Assessing ISQM 1 Implementation: Evidence from Two Large Public Accounting Firms in Indonesia

Yesi Febriani (Magister of Accounting, University of Indonesia, Indonesia)
Ludovicus Sensi Wondabio (Magister of Accounting, University of Indonesia, Indonesia)

The Indonesian Accounting Review
Vol. 16 No. 2 (2026): Volume 16 No 2 2026

This study evaluates the implementation of the International Standard on Quality Management 1 (ISQM 1) in two large public accounting firms in Indonesia, namely KAP ABC and KAP XYZ. ISQM 1 represents a transition from a compliance-based quality control approach toward a risk-based quality management system that emphasizes continuous improvement and proactive risk assessment. Using a qualitative multiple-case study approach, data were collected through in-depth interviews and document analysis involving quality management personnel and audit-related documentation. The evaluation is based on the eight components of ISQM 1 and analyzed using the perspectives of Signaling Theory and the Resource-Based View (RBV). The findings indicate that KAP ABC demonstrates a higher level of implementation maturity by integrating ISQM 1 into its governance structure, quality strategy, and internal capability development. In contrast, KAP XYZ tends to implement ISQM 1 primarily as a regulatory compliance mechanism aligned with global network policies. The results highlight that effective ISQM 1 implementation depends not only on regulatory pressure but also on resource readiness, management commitment, and strategic orientation.