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2020

AASB Exposure Draft – Audits of Group Financial Statements (Including the Work of Component Auditors)

May 11, 2020

On May 11, 2020, the Auditing and Assurance Standards Board (AASB) issued an Exposure Draft proposing the adoption of ISA 600 (Revised), with appropriate Canadian amendments. Comments are requested by September 11, 2020.

This Exposure Draft consists of:

  • an explanation of why change is needed;
  • key public interest considerations;
  • proposed changes;
  • a link to the IAASB’s Exposure Draft, including its Explanatory Memorandum;
  • a description of the AASB’s process for adopting ISAs;
  • a discussion of proposed significant Canadian amendments; and
  • a proposed effective date.

Review the press release and the Exposure Draft on the AASB's website.

AASB Exposure Draft – Conforming amendments to Canadian standards resulting from IAASB conforming amendments to IAASB International Standards as a result of the revised IESBA Code

Jan 17, 2020

On January 17, 2020, the Auditing and Assurance Standards Board (AASB) issued an Exposure Draft proposing to adopt, with appropriate amendments, proposed revisions to International standards issued by the International Auditing and Assurance Standards Board (IAASB). Comments are requested by March 27, 2020.

Review the press release and the Exposure Draft on the AASB's website.

AASB Response Letter – IASB Exposure Draft, General Presentation and Disclosures

Sep 30, 2020

On September 30, 2020, the Auditing and Assurance Standards Board (AASB) submitted its response letter to the IASB Exposure Draft, General Presentation and Disclosures.

The AASB considered comments provided by external stakeholders who were consulted in combination with the AcSB. They also raised comments on the audit implications of bringing management performance measures into the financial statements and introducing a definition for unusual income and expenses.

Review the letter on the IASB'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.

AASB Standard-setting Due Process Manual

Oct 07, 2020

On October 7, 2020, the Auditing and Assurance Standards Board (AASB) released their new due process manual that provides a clear explanation of their standard-setting due process activities.

The AASB's due process is based on the following principles:

  • Transparency: conducting our standard-setting process in a transparent manner.
  • Consultation: considering the perspectives of those affected by Canadian assurance standards.
  • Accountability: ensuring that obligations to stakeholders are met.
  • Objectivity: ensuring AASB members remain independent from special interest groups, political pressures and personal interests.

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

AICPA’s New Standard on Audit Evidence Recognizes Evolving Nature of Business

Jul 09, 2020

On July 9, 2020, the American Institute of CPAs (AICPA) Auditing Standards Board (ASB) issued Statement on Auditing Standards No. (SAS) 142 Audit Evidence. The SAS modernizes private company auditing standards by recognizing the critical value technology and information bring to today’s audit procedures.

SAS No. 142 addresses the evolving nature of business, audit services and issues that have arisen since the existing AU-C section 500 was originally issued. The standard addresses:

  • emerging technologies used by both preparers and auditors;
  • the application of professional skepticism;
  • the expanding sources of information to be used as audit evidence; and
  • the accuracy, completeness, relevance and reliability of audit evidence.

The new audit evidence standard also enhances’ the auditor’s assessment of whether sufficient and appropriate audit evidence has been obtained and establishes a multi-faceted consideration of attributes and factors in evaluating such audit evidence.

SAS No. 142 becomes effective for audits of financial statements for periods ending on or after December 15, 2022.

For further details, refer to the press release and SAS 142 on the AICPA’s website.

Auditor independence and audit evidence added to PCAOB agenda

Sep 08, 2020

On September 8, 2020, the Public Company Accounting Oversight Board (PCAOB) updated its research and standard-setting agenda, reiterating its ongoing efforts to increase transparency and provide more timely and relevant information to stakeholders.

The PCAOB made the following changes to its agenda:

  1. Added auditor independence to the standard-setting agenda
  2. Added audit evidence to the research agenda
  3. Removed going concern from the standard-setting agenda
  4. Removed other information and Noncompliance with laws and regulations from the research agenda

Review the the projects on the PCAOB's website and a summary on Audit Analytics' website.

Basis for Conclusions – AuG 50, Conducting a Performance Audit in the Public Sector in Accordance with CSAE 3001

Jul 31, 2020

On July 31, 2020, the Auditing and Assurance Standards Board (AASB) released a summary of the process followed in developing the Guideline and the Board’s conclusions regarding significant comments received in response to its Exposure Draft.

Review the Basis of Conclusions on the AASB’s website.

Basis for Conclusions – Conforming Amendments to Canadian Standards Resulting from IAASB Conforming Amendments to the IAASB International Standards as a Result of the Revised IESBA Code

Jul 31, 2020

On July 31, 2020, the Auditing and Assurance Standards Board (AASB) released this document that summarizes the process the AASB followed in revising various standards as a result of IAASB conforming amendments to the IAASB International Standards as a result of the revised IESBA Code.

The Basis for Conclusions has been prepared by staff of the AASB. It relates to, but does not form part of the following Canadian standards:

  • CSQC 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance Engagements;
  • CAS 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Canadian Auditing Standards;
  • CAS 220, Quality Control for an Audit of Financial Statements;
  • CSAE 3000, Attestation Engagements Other than Audits or Reviews of Historical Financial Information;
  • CSAE 3001, Direct Engagements; and
  • CSRE 2400, Engagements to Review Historical Financial Statements.

The revisions to Canadian standards dealing with breaches of ethical requirements have an effective date of July 15, 2020.

Review the Basis of Conclusions on the AASB’s website.

Basis for Conclusions – Compilation Engagements

Jan 31, 2020

On January 31, 2020, the Auditing and Assurance Standards Board (AASB) released this document, which summarizes the process the AASB followed in issuing CSRS 4200, Compilation Engagements, and the Board’s conclusions regarding significant comments received in response to its Exposure Draft.

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