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Assurance

AASB Discussion Paper – Exploring Standard-Setting Options for Audits of Less Complex Entities

Sep 10, 2021

On September 10, 2021, the Auditing and Assurance Standards Board (AASB) issued a Discussion Paper to obtain stakeholder input on options that might be explored in Canada to address the challenge of applying the CASs to audits of less complex entities. Comments are requested by December 10, 2021.

Review the press release and Discussion Paper on the AASB's website.

Audit committees “lose independence” the longer they serve

Sep 07, 2021

Study finds committees in troubled firms have fewer female members, more outside directorships, greater shareholdings and longer tenures.

As the UK moves towards reform of audit regulation there is now much research focused on the work of company directors overseeing the work of auditors. Not all of it comes with good news. A fresh examination of audit committees suggests those whose companies have been hit by scandals possess characteristics that some observers might call deficiencies.

Review the article on the Board Agenda's website.

Audits of Less Complex Entities Consultation: Supplemental guidance on auditor reporting & mapping documents published

Sep 03, 2021

On September 3, 2021, the International Auditing and Assurance Standards Board (IAASB) published new documents related to its open consultation on the audits of less complex entities.

The documents include:

  • Proposed supplemental guidance on auditor reporting to provide further guidance on modifications and other changes to the auditor’s report when using the proposed standard; and
  • “Mapping” documents to help users navigate between existing, equivalent International Standards on Auditing and the requirements in the newly proposed International Standard on Auditing for Less Complex Entities (ISA for LCE).

Review the press release on the IAASB's website.

CPAB Exchange: Technology in the audit

Sep 01, 2021

On September 1, 2021, the Canadian Public Accountability Board (CPAB) released a publication discussing how it sees promise in the use of technology to elevate the quality of audits.

CPAB Exchange: Technology in the audit explores the opportunities and emerging challenges associated with the use of technology in audits. We also describe our expectations of audit firms as the use of technology comes to represent a more significant component of the audit effort.

Review the publication on the CPAB's website.

IAASB outreach plan for audits of less complex entities consultation published

Aug 31, 2021

On August 31, 2021, the International Auditing and Assurance Standards Board (IAASB) published a targeted outreach plan to continue to drive engagement and solicit feedback on its public consultation on a proposed new standard for audits of financial statements of less complex entities (LCE).

This plan details the IAASB’s focused efforts to facilitate feedback from different stakeholder groups through roundtables, presentations and other related activities. The plan is expected to evolve and will continue to be updated as events and activities are added or confirmed.

The landmark proposed new standard for audits of financial statements of less complex entities responds to demands to have a set of high-quality audit requirements tailored for the needs of less complex entities. The proposed new standard aims to provide a globally consistent approach at a time where several jurisdictional-specific less complex entities standards or related initiatives are arising.

The IAASB strongly encourages all interested stakeholders to provide their feedback on the proposed standard by January 31, 2022. The standard is relevant to users of financial statements, owners, management and those charged with governance of entities, preparers of financial statements, legislative or regulatory authorities, relevant local bodies with standard-setting authority, professional accountancy organizations, academics, regulators and audit oversight bodies, and auditors and audit firms, among others.

Review the press release and outreach plan on the IAASB's website.

Guidance on extended external reporting assurance engagements in Canada

Aug 03, 2021

On August 3, 2021, the Auditing and Assurance Standards Board (AASB) issued non-authoritative guidance to support Canadian practitioners’ use of the IAASB’s "Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Extended External Reporting (EER) Assurance Engagements" in Canada, applying Canadian Standard on Assurance Engagements (CSAE) 3000.

Extended External Reporting (EER) includes information about the financial and non-financial consequences of an entity’s activities.

In April 2021, to support EER assurance engagements, the International Auditing and Assurance Standards Board (IAASB) published its Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Extended External Reporting (EER) Assurance Engagements (EER Guidance).The EER Guidance responds to key challenges commonly encountered on EER assurance engagements.

The AASB decided to use the IAASB’s EER Guidance to support Canadian practitioners applying Canadian Standard on Assurance Engagements (CSAE) 3000 to EER assurance engagements.

Review the resource on the AASB's website.

CAQ Alert: Illegal Acts: The External Auditor’s Responsibilities

Jul 26, 2021

On July 26, 2021, the Center for Audit Quality (CAQ) released a resource, "Illegal Acts: The External Auditor’s Responsibilities", to educate users of financial statements on the auditor’s responsibilities in regards to illegal acts under PCAOB auditing standards and how they differ from the auditor’s responsibilities as it relates to fraud.

Recent global corporate fraud scandals such as those related to Wirecard in Germany and Carillion in the United Kingdom have driven a focus by capital market participants on the auditor’s role in identifying and detecting fraud. Certain audit regulators, including the International Auditing and Assurance Standards Board (IAASB) and the Public Company Accounting Oversight Board (PCAOB) have taken action with respect to fraud.

The publication provides an overview of the external auditor's responsibilities with respect to illegal acts and how they differ from fraud, outlining key differences and providing illustrative examples of each.

Review the publication on the CAQ's website.

IAASB public consultation opens for proposed new standard for audits of financial statements of less complex entities

Jul 23, 2021

On July 23, 2021, the International Auditing and Assurance Standards Board (IAASB) published an exposure draft of its new, stand-alone standard for audits of financial statements of less complex entities. Comments are requested by January 31, 2022.

This landmark new draft standard responds to demands to have a set of high-quality requirements tailored for the needs of less complex entities (LCEs). The new standard for audits of financial statements of LCEs will provide a globally consistent approach at a time where several jurisdictional-specific LCE standards or related initiatives are arising. The release of the exposure draft is part of a broader effort to reduce complexity, improve understandability, and make International Standards on Auditing (ISAs) more scalable and proportionate to circumstances of audited entities.

The standard is relevant to users of financial statements, owners, management and those charged with governance of entities, preparers of financial statements, legislative or regulatory authorities, relevant local bodies with standard-setting authority, professional accountancy organizations, academics, regulators and audit oversight bodies, and auditors and audit firms, among others.

Review the press release and exposure draft on the IAASB's website.

Compilations of Future-oriented Financial Information reference group and task force established

Jul 20, 2021

On July 20, 2021, the Auditing and Assurance Standards Board (AASB) announced that it has recruited members for the Compilations of Future-oriented Financial Information (FOFI) Reference Group and Task Force.

The Compilations of FOFI Reference Group and Task Force will assist the AASB as it develops a new Canadian Standard on Related Services (CSRS) to replace current Assurance and Related Services Guideline (AuG)-16, Compilation of a Financial Forecast or Projection.

Review the members for the Reference Group and Task Force on the AASB's website.

2021 CPAB Disclosures public consultation

Jul 19, 2021

On July 19, 2021, the Canadian Public Accountability Board (CPAB) announced that they are conducting a public consultation to gather stakeholder input and to invite a dialogue on potential changes to the information that they disclose about the results of our regulatory assessments. Comments are requested by September 30, 2021.

CPAB is requesting input into potential changes to the information that they disclose about the results of their regulatory assessments, specifically:

  • Communication to audit committees
  • Disclosures of the results of our regulatory oversight activities
  • Disclosures related to CPAB’s enforcement actions

Review the press release on the CPAB's website.

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