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Assurance

IAASB raises the bar for Quality Management

Dec 17, 2020

On December 17, 2020, the International Auditing and Assurance Standards Board (IAASB) released its three quality management standards. The standards promote a robust, proactive, scalable and effective approach to quality management and mark a significant evolution of the existing quality control standards.

The suite of standards includes:

  • International Standard on Quality Management (ISQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements;
  • ISQM 2, Engagement Quality Reviews; and
  • International Standard on Auditing 220 (Revised), Quality Management for an Audit of Financial Statements

The standards become effective on December 15, 2022.

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

IAASB communique details plans to develop separate standard for Audits of Less Complex Entities

Dec 15, 2020

On December 15, 2020, the International Auditing and Assurance Standards Board (IAASB) published a new communique detailing plans for the new standard, including current thinking on what the standard will look like, what entities it will apply to, and the development timeline.

During its December 2020 meeting, the IAASB held its first public discussions on the draft of a separate standard being developed for an audit of less complex entities and the official project proposal to complete and publish the draft standard for public consultation in 2021. The IAASB approved the project proposal and early draft.

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

CPAB 2020 Audit Committee Highlights

Dec 10, 2020

On December 10, 2020, the Canadian Public Accountability Board (CPAB) released a year-end review.

The CPAB has been meeting regularly with audit committee chairs during the pandemic to understand changes in the environment, facilitate a dialogue and contribute their perspectives.

This fall, they continued their one-on-one outreach and hosted eight forums to share their perspectives and discuss the issues top of mind for audit committees as we approach the end of the year and look ahead to 2021.

Review the highlights on the CPAB's website.

CAQ Issues Year-in-Review Report on Critical Audit Matters

Dec 03, 2020

On December 3, 2020, the Cen­ter for Au­dit Qual­ity (CAQ) has re­leased a new re­port “Critical Audit Matters — A Year in Review”. The publication provides observations from the CAQ’s analysis of the CAMs communicated in the auditor’s reports for companies broadly, as well as a deeper dive into the S&P 100, which comprises 100 public companies across multiple industry groups.

The new report provides data and analysis on the first year (2019) that critical audit matters (CAMs) were included in auditor reports. Consistent with the requirements of the Public Company Accounting Oversight Board (PCAOB), the CAQ report finds that CAMs for S&P 100 companies frequently focused on some of the most complex accounting issues that require a high degree of judgement by the auditor.

The report notes (i) every auditor report for S&P 100 companies contained at least one CAM; and (ii) the 100 auditor reports included a total of 198 CAMs for an average of just under two (1.98) CAMs per report; and (iii) there was a single auditor report that communicated five CAMs, while 32 auditor reports communicated only one CAM.

Four common categories of CAMs emerged in S&P 100 auditor reports: taxes (16% of CAMs), goodwill and/or intangibles (14% of CAMs), other contingent liabilities (12% of CAMs), and revenue (9% of CAMs).

For fur­ther de­tails, re­fer to the press re­lease and the Re­port on the CAQ's web­site.

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.

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