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CPA Canada Article – New standard on audit of accounting estimates will drive significant change

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Jul 01, 2017

In July 2017, CPA Canada issued an article written by Eric Turner, Director, Auditing and Assurance Standards, CPA Canada which informs readers about the impact that the IAASB’s proposals to amend ISA 540 will have on audits.

Mr. Turner notes that, in March 2017, the International Auditing and Assurance Standards Board (IAASB) approved an exposure draft on auditing accounting estimates and related disclosures (ISA 540). He believes that the proposed changes are significant, affecting all audits and estimates, from simple to complex.

Through ISA 540 — expected to be finalized in early 2018 — the IAASB is addressing global concerns about how auditors address estimates in their audits and changes to accounting standards on credit losses. Some key features of the proposals relate to (i) addressing risks; (ii) procedures to drive the work effort; (iii) addressing management bias; (iv) significant risks; and (v) misstatements.

Read the article on the CPA Canada website.

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