Audit quality review software: what accounting practices need to know

Audit quality review software is a system that plans, records and reports the reviews a firm performs to confirm its audits meet professional standards. For UK accounting practices, it supports the monitoring and remediation requirements of ISQM (UK) 1, the Financial Reporting Council (FRC) standard on quality management that took effect on 15 December 2022.

What an audit quality review covers

An audit quality review is a structured assessment of an engagement against the firm's methodology, professional standards and regulatory requirements. It tests whether the work performed supports the opinion issued and whether the firm's quality responses operated as designed.

Three activities are often grouped together but are separate under the standards:

• Inspection of completed engagements, often called file reviews, is a monitoring activity. It tests individual audits after the report has been issued.
• In-progress reviews are quality responses a firm designs to address risks before the report is issued. They are not monitoring activities.
• Engagement quality reviews are objective evaluations of significant judgements on a specific engagement. They are covered by ISQM (UK) 2 and are separate from monitoring.

Firm-level reviews sit alongside these. They test the system of quality management (SoQM) as a whole, including governance, resources, acceptance and continuance, and monitoring itself.

Under ISQM (UK) 1, the firm inspects completed engagements on a cycle it sets, and the cycle must select a completed engagement for each engagement partner.

Why spreadsheets and shared drives stop working

Many practices begin with review checklists in Word or Excel and findings in a shared drive. That approach works for a handful of reviews and breaks down as the review programme grows.

• Findings sit apart from the risks they relate to, so recurring issues stay hidden.
• Version control depends on individuals, which leaves gaps in the audit trail.
• Reviewers use different templates, so ratings are hard to compare across offices.
• Remediation actions are tracked by email, with no clear owner or due date.
• Annual SoQM evaluations require manual assembly of evidence from several sources.

Each gap makes it harder to show a regulator or an internal reviewer that monitoring led to action.

How audit quality review software works

Purpose-built software turns the review cycle into a connected workflow. The table below shows what changes at each stage and what evidence each stage produces.

Review stage	Manual approach	Software approach	Evidence produced
Planning	Reviewer selection and engagement sampling in a spreadsheet	Risk-based selection with a documented rationale	Selection record showing why each engagement and reviewer was chosen
Fieldwork	Offline checklists in Word or Excel	Standard templates completed in one system	Completed review templates with a time-stamped audit trail
Rating and findings	Ratings entered by hand and compared across files	Consistent rating scales with findings linked to standards	Comparable ratings and findings mapped to the relevant standard
Root cause analysis	Done after the fact, in separate documents	Cause recorded against each deficiency to reveal patterns	Root cause record for each deficiency
Remediation	Tracked by email and reminders	Actions with owners, due dates and status tracking	Action log showing owner, due date and completion status
Reporting	Packs assembled by hand for each audience	Firm, office and service line views generated on demand	Reports for leadership, committees and regulators drawn from one data set

ISQM (UK) 1 inspection vs engagement quality review

Inspection of completed engagements is a monitoring activity that tests whether the firm's quality responses operated effectively, and it takes place after the engagement ends. An engagement quality review, covered by ISQM (UK) 2, is an objective evaluation of the significant judgements made on a specific engagement, completed before the report is issued.

File review checklist: what to include

A file review checklist should cover planning and risk assessment, the evidence supporting key judgements, consultation, partner and manager review, completion of the audit file and whether the conclusions support the opinion. Software lets a firm hold one standard template, so ratings compare consistently across offices and reviewers.

ISQM (UK) 1 monitoring activities

ISQM (UK) 1 monitoring activities include the cyclical inspection of completed engagements and other activities that give information about the SoQM. Monitoring produces findings. Those that the firm evaluates as deficiencies go on to root cause analysis and remediation.

Features UK practices should look for

Selection criteria should follow the firm's own obligations under ISQM (UK) 1 and the size and structure of the practice.

• Alignment with ISQM (UK) 1, so quality risks, responses and monitoring activities connect in one structure.
• Support for UK and Ireland variants of the standard alongside any international framework the firm uses.
• Configurable review templates that match the firm's methodology.
• Automatic audit trail and version history for every change.
• Deficiencies linked to root causes, remediation actions and the quality risks they affect.
• Multi-office reporting so leadership can compare results across locations and service lines.
• Access controls that restrict sensitive review results to the right people.

Where smaller and mid-tier practices differ from large firms

Some larger networks may build in-house tools or run global quality programmes. Smaller and mid-tier UK practices usually have fewer dedicated quality staff, so each manual task consumes a larger share of capacity. Software matters most where the same people run reviews, track remediation and prepare the SoQM evaluation.

The practical test is time to evidence. A practice should be able to show, from one system, which reviews took place, what they found and what the firm did next.

How Ideagen Audit Quality Management supports quality reviews

According to Ideagen, Ideagen Audit Quality Management helps firms manage their System of Quality Management, replacing spreadsheet-based approaches with continuous monitoring, remediation workflows and an automatic audit trail. For the review cycle, that means standard review templates, root cause records for each deficiency and remediation actions with owners and due dates.

Frequently asked questions

What is audit quality review software?

Audit quality review software is a system that manages review planning, findings, root cause analysis, remediation and reporting for a firm's audit quality programme.

Does ISQM (UK) 1 require software?

No. ISQM (UK) 1 does not prescribe a tool. It requires a firm to monitor its SoQM and remediate deficiencies, and software is one way to evidence both.

What is the difference between a file review and an SoQM evaluation?

A file review tests an individual completed engagement. An SoQM evaluation concludes whether the system provides reasonable assurance that its objectives are being achieved. It is carried out at least annually by the individual with ultimate responsibility for the system.

Can small practices benefit from dedicated software?

Yes. Small teams carry the same monitoring and remediation obligations with fewer people, so automating tracking and reporting frees capacity for professional judgement.

How many files should be inspected?

ISQM (UK) 1 does not set a fixed number. The firm sets the cycle and scope based on its risks, but the cycle must select a completed engagement for each engagement partner.

What is a root cause analysis under ISQM 1?

Root cause analysis investigates why a deficiency happened, so the firm can design remediation that addresses the cause and not just the symptom. It is applied to deficiencies, not to every finding.

Questions to answer before you shortlist audit quality review software

Start with your current review cycle. Identify where findings, actions and evidence are lost between steps, then test each shortlisted tool against those gaps. A practice that can link every deficiency to a root cause, an owner and a completed action has evidence that supports its ISQM (UK) 1 monitoring.

Last updated: 3 November 2026