Are there Benefits in ISO 9001 for Accountancy Firms?

Accountancy firms like other organizations are continually seeking to improve the quality of their service to clients. In any approach to quality, there is a wide range of options available. One of these is the internationally renowned Quality Management System (QMS) standard better known as ISO 9001. More than one million businesses have implemented ISO 9001, which is why ISO 9001 is the global standard for managing quality. Entities can also consider other options such as Six Sigma albeit at a later stage.

ISO 9001 QMS is a systematic and process driven approach to managing day to day activities. It is designed to support the organization in ensuring that it meets the needs of its clients, whilst delivering a consistent level of quality and satisfaction.

This system has been proven to make business owners and managers feel more in control and ensure that everyone within the organisation is clear about what they do, whilst having the ability and authority to resolve problems quickly and effectively.

Accountancy firms are in an easier position to implement the standard than other sectors as international recognized professional accounting standards have been prepared to establish consistency and standardise accounting practices. The basic principle of ISO 9001 is that you state what is to be done and consistently do it and look for improvements.

The standard was first published in 1987, since then it has gone through four revisions, the latest one in 2015. The standard sets out the requirements for a QMS based around the following principles:

  • Client focus – attracting and retaining the confidence of clients is key.

  • Leadership –everyone in the business must understand what you’re trying to achieve.

  • Engagement of people –competent and engaged people at all levels are essential.

  • Process approach – to achieve more consistent results you need to understand how your processes work together as a whole.

  • Improvement – all successful businesses focus on continual improvement.

  • Evidence-based decision making – basing your business decisions on an analysis of the facts is more likely to lead to the correct decision.

  • Relationship management – identifying your most valuable business relationships and having a plan to manage them will contribute to your success.

One of the key changes in the 2015 revision of ISO 9001 is the requirement to establish a systematic approach to risk, rather than treating it as a single component of a QMS. This is of utmost importance to accountancy firms.

In previous editions of ISO 9001, a clause on preventive action was separated from the whole. Now risk is considered and included throughout the standard.

By taking a risk-based approach, an organization becomes proactive rather than purely reactive, preventing or reducing undesired effects and promoting continual improvement. Preventive action is automatic when a management system is risk-based.

The Clauses of the 2015 version of ISO 9001 are:

  1. Scope – defines how far the QMS extends within the organization

  2. Normative References – any supporting documents ie standards etc.

  3. Terms and definitions – refers to the terms and definitions given in ISO 9000:2015

  4. Context of organization – refers to the business environment

  5. Leadership – ability to motivate groups of people towards a common goal. Management should be the driving force behind the QMS.

  6. Planning – actions to address risks and opportunities

  7. Support – availability of resources needed for the implementation and maintenance of the QMS.

  8. Operation – will be dependent on the organization’s activities, legal obligations and significant operational control.

  9. Performance evaluation – monitoring, measurement, analysis and evaluation of the QMS in place.

  10. Improvement – determine and select opportunities for improvement and implement any necessary actions to meet client requirements and enhance client satisfaction.

Implementing ISO 9001

The main consideration after recognising that ISO 9001 is beneficial to your organization is to get started in implementing the standard. A word of advice at this stage is not to consider becoming certified if this is not being imposed on your organization as is the case with many manufacturing organizations. Gaining a certification is enticing, but it should not be the ultimate scope of using the standard. Organizations who view gaining certification as the reason for using the ISO 9001 are missing a great opportunity for improvement. As frequently stated, ISO 9001 is a journey, not a destination.

If you sincerely start implementing ISO 9001 as business improvement tool, then gaining certification sometime down the line, if you choose to do so, should be a simple step.

A common misconception about the ISO 9001 standard is that it is a document nightmare. Actually, there are very limited document requirements in the 2015 version of the standard. This was not the case with previous versions. The emphasis is now on documented information or records in any format and media. Also, ISO 9001 does not replace quality control documents such as ISQC 1 and ISA 220, these documents complement the QMS being implemented. In fact a quality system will be most effective for accountancy firms when the system also complies with other professional and requirements built into it, as this ensures that the ‘service product’ conforms with specified requirements.

The first step in the implementation process is to identify an individual within the organization who will champion the process. It is important that if you have not contracted an external consultant the assigned individual should be sent to an ISO 9001 orientation training course if this is his/ her first experience.

Management exercising its leadership role shall then draw out the Quality Policy, and the objectives to meet this policy.

The next step would be to define and determine the core processes of the organization; in the case of an accountancy firm these should be very clear. In my experience accountancy firms already have most of the requirements of the standard in place.

Gap Analysis follows suit. This is an important exercise which identifies the gaps between the existing system in place and the requirements of the standard. This exercise helps to bridge gaps in the system, identifies any additional resources or documented information required. This is where I advise that an external consultant should be hired to carry out the exercise.

Once this stage is reached, and the gaps identified addressed, then the implementation phase is achieved, but this is not the end of the journey. The organization has to continue looking for opportunities for improvement, through regular auditing of the system, employees’ and clients’ feedback amongst others.

Business Benefits

Implementing the ISO 9001 standard can prove a tremendous boon to business in many ways from improving equity to perfecting overall business structure by helping streamline management. An improved business ethic will encourage confidence and productivity in staff in the knowledge that they have a clear and well thought-out process to follow. Better utilisation of available time achieved through improved resource management.

In Malta, accountancy firms and similar professional services providers (of all sizes) are not only competing for market share but also for the human resources. Working in an environment where one feels that he is an asset to the organization as required by the standard can be advantageous to attract new employees. Most importantly, it improves the client/supplier relationship by responding proactively to client demands and feedback.

Finally, an ISO 9001 implementation can be achieved by any organization of any size, in any given sector, which is looking to increase and enhance business productivity, ethics and performance. If you consider that the most important person in your business is your client then you should seriously consider implementing ISO 9001.

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