Group audits were not included in the scope of the original Exposure Draft of the ISA for LCE. Given stakeholder feedback, the IAASB reconsidered its decision to exclude group audits and developed proposals that address audits of less complex groups.

With the inclusion of group audits, the IAASB has proposed changes to the Authority of the proposed ISA for LCE. For example, the IAASB removed the prohibition on using the standard when the audit is a group audit unless component auditors are involved, other than in limited circumstances in which a physical presence is needed for a specific audit procedure for the group audit (e.g., for attending a physical inventory count or inspecting physical assets).

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

The narrow-scope amendments to IAS 1 require entities to disclose their material accounting policy information, instead of significant accounting policies. The amendments are effective for annual reporting periods beginning on or after January 1, 2023, with early application permitted.

Of note, the Guide is intended to assist auditors with respect to these amendments to IAS 1. The publication does not amend or override the CASs, the texts of which alone are authoritative. Reading the publication is also not a substitute for reading the CASs

Re­view the Guide on the AASB's web­site.

To modernize the PCAOB’s confirmation standard, the proposed standard includes principles-based requirements that would apply to all methods of confirmation, including paper-based and electronic communications. The proposal, if adopted, would better integrate the PCAOB’s confirmation standard with its risk assessment standards.

The confirmation process touches nearly every audit. It involves an auditor sending a confirmation request directly to a confirming party (e.g., a financial institution), evaluating the information received, and addressing nonresponses and incomplete responses to obtain audit evidence about one or more financial statement assertions.

When properly designed and executed, confirmation can be a critical part of the evidence that auditors obtain to support their opinion regarding a company’s financial statements. A properly designed and executed confirmation can also be an important response for auditors to address fraud risks.

Detailed questions are included throughout the proposal, and commenters are encouraged to:

1. comment on any or all topics
2. respond to any or all questions
3. provide feedback in areas not covered by specific questions, and
4. provide any evidence that informs commenters’ views.

Review the proposal on the PCAOB's website.

The new globally accepted standards aim to improve investor confidence and “reduce the risk of material misstatements”.

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

Review the press release and report on the CAQ’s website.

This publication covers:

• What is Robotic Process Automation and why is it important?
• The latest developments
• What this might mean for the IAASB

Review the publication on the IAASB's website.

Ms. Corden is a partner with Deloitte Canada who is responsible for leading audit methodology, policies and guidance, including the firm's ISQM 1 implementation.

Review the press release on the IAASB's website.

Expanding the information CPAB discloses

In September, CPAB outlined planned changes to how we will disclose information about the results of our regulatory assessments.

Beginning in 2023, CPAB will publish information on recent enforcement and other regulatory actions imposed on audit firms.

2022 outreach overview

Here's a summary of CPAB's 2022 publications:

CPAB Exchange

Publications in the CPAB Exchange series highlight important issues and share practical insights with a view to prompting productive dialogue with audit firms and audit committees.

In 2022, they published the following:

• Going concern thematic review focuses on ways for auditors to more proactively assess going concern and underscores the importance of identifying early warning indicators and consistently applying professional skepticism.
• Fraud thematic review, also published in May, outlines steps that auditors could take to enhance the quality of their fraud risk identification and assessments, and identifies opportunities to enhance existing standards.
• Auditing in the crypto-asset sector report provides important insights and recommendations for those auditing the existence of crypto-assets held in custody by third parties.

Inspections reports

Twice annually, CPAB publishes the results of our inspections work. The full-year report on inspections conducted in 2021 was published in March. The interim report, published in October, provided a snapshot of themes and insights from our audit quality assessment work in the first portion of 2022.

Strengthening audit quality

In 2022, they published two additional papers intended to strengthen audit quality:

• The March 2022 report Audit evidence: Strengthening audit quality highlighted common deficiencies related to the appropriate application of professional skepticism and identification and evaluation of fraud risk factors.
• The report System of quality management call to action: Strengthening audit quality, published in October 2022, was designed to assist audit firms as they implement their system of quality management to comply with the new quality management standards.

The PCAOB is proposing to replace AS 2310, The Confirmation Process, in its entirety with a new standard, AS 2310, The Auditor’s Use of Confirmation. The purpose is to strengthen and modernize the requirements for the confirmation process. In doing so, the Board noted that AS 2310 is an important standard for audit quality and investor protection, as the audit confirmation process touches nearly every audit. However, the standard was initially written over 30 years ago and has had minimal amendments since its adoption by the PCAOB in 2003.

Re­view the press re­lease and proposed new standard on the PCAOB's web­site.

The fact sheet highlights aspects of a group audit that may be affected by ISA 220 (Revised) and International Standard on Quality Management 1 addressing quality management at the firm level. This includes the revised definition of engagement team and leadership and direction, supervision, and review responsibilities.

Review the press release and fact sheet on the IAASB's website.