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Video introduction to the new IAASB Quality Management Standards

Nov 18, 2020

On November 18, 2020, the International Auditing and Assurance Standards Board (IAASB) published video introductions to the new and revised quality management standards in English, French and Spanish. The videos explain the key aspects of the three standards to help stakeholders begin their implementation efforts.

The IAASB recently approved the suite of new and revised quality management standards, which will be released following approval from the Public Interest Oversight Board of the due process later this year. The new and revised quality management standards will become effective on December 15, 2022.

Review the press release and watch the videos on the IAASB's website.

IAASB issues new support for assessing risks of material misstatement when using automated tools and techniques

Nov 18, 2020

On November 18, 2020, the International Auditing and Assurance Standards Board (IAASB) Technology Working Group released a new non-authoritative frequently asked questions publication on using automated tools and techniques in identifying and assessing risks of material misstatements in accordance with International Standard on Auditing 315 (Revised 2019), "Identifying and Assessing Risks of Material Misstatement".

The publication assists auditors to understand the types of automated tools and techniques that can be used, and how they can be used, in performing risk assessment procedures. It also addresses considerations regarding the entity’s use of machine learning or artificial intelligence when performing risk assessment procedures.

Review the press release and publication on the IAASB's website.

Key takeaways from IAASB’s roundtable series on Fraud and Going Concern

Nov 17, 2020

On November 17, 2020, the International Auditing and Assurance Standards Board (IAASB) released a key takeaways publication following three recent virtual roundtables with experts and leaders exploring issues and challenges related to fraud and going concern.

These roundtables focused on:

  1. The impact of technology advancements on fraud perpetration and detection;
  2. The “expectation gap”, or differences between public perceptions and the auditor’s responsibilities for fraud and going concern; and
  3. Fraud and going concern in audits of less complex entities.

Today’s publication details the roundtables and what we heard. The input from these roundtables comprise one aspect of the IAASB’s broader information-gathering activities related to fraud and going concern that will be considered in determining possible future actions.

The full roundtable recordings, including individual breakout sessions, are available on the IAASB’s YouTube channel:

Review the press release and key takeaways on the IAASB's website.

Deadline extended for IAASB’s Discussion Paper on Fraud and Going Concern

Nov 16, 2020

On November 16, 2020, the International Auditing and Assurance Standards Board (IAASB) extended the closing date of the IAASB’s Discussion Paper, "Fraud and Going Concern in an Audit of Financial Statements: Exploring the Differences Between Public Perceptions About the Role of the Auditor and the Auditor’s Responsibilities in a Financial Statement Audit" to February 1, 2021.

The Discussion Paper aims to gather perspectives from all our stakeholders across the financial reporting ecosystem about the role of the auditor in relation to fraud and going concern in an audit of financial statements, and to obtain input on matters about whether our standards related to fraud and going concern remain fit-for-purpose in the current environment. The input from this consultation, together with other information gathering and outreach activities, will inform IAASB decisions about possible further actions on these topics.

Review the press release in the IAASB's website.

PCAOB posts resource for audit committees regarding new requirements related to estimates and specialists

Nov 12, 2020

On November 12, 2020, the Public Company Accounting Oversight Board’s (PCAOB) released a resource for audit committees on their new requirements related to auditing accounting estimates, including fair value measurements, and using the work of specialists. The requirements will take effect for audits of financial statements for fiscal years ending on or after December 15, 2020.

To help audit committees enhance their understanding in this area, this resource provides the basics of the new requirements, key takeaways for audit committees, and questions to consider asking auditors.

Review the resource on the PCAOB's website.

IAASB communique: Audits of less complex entities

Nov 05, 2020

On November 5, 2020, the International Auditing and Assurance Standards Board (IAASB) published a new communique detailing its next steps to address complexity, understandability, scalability, and proportionality, including in the audits of financial statements of less complex entities.

The communique details the IAASB’s efforts to balance the needs of all its stakeholders by developing a separate standard focused on less complex entities while simultaneously addressing complexity, understandability, scalability and proportionality in the International Standards on Auditing more broadly.

Review the press release and communique on the IAASB's website.

IAASB's implementation plans published for quality management standards

Oct 22, 2020

On October 22, 2020, ahead of the anticipated release of the International Auditing and Assurance Standards Board’s (IAASB) suite of new quality management standards following Public Interest Oversight Board approval later this year, the IAASB released implementation plans for each of the three standards.

The plans explain what implementation materials stakeholders can anticipate, topics covered, and expected timing.

Review the press release on the IAASB's website.

AASB Response Letter – IAASB Exposure Draft on Audits of Group Financial Statements

Oct 19, 2020

On October 19, 2020, the Auditing and Assurance Standards Board (AASB) announced that their letter responding to the International Auditing and Assurance Standards Board’s (IAASB) Exposure Draft, "International Standard on Auditing (ISA) 600 (Revised), Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors)" was released by the IAASB. The exposure draft outlines more robust requirements and enhanced guidance on auditing group financial statements.

The response letter highlights the AASB's support for the proposed changes, which clarify many of the issues raised by stakeholders regarding the extant ISA 600. The AASB is pleased with how the IAASB developed ED-600 after determining the foundational principles of conducting a risk-based audit. They believe that developing ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement and the proposed quality management standards were important first steps to building ED-600.

The letter encourages the IAASB to consider adding further clarity and guidance regarding the involvement of component auditors in conducting risk assessment procedures. Furthermore, the AASB requests that the IAASB considers developing a more comprehensive approach to the use of audit evidence from audits performed for other purposes.

Review the press release and letter on the AASB's website.

CPAB Audit Quality Insights Report: 2020 Interim Inspections Results

Oct 14, 2020

On October 14, 2020, the Canadian Public Accountability Board’s (CPAB) released its Audit Quality Insights Report on its 2020 inspections to date. The report features common findings and highlights several audit quality matters that impact audit committees, regulators and investors.

2020 has been an extraordinary year. The COVID-19 economic disruption has given rise to a large number of critical accounting and auditing issues. The current environment is uncharted territory for auditors as the pandemic continues to raise challenges to how the audit is performed. This interim report provides a snapshot of themes and insights from CPAB's 2020 audit quality assessment work to date and highlights their initial observations on the impact of the COVID-19 pandemic on public company audits. CPAB has included considerations for auditors and audit committees as they prepare for their year-end audits and continue to respond to the challenges of COVID-19.

While the 2020 engagement file inspections were delayed for a short time as CPAB and the firms prepared for this work to be done remotely, the inspections results to date suggest the overall rate of significant findings is lower than the previous year. These results are subject to change as CPAB completes the balance of its inspections.

CPAB will publish its final assessment of its planned file inspections, including any impacts of the COVID-19 pandemic, in March 2021.

Review the report on the CPAB's website.

PCAOB issues staff update and preview of 2019 inspection observations

Oct 08, 2020

On October 8, 2020, the Public Company Accounting Oversight Board (PCAOB) released a new Spotlight publication, "Staff Update and Preview of 2019 Inspection Observations".

This Spotlight provides inspections insights ahead of the issuance of our 2019 inspection reports and covers the following topics:

  • Update on PCAOB inspection transformation activities;
  • Observations of good practices;
  • Activities of the PCAOB’s target team, which focuses on current audit risks and emerging topics;
  • Recurring deficiencies;
  • Technology; and
  • Audit committee communications.

Auditors may find this information useful as they plan and perform their audits, and audit committees may find it useful as they engage with their auditors.

Review the publication on the PCAOB's website.

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