<\/strong><\/li>\n<li><strong>Mandate<\/strong>: <strong>Regulating the profession of Chartered Accountancy in the country;<\/strong> Formulation of Accounting Standards; and Prescription of Standard Auditing Procedures.<\/li>\n<li>It functions under the <strong>administrative control of the Ministry of Corporate Affairs<\/strong>, Government of India.<\/li>\n<li>The affairs of the ICAI are <strong>managed by a Council which comprises of 40 members<\/strong>, of whom 32 are elected by the Chartered Accountants and the remaining 8 are nominated by the Central Government.\u00a0<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<hr \/>\n<h3>Q1)\u00a0What is auditing?<\/h3>\n<p>Audit is the examination or inspection of various books of accounts by an auditor followed by physical checking of inventory to make sure that all departments are following a documented system of recording transactions. It is done to ascertain the accuracy of financial statements provided by the organisation.<\/p>\n<p><strong>Source:<\/strong>\u00a0<a href=\"https:\/\/www.financialexpress.com\/industry\/icai-focuses-on-enhancing-audit-quality\/3056323\/\" target=\"_blank\" rel=\"nofollow noopener\"><u>ICAI focuses on enhancing audit quality<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Audit Quality Maturity Model is a tool for the self-evaluation of audit firms &#038; sole proprietors .<\/p>\n","protected":false},"author":5,"featured_media":9660,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-9659","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/9659","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=9659"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/9659\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/9660"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=9659"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=9659"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=9659"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}