Galíndez recently held a firmwide technical seminar focused on upcoming regulatory changes and evolving quality management standards that will impact audit and assurance engagements over the next several years. The session brought together professionals across service lines to review new requirements and discuss how they translate into engagement execution and firm operations.

The seminar was led by:

• Héctor M. Vázquez, CPA – Audit Partner

• Luis Corrada, CPA – Audit Partner

• Henry Flores, CPA – Audit Partner

• Carmen Ana Lliteras, CPA – Consulting Director

• Tania Díaz, CPA – Audit Manager

• Luzmary López – Consulting Supervising Senior

• Angélica Pérez, CPA – Consulting Senior

Each presenter addressed specific areas of change, providing both technical analysis and practical application guidance.

A Risk-Based Approach to Quality Management

A central focus of the seminar was the implementation of the AICPA’s Statements on Quality Management Standards, including SQMS No. 1, SQMS No. 2, and SQMS No. 3. These standards represent a shift from a compliance-driven model to a structured, risk-based system of quality management.

Key areas discussed included:

• The three-step risk assessment process under SQMS No. 1

• Governance and leadership responsibilities, including ultimate accountability at the managing partner level

• Expanded ethical requirements and independence confirmations

• Resource management across human, technological, and intellectual areas

• Monitoring and remediation processes, including root cause analysis of identified deficiencies

The discussions reinforced that quality management is an integrated, continuous process embedded throughout the firm’s activities rather than a periodic review exercise.

Engagement-Level Quality Under SAS 146

The seminar also addressed SAS No. 146, which formalizes quality management responsibilities at the engagement level. Particular attention was given to the engagement partner’s role in:

• Taking overall responsibility for managing and achieving quality

• Ensuring appropriate direction, supervision, and review

• Confirming compliance with relevant ethical requirements before report issuance

• Evaluating whether sufficient and appropriate resources are assigned

The connection between firm-level quality systems and engagement execution was emphasized throughout the session.

Expanded Predecessor Auditor Inquiries: SAS 147

Updates under SAS No. 147 require more explicit inquiries of predecessor auditors regarding identified or suspected fraud and noncompliance with laws and regulations. The seminar reviewed:

• Required inquiries once management authorizes communication

• Documentation expectations following engagement acceptance

• Broader considerations, including management integrity, internal control matters, and disagreements with prior auditors

These updates further strengthen the acceptance and continuance process.

Group Audits and Component Oversight: SAS 149

SAS No. 149 introduces a refined, risk-based approach to group audits and clarifies the distinction between component auditors and referred-to auditors. Topics covered included:

• The group engagement partner’s responsibility for direction and supervision of component auditors

• Risk-based determination of component involvement

• Evaluation of audit evidence obtained from components

• Procedures required when referring to a referred-to auditor

The standard aligns group audit procedures more closely with the broader quality management framework.

Aligning Standards with Internal Governance

In addition to reviewing regulatory updates, the seminar included a discussion of internal governance structures and role assignments that support the firm’s system of quality management. Responsibilities across compliance, ethics, monitoring, remediation, risk management, and training were reviewed to ensure clarity and accountability.

By integrating evolving standards into its operating framework, Galíndez continues to strengthen its quality infrastructure across all service areas.

Ongoing Development

Technical standards continue to evolve, particularly in the areas of quality management, engagement oversight, and group audits. Firmwide training ensures that updates are understood consistently across all levels of the organization and integrated into engagement execution.

If you wish to access these value-driven updates and understand how recent regulatory changes may impact your organization, contact Galíndez at info@galindezllc.com or (787) 725-4545.