2019

Investor relations: Get up to speed now on critical audit matters

Jul 09, 2019

On July 9, 2019, the Center for Audit Quality (CAQ) released a list of frequently asked questions about critical audit matters (CAMs) to help inform investor relations (IR) professionals as they prepare for those conversations

Starting in the summer of 2019, auditors will be required to communicate CAMs in their auditor’s reports. Investors with questions about CAMs may turn to a company’s IR group for answers.

Review the publication on the CAQ's website.

ISA 540 (Revised) implementation support: Audit client briefing

Nov 19, 2019

On November 19, 2019, the International Standard on Auditing (ISA) 540 (Revised) Implementation Working Group released an Audit Client Briefing (Briefing) based on the Canadian Auditing Standard (CAS) Audit Client Briefing of the Chartered Professional Accountants of Canada (CPA Canada), published in October 2019 and is used with permission of CPA Canada.

The purpose of this Briefing is to make chief financial officers, other senior management responsible for financial statement preparation, and staff directly involved in determining accounting estimates aware of matters to consider in preparing for the auditor’s requests pertaining to ISA 540 (Revised), Auditing Accounting Estimates and Related Disclosures.

This Briefing provides an overview of:

  • Management’s responsibilities in determining when accounting estimates are needed;
  • Management’s responsibilities regarding the main components of an estimation process; and
  • The impact on management because of changes to the auditor’s responsibilities, including broad questions auditors are likely to ask those involved in the detailed aspects of the estimation process.

This Briefing does not constitute an authoritative pronouncement of the International Auditing and Assurance Standards Board (IAASB), nor does it amend, extend or override the ISAs or other of the IAASB’s International Standards. It is not meant to be exhaustive and reading this Briefing is not a substitute for reading the ISAs.

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

Joint IAASB IESBA Comment Letter in Response to the UK’s Brydon Review

Jun 03, 2019

On June 3, 2019, the International Auditing and Assurance Standards Board (IAASB) and the In­ter­na­tional Ethics Stan­dards Board for Ac­coun­tants (IESBA) issued a joint response to the UK's Brydon review. In addition to responding to the Brydon review's proposals, the letter highlights how both Boards act in the public interest to support public confidence in audits of financial statements and other assurance engagements, and also serve to reinforce the important ethical responsibilities of professional accountants in business in the external reporting ecosystem.

The Brydon review is an independent review, established by the UK government in late 2018 and led by Sir Donald Brydon; it is looking at audits as a product and what audits should be in the future. It will address the audit expectation gap: the difference between what people think an audit does and what it actually does. It will also look at the scope of an audit, any changes that may need to be made to it and how it can better serve the public interest. The independent review will be supported by advisory groups that will provide advice and challenge emerging findings and recommendations.

Re­view the joint response on the IAASB’s website.

Keep up to date! Assurance over Key Performance Indicators

Jan 14, 2019

On January 14, 2019, the Auditing and Assurance Standards Board (AASB) released an article on reporting and providing assurance over key performance indicators.

There are a number of developments resulting from efforts by the AASB and others to enhance the trust and credibility of information reported outside of the financial statements.

This article discusses:

  • What is driving the increased focus and discussion in this area?
  • What’s the AASB doing about this?
  • What else is happening in Canada?
  • What’s next?

Review the article on the AASB's website.

Non-authoritative Guidance – System and Organization Controls (SOC) Engagements

Aug 30, 2019

On August 30, 2019, the Auditing and Assurance Standards Board (AASB) released a non-authoritative guidance that is intended to provide a roadmap for practitioners who are engaged to conduct SOC attestation engagements under Canadian standards; or both Canadian and U.S. standards and/or international standards.

Review the guidance on the AASB's website.

PCAOB issues staff guidance on implementing CAM requirements

Mar 18, 2019

On March 18, 2019, the Public Company Accounting Oversight Board (PCAOB) issued three staff guidance documents related to the implementation of the new critical audit matter (CAM) requirements.

The documents consist of a high-level overview, staff observations from a review of audit methodologies, and a deeper dive on the determination of CAMs.

These documents were informed by discussions with auditors regarding their experiences conducting dry runs of CAMs with their audit clients, the staff’s review of methodologies submitted by 10 U.S. audit firms that collectively audit approximately 85% of large accelerated filers, and other outreach efforts. The Board and staff will continue to monitor CAM implementation and determine if further guidance is needed.

Review the press release on the PCAOB’s website.

PCAOB posts 2019 staff inspections outlook for audit committees

Mar 14, 2019

On March 14, 2019, the Public Company Accounting Oversight Board (PCAOB) published the "2019 Staff Inspection Outlook for Audit Committees". The Board’s new strategic plan anticipated enhanced external engagement and more proactive communication with stakeholders, including audit committees, to inform them about the PCAOB’s core activities—including inspections—and to maintain an ongoing dialogue with them.

This Audit Committee Outlook provides an overview of what audit committees should expect from the PCAOB’s 2019 inspections as a supplement to the 2019 Inspections Outlook issued in December 2018.

Review the 2019 Staff Inspection Outlook for Audit Committees on the PCAOB's website.

PCAOB posts CAM resources for investors and audit committees

Jul 11, 2019

On July 11, 2019, the Public Company Accounting Oversight Board (PCAOB) released two new resources on critical audit matters (CAMs), one specifically for investors and the other for audit committees.

These resources advance the PCAOB’s strategic priority of cultivating effective communications with stakeholders, as well as providing timely, relevant, and useful information to them.

In May, Erin Dwyer joined the PCAOB as a direct point of contact for and liaison to investors, audit committees, and preparers. Erin shares some additional information about her role and these CAMs-related resources in this short video.

Review the resources on the PCAOB's website:

PCAOB Posts Staff Guidance on Communications with Audit Committees Concerning Independence

May 31, 2019

On May 31, 2019, the Pub­lic Com­pany Ac­count­ing Over­sight Board (PCAOB) posted to its website staff guidance on PCAOB Rule 3526(b), Communication with Audit Committees Concerning Independence. The guidance provides background on Rule 3526 and technical guidance for auditors on the independence-related communications required by the rule.

Re­view the overview of staff guidance  and the staff guidance specific to Rule 3526(b) on the PCAOB's web­site.

PCAOB posts staff guidance: A deeper dive on the communication of CAMs

May 22, 2019

On May 22, 2019, the Public Company Accounting Oversight Board (PCAOB) released a staff guidance document, "A Deeper Dive on the Communication of CAMs", developed to support implementation of the new critical audit matter requirements.

This document was informed by discussions with auditors regarding their experiences conducting dry runs of CAMs with their audit clients, the staff’s review of methodologies submitted by 10 U.S. audit firms that collectively audit approximately 85% of large accelerated filers, and other outreach efforts.

Review the staff guidance on the PCAOB's website.

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