Taking back control with quality management.

• Author: Love, Holly C.

In a time when so few things feel in control, a documented plan to maintain quality can bring some sense of order to tax practices of all sizes. Particularly as firms contemplate what "the future of work" may look like, including the possibility of employees working remotely, a common understanding among partners and employees of the expectations for operating with a quality mindset becomes even more impactful. This column offers practical suggestions that firms can use to implement a system of quality management.

The emphasis on quality management in a tax practice is certainly not new. Treasury Circular 230, Regulations Governing Practice Before the Internal Revenue Service (31 C.F.R. Part 10), Section 10.36, imposes a requirement to take "reasonable steps to ensure that the firm has adequate procedures in effect for all members, associates, and employees" and places this responsibility, subject to discipline, on the individuals who have "principal authority and responsibility for overseeing a firm's practice governed by this part." The spirit of this responsibility is echoed in Circular 230, Section 10.33, which sets forth best practices for tax advisers and states:

Tax advisors with responsibility for overseeing a firm's practice of providing advice concerning Federal tax issues or of preparing or assisting in the preparation of submissions to the Internal Revenue Service should take reasonable steps to ensure that the firm's procedures for all members, associates, and employees are consistent with the best practices set forth in ... this section.

For its part, the AICPA is currently considering the inclusion of quality management in the Statements on Standards for Tax Services (SSTSs) (available at future.aicpa.org). Although most CPAs would say quality management is already a cornerstone of the profession, it is not an enforceable standard and not applied consistently. Some firms and practitioners have robust written or well-known and practiced standards to ensure quality in their work, while others have little to no established policies, which puts them, their staff, and their clients at risk.

Adding quality management to the SSTSs would reinforce the significance of consistent tax practice quality management and clarify AICPA members' responsibility for the quality of tax work.

The AICPA is seeking feedback on its proposal to include quality management in the revised SSTSs. An email address for comments is provided at the end of this column.

The quality management standards that are being considered for tax work would differ from the AICPA's Statements on Quality Control Standards (SQCS) (A Firm's System of Quality Control), which are issued by the AICPA Auditing Standards Board and are only applicable to audit and attestation engagements performed by CPA firms.

Designing and maintaining a system of quality management

The remainder of this column focuses on broad principles that tax practices should consider when implementing a quality management system. Quality management, like so many other areas of practice management, is not (1) a one-size-fits-all proposition or (2) static. How a firm approaches quality management logically depends on the profile of the firm, taking into account factors such as:

* Number of professionals;

* Location of its professionals (e.g., everyone working in one office, everyone working in multiple offices, virtual workers, or anything in between);

* Knowledge and experience of personnel; and

* Specific practice areas.

Tax practice leaders should anticipate the...