1. Quality Management (Firm Level)
New York
December 12, 2018

2. Identification of Quality Risks
Para 22(q)
Para 31(a)
Para 31(b)
Significant individually
Reasonably possible
Quality risks (whole universe)
Identified quality risks
Significant in combination
Not reasonably possible
Not significant
No further procedures required

3. Assessment of Quality Risks
Highly Likely
Para 31
Para 32
Identified quality risks
QR3
Possibility of occurrence
QR1
QR2
May have a significant effect on the achievement of a QO
Very Significant
Effect of quality risk on quality objective (magnitude)

4. Objective of the Standard
Designing Responses
Objective of the Standard
Establish quality objectives
QO 4
QO 1
QO 2
QO 3
QO 5
QO 6
QO 7
QR 1
QR 2
QR 3
Higher
Lower
Lower
Resp. 1
Resp. 2
Resp. 3
Resp. 4
Para 32/33

5. Determining Whether a Finding is a Deficiency
Monitoring activities (Para 46)
External inspection
Other sources
Findings (Para 49)
Positive findings
Negative findings – evaluate to determine whether deficiencies exist (Para 49A)
Factors to consider: (Para A174)
Nature of finding
Design of monitoring activity
Extent of monitoring activity
Extent of findings in relation to population
If finding relates to a response:
Nature of quality risk
Other responses addressing quality risk
Indication of a trend or systemic issue
Deficiencies
Root cause
Effect of deficiencies
Remedial action (Para 50)

6. designed / not effective
Deficiencies
Objective of the Standard
Establish quality objectives
QO 4
QO 1
QO 2
QO 3
QO 5
QO 6
QO 7
QO 8
Missing QR
Missing QR
Missing QR
QR 1
QR 2
QR 3
Missing Resp.
Higher
Higher
Lower
Lower
Missing Resp.
Missing Resp.
Resp. 2
Resp. 3
Resp. 4
Missing Resp.
Resp. 1
Missing Resp.
Inadequately
designed / not effective
33. The firm shall design and implement responses to address the assessed quality risks, including the responses required by this ISQM. The design of the responses shall be based on, and responsive to, the reasons for the assessments given to the quality risks. (Ref: Para. A46–A47, A57–A62)
The red items represent deficiencies in the initial analysis:
Resp. I was found to be inadequately designed
Resp. I alone did not adequately address QR 1, therefore an additional response was added
A QR and Response were not identified / assessed / designed
QO 8, the related risks, and the related responses were omitted
Para 50