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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.

Auditor Reporting Guide – Reporting implications of Canadian Auditing Standards (4th edition)

Dec 23, 2019

On December 23, 2019, the Task Force on Reporting Implications of the Canadian Auditing Standards released a fourth edition of the Auditor Reporting Guide.

The revised Auditor Reporting Guide includes a new chapter on Key Audit Matters.

Review the guide on the AASB's website.

FRC publishes an updated practice aid to assist audit committees in evaluating audit quality

Dec 19, 2019

On December 19, 2019, the Financial Reporting Council (FRC) published an updated practice aid to assist audit committees in evaluating audit quality in their assessment of the effectiveness of the external audit process.

The practice aid updates an earlier version to take into account developments since such as revisions to the UK Corporate Governance Code, the requirement for all Public Interest Entities (PIEs) to conduct a tender at least every 10 years and rotate auditors after at least 20 years, and increasing focus generally on audit quality and the role of the audit committee. It also takes account of commentary from audit committees suggesting how the Practice Aid could be more practical in focus and more clearly presented.

New sections have been added on audit tendering and transparency of audit committee reporting. Responding to comments from audit committees, some of the background material has been consolidated and shortened and the illustrative considerations for audit committees have been updated, made more practical in their focus, and more clearly presented in separate appendices.

The FRC encourages audit committees to use the Practice Aid to help develop their own approach to their evaluation of audit quality, tailored to the circumstances of their company. Audit committees are encouraged to see their evaluation as integrated with other aspects of their role related to ensuring the quality of the financial statements – obtaining evidence of the quality of the auditor’s judgments made throughout the audit, in identifying audit risks, determining materiality and planning their work accordingly, as well as in assessing issues.

While the Practice Aid is designed for audit committees of Premium Listed companies it may assist audit committees of other entities, particularly those adopting the Corporate Governance Code voluntarily.

Review the press release and full practice aid on the FRC's website.

IAASB enhances and modernizes ISA 315 for a more robust risk assessment

Dec 19, 2019

On December 19, 2019, the International Auditing and Assurance Standards Board (IAASB) released International Standard on Auditing (ISA) 315 (Revised 2019), its revised standard for identifying and assessing risks of material misstatement.

ISA 315 (Revised 2019) is an important part of the IAASB’s efforts to improve audit quality globally. In finalizing the changes, the IAASB focused on the understandability, complexity and length of the standard, and made enhancements and clarifications to encourage a more consistent and robust risk assessment, which forms the foundation of the auditor’s efforts to gather sufficient appropriate audit evidence. The revisions also modernize the standard to keep up with the evolving environment in which businesses operate, in particular in relation to technology, as well as a focus on why procedures are required.

ISA 315 (Revised 2019) becomes effective for financial statement audits for periods beginning on or after December 15, 2021.

Review the press release and final pronouncement on the IAASB's website.

Conversations with Audit Committee Chairs: What we heard & FAQs

Dec 18, 2019

On December 18, 2019, the Public Company Accounting Oversight Board (PCAOB) staff released a new resource for audit committees, in an effort to provide transparency and as part of the reporting out of what they heard.

The PCAOB is committed to our strategic goal of enhancing transparency and accessibility through proactive stakeholder engagement. Over the past year, we have engaged more directly and more often with public company audit committees and had conversations with the audit committee chairs of almost all of the U.S. issuers whose audits we inspected. By contrast, historically, we have reached out to a small percentage of audit committee chairs during our inspections process. Continuous dialogue with audit committees on areas of mutual importance helps us to advance our mission and may assist audit committees in fulfilling their duties.

Review the publication on the PCAOB's website.

Potential approach to revisions to PCAOB quality control standards

Dec 17, 2019

On December 17, 2019, the Public Company Accounting Oversight Board (PCAOB) issued a concept release seeking public comment on a potential approach to revising the PCAOB’s quality control standards.

This potential approach is based on the proposed international standard on quality management, ISQM 1, with certain differences as appropriate for firms that are subject to PCAOB standards and rules.

Review the concept release on the PCAOB's website.

IAASB’s Audits of less complex entities: Feedback statement and way forward

Dec 17, 2019

On December 17, 2019, the International Auditing and Assurance Standards Board (IAASB) released a Feedback Statement sharing what the Board has heard regarding audits of less complex entities in response of its recent Discussion Paper "Audits of Less Complex Entities (LCEs): Exploring Possible Options to Address the Challenges in Applying the ISAs".

The Discussion Paper, and related outreach activities, solicited perspectives of different stakeholder groups on the issues and challenges surrounding the audits of LCEs. Further information gathering activities will continue until June 2020, when the Board will decide the way forward.

Review the press release and Feedback Statement on the IAASB's website.

Basis for Conclusions – CAS 700, Reporting on Audited Financial Statements

Dec 13, 2019

On December 13, 2019, the Auditing and Assurance Standards Board (AASB) released this document, which summarizes the process the AASB followed in revising the requirements to communicate key audit matters in accordance with CAS 700, Forming an Opinion and Reporting on Financial Statements.

The AASB approved the amendments to CAS 700 at its September 2019 meeting. The Board concluded that while significant changes were made to CAS 700 compared to ED-KAM, the amended CAS 700 did not require re-exposure because all changes were responsive to comments received from stakeholders.

The effective dates for KAM reporting are as follows:

  1. entities listed on the Toronto Stock Exchange, excluding listed entities required to comply with National Instrument 81-106, periods ending on or after December 15, 2020; and
  2. other listed entities, excluding listed entities required to comply with NI 81-106, periods ending on or after December 15, 2022.

Review the Basis for Conclusions on the AASB's website.

Update – New Standard on Compilation Engagements: Coming February 2020

Dec 06, 2019

On December 6, 2019, the Auditing and Assurance Standards Board (AASB) released a summary of the key features of this new standard.

The AASB approved a new standard on compilation engagements for release in February 2020. The impact could be significant to practitioners and users.

Review the summary on the AASB's website.

CPAB industry forum highlights

Nov 28, 2019

On November 28, 2019, the Canadian Public Accountability Board (CPAB) released three new industry forum highlights on mining, real estate and oil and gas.

The forums featured discussions about matters top of mind for audit committees and management.

Access the industry highlights below:

Correction list for hyphenation

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