At its meeting on September 14-15, 2017, the AASB provided input to the CPA Canada nominee on the International Auditing and Assurance Standards Board (IAASB) on issues related to the IAASB’s project to revise ISA 540, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures. Key issues discussed included:

• whether the threshold of low inherent risk should be retained;
• how the auditor should take the risk factors (complexity, judgment and estimation uncertainty) into account when performing the risk assessment; and
• how best to structure the requirements related to responding to risks of material misstatement.

Review the executive summary on the AASB's Web site.

At its meeting on September 14-15, 2017, the AASB discussed issues related to the CASs on auditor reporting, including:

• the effective date and scope for key audit matters reporting;
• possible implications of disclosing the engagement partner’s name in the auditor’s report; and
• other options to pursue if the proposal to create a combined U.S. and Canadian auditor’s report is not accepted by the U.S. Securities Exchange Commission.

The Board will continue to discuss these and other issues at a future meeting.

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At its meeting on September 14-15, 2017, the AASB provided input to the CPA Canada nominee on the IAASB on issues related to the IAASB’s project to amend ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment, including:

• new and revised definitions for terms such as “internal controls”, “controls” and “significant risk”;
• proposed changes to the definitions of the five components of internal controls; and
• identification and assessment of the risk of material misstatement, in particular the separation of the requirements relating to the assessment of inherent risk and the assessment of control risk.

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At its meeting on September 14-15, 2017, the AASB provided input to the CPA Canada nominee on the IAASB on issues related to the IAASB’s project to revise ISQC 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements. Key issues discussed included:

• whether to retain the requirement to have an engagement quality control review for all audits of financial statements of listed entities, or whether such reviews should be required only for audits of general purpose financial statements of listed entities;
• whether the proposed requirement for the firm to establish policies and procedures to select other engagements to have an engagement quality control review will result in the appropriate selection of high-risk engagements; and
• the eligibility and appointment of the engagement quality control reviewer, including specific considerations for small and medium-sized practitioners.

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At its meeting on September 14-15, 2017, the AASB discussed the IAASB’s project to revise ISRS 4400, Engagements to Perform Agreed-upon Procedures Regarding Financial Information. The Board reviewed and deliberated:

• the feedback received in response to the IAASB’s Discussion Paper, “Exploring the Demand for Agreed‐Upon Procedures Engagements and Other Services, and the Implications for the IAASB’s International Standards”; and
• the project proposal to revise ISRS 4400.

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At its meeting on September 14-15, 2017, the AASB discussed issues identified in developing a revised standard to replace Section 9200, Compilation Engagements, including:

• the scope of the revised standard;
• the conditions leading to acceptance of a compilation engagement; and
• the terms of the engagement.

The Board also discussed the Compilation Engagement Task Force’s proposal to conduct an online survey to seek feedback on the scope of the revised standard. The Board supported the proposal, provided input on the survey’s target audience and reviewed the proposed survey questions. This survey will be conducted by the end of 2017.

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At its meeting on September 14-15, 2017, the AASB received an update on the activities of the Public Sector Auditing Standards Review Task Force, including:

• planned outreach activities related to the Exposure Draft of AuG-49, Reporting on Compliance with Specified Authorities for Transactions Coming to the Auditor’s Notice during the Audit of Financial Statements; and
• the need for guidance related to performance audits in the public sector conducted under CSAE 3001, Direct Engagements.

The Board supported the Task Force’s activities to develop guidance related to performance audits.

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At its meeting on September 14-15, 2017, the AASB reviewed revisions resulting from comments received on the re-exposure of proposed CSAE 3530, Special Considerations — Attestation Engagements to Report on Compliance, and CSAE 3531, Special Considerations — Direct Engagements to Report on Compliance. Key comments discussed included:

• the relationship of proposed CSAE 3530 and CSAE 3531 with CSAE 3000, Attestation Engagements Other Than Audits or Review of Historical Financial Information and CSAE 3001;
• the reporting requirements relating to:
  
  • an informative summary of the work performed; and
  • a statement that the engagement is not a legal analysis;
• the requirement to obtain management acknowledgement that the criteria and significant interpretations developed for the engagement are appropriate; and
• an issue arising due to French translation of the terms “significant” and “material”.

The Board will continue to discuss these and other issues at its next meeting.

Review the executive summary on the AASB's Web site.

At its meeting on September 14-15, 2017, the AASB reviewed the Securities Regulations Advisory Group’s (SRAG) proposal to revise Section 7500 by expanding the scope of Section 7170. The AASB agreed with the SRAG’s proposed approach, including the proposed scope of documents addressed by the expanded Section 7170.

Review the executive summary on the AASB's Web site.