The proposal would, among other things, “establish specific requirements for auditors to understand management’s processes regarding compliance with laws and regulations, which can provide insight into the company’s control environment, and to identify, through inquiry and other procedures, laws and regulations applicable to the company with which noncompliance could reasonably have a material effect on the financial statements.” Comments on the proposal are due by August 7, 2023.

Re­view the press release on PCAOB’s website and our project summary.

This MoU provides a framework for expanding the cooperation between the IBA and IFAC, with a particular focus on anti-corruption and how the professions can work more closely together in the fight against money-laundering and economic crime., with key stakeholders such as the United Nations and Financial Action Task Force. Other areas of cooperation include maintaining the reputations and integrity of the accountancy and legal professions; ensuring that initiatives to regulate both professions are proportionate and fit-for-purpose; and enhancing the strength of the IBA and IFAC’s collective voice on global policy issues so that the legal and accountancy professions are in the best position to serve the public interest.

Access the news release on the IFAC website.

Topics covered include:

• What is the Internet of Things? Why is it important?
• The latest developments
• What this might mean for the IAASB

Access the market scan on the IAASB website.

The roles and responsibilities of the Sustainability Assurance Committee are to:

• understand current and explore future Canadian trends, practices, and challenges related to sustainability assurance;
• review the IAASB agenda materials to determine the impact and issues relevant to Canada, and provide input to the AASB for its consideration;
• assist the AASB in its future Canadian sustainability assurance activities and standard setting; and
• assist the AASB with external outreach and collaboration activities with other Canadian Standard-setting Boards (AcSB, PSAB, and CSSB).

Access the details of this Committee on the FRAS Canada website.

Here’s an excerpt from the comments:

“We support the proposed amendments to ISA 700 (Revised). We agree that the revisions provide a clear mechanism to operationalize the IESBA’s transparency requirement, while recognizing that some jurisdictions, like Canada, adopt the ISAs but apply ethical requirements different from the IESBA Code.

However, we believe paragraph 17 of ISA 260 (Revised) should be amended to include an explicit requirement for the auditor to communicate with those charged with governance which independence requirements were applied. We believe those charged with governance should be fully informed regarding the firm’s independence, including which independence requirements were applied. We are concerned that proposed paragraph A29 of ISA 260 (Revised) may not, in all circumstances, achieve this desired transparency.

” Finally, we are concerned that the IAASB has other projects underway, in addition to this project, that may result in multiple changes to the auditor’s report. These changes, in relatively quick succession, could create implementation challenges and reduce the understandability of the auditor’s report. In considering any future revisions to the auditor’s report, we strongly urge the IAASB to ensure such revisions are coordinated to mitigate the risk of these potential unintended consequences.

Access the AASB comments on the IAASB website.

Here’s an excerpt from the comments:

“We are pleased with the IAASB’s proposal to include audits of group financial statements (Group audits) in the scope of the proposed ISA for LCE. Not all group audits exhibit characteristics of complexity. As such, audits of less complex groups should be within the scope of the proposed ISA for LCE.

However, we have significant concerns with the proposed “bright line” exclusion of the use of the proposed ISA for LCE when component auditors are involved. We believe that the proposed prohibition could increase the complexity of the auditor’s decision-making process regarding the use of the proposed ISA for LCE. Consequently, we believe the prohibition will considerably limit the application of the proposed ISA for LCE in Canada and will be a significant factor as we assess whether the proposed ISA for LCE meets the needs of Canadians.

As a result, we recommend that the Authority not include a prohibition when component auditors are involved. In our view, the qualitative characteristics set out in the Authority that describe the typical LCE, in addition to the group-specific qualitative characteristics set out in ED-ISA for LCE Part 10, should be adequate for the purpose of determining the appropriate use of the proposed ISA for LCE for group audits.”

Access the AASB comments on the IAASB website.

The proposed changes aim to:

• Promote consistent practice and behavior and facilitate effective responses to identified risks of material misstatement related to going concern;
• Strengthen the auditor’s evaluation of management’s assessment of going concern, including reinforcing the importance, throughout the audit, of the appropriate exercise of professional skepticism; and
• Enhance transparency with respect to the auditor’s responsibilities and work related to going concern where appropriate, including strengthening communications and reporting requirements.

The IAASB invites all stakeholders to comment on the proposed revisions via the IAASB website. Comments are requested by August 24, 2023.

Re­view the news release on IAASB’s website.

Subject to the expected IAASB approval of the Exposure Draft in June 2023, stakeholders can now expect the public consultation on the proposed standard to open in the latter part of July or early August 2023 and extend into December 2023. The consultation was originally scheduled to commence in October 2023.

The advanced consultation will support two objectives. First, the earlier publication, accompanied by a comprehensive and global outreach strategy, will enable the IAASB to gain broad and early input into the development of ISSA 5000. Second, the advanced consultation period will better ensure the completion of the final standard in 2024. In a recent report, the International Organization of Securities Commissions (IOSCO) highlighted the importance of having ISSA 5000 developed in accordance with due process and ready in 2024 to support a global baseline for sustainability reporting and assurance standards that meets the public interest.

Re­view the press release  on IAASB’s website.

Here are some interesting excerpts from Mr. Seiderstein’s comments on the topic of sustainability assurance:

“The IAASB is dedicating significant energy to have a sustainability assurance standard for limited and reasonable assurance engagements complete by the end of 2024. A global baseline of high-quality assurance standards, like reporting standards, should greatly improve confidence in sustainability reporting. Our ultimate aim must be achieving a level of quality and consistency for assurance, similar to financial audits, that delivers trust and confidence in what companies report.”

“In developing our proposed new standard, now titled International Standard for Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements, we are drawing on those concepts and other relevant audit concepts to provide a comprehensive standard. When final, the standard will allow a practitioner to do an end-to-end engagement, will work with multiple reporting frameworks (such as that of the International Sustainability Standards Board, the Global Reporting Initiative, and others), and will be practitioner agnostic --that is, both audit firms and non-audit firms could apply the standard.”

“We also know that time is of the essence as demand for the standard is growing. We are making solid progress on its development and will issue a final standard by December 2024. We will publish the draft standard for public comment in Q3 of this year and then launch an intensive outreach campaign across the global to a full range of stakeholders to ensure we have feedback and input from a range of” those who will use the standard, and those who will rely on the assurance engagement's conclusion.”

Re­view the full interview  on JICPA’s website.

Reappointed for one-year terms ending on March 31, 2024: 

• Ian Bandeen, LL.B, BCL, Chairman of the Advisory Board, Select Vantage Inc.
• Donna Bovolaneas, FCPA, FCA, retired after a long and diverse career focused primarily on financial reporting and audit quality

Appointed as a new member for a three-year term ending on March 31, 2026:

• Anne-Marie Ethier, FCPA, LPA, Audit Partner and member of the Board of Deloitte Canada and Chile, Deloitte LLP

Retired as a member on March 31, 2023: 

• Sheila Filion, CPA, CA, an assurance partner with Virtus Group Chartered Professional Accountants and Business Advisors LLP in Saskatchewan
• Johnny Walker, LL.B., CPA, CA, CBV, an investment banker and finance professional and has held senior management roles with global investment banks working in Canada, the U.S., and internationally

For fur­ther de­tails re­fer to press release.