PCAOB Proposes a New Quality Control Standard

Nov 29, 2022

In November 2022, the Public Company Accounting Oversight Board (PCAOB) issued for public comment a proposed standard that the Board believes would, if adopted, lead registered public accounting firms to significantly improve their quality control (QC) systems. Comments are requested by February 1, 2023.

The proposed standard, if adopted, would replace the current QC standards in their entirety and would provide a framework for a firm’s QC system that is grounded in proactively identifying and managing risks to quality, with a feedback loop from ongoing monitoring and remediation designed to drive continuous improvement. Among other provisions, the proposal would foster a more structured approach where a firm would annually evaluate its QC system and report the results of its evaluation on new Form QC.

Review the following on the PCAOB's website:


AASB Exposure Draft – CAS 500, Audit Evidence

Nov 23, 2022

On No­vem­ber 23, 2022, the Auditing and Assurance Stan­dards Board (AASB) is­sued an Exposure Draft of proposed amend­ments to Canadian Audit Standard (CAS) 500, "Audit Evidence". Comments on the Exposure Draft are requested by March 15, 2023.

The proposed amendments are consistent with the amendments proposed by the IAASB to its International Standard on Auditing (ISA) 500, “Audit Evidence”. The AASB plans, subject to comments received following exposure, to adopt proposed ISA 500 (Revised), and the proposed conforming and consequential amendments to other ISAs. The result would be revised respective CASs.

Re­view the press release and related Exposure Draft on the CPA Canada's web­site.

IAASB issues guidance on how amendments made to IAS 1 impact the ISAs

Nov 16, 2022

On November 16, 2022, the International Auditing and Assurance Standards Board (IAASB) published new guidance to help users understand the impact on the International Standards on Auditing (ISAs) due to narrow-scope amendments made to IAS 1, "Presentation of Financial Statements".

While the IAASB remains framework neutral when developing the ISAs, it considers financial reporting framework developments that may affect the ISAs, such as changes to the International Financial Reporting Standards (IFRS). Amendments to IAS 1 and the Impact on the ISAs: Disclosure of Material Accounting Policy Information, among other matters, provides users with guidance on how to address the effect of the amendments on a number of illustrative auditor reports throughout the ISAs that assume, as part of the fact pattern, that the financial statements are prepared by the management of the entity in accordance with IFRS Standards.

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

PCAOB issues report analyzing the impact of estimates and specialists requirements on key stakeholders

Nov 08, 2022

On December 8, 2022, the Public Company Accounting Oversight Board (PCAOB) released an interim post-implementation review report addressing the initial impact of their requirements, adopted in 2018, related to auditing accounting estimates and the auditor’s use of the work of specialists.

The report and accompanying staff white papers providing additional technical information are available at the following links:

Modernizing standards is one of four key strategic goals for the PCAOB. In pursuit of this goal, the Board has set one of the most ambitious standard-setting agendas in PCAOB history. Given these efforts, the role of robust economic analysis in standard setting is more important than ever for the PCAOB. Post-implementation reviews are an important component of high-quality economic analysis that the PCAOB conducts as part of standard setting to ensure that PCAOB standards are working effectively to enhance audit quality and protect investors.

The staff findings suggest that the new requirements improved auditing practices in some instances and did not result in significant increases in audit hours or audit fees. There is also no evidence of unintended consequences from auditors’ initial implementation of the new requirements. The Board plans to continue to monitor the implementation of the new requirements and their impact on the quality of audit services, as well as on audit committees, preparers, and audit firms.

Review the post-implementation review on PCAOB's website.

IAASB opens public consultation for revised audit evidence standard

Oct 24, 2022

On October 24, 2022, the International Auditing and Assurance Standards Board (IAASB) opened the public consultation for proposed changes to one of its fundamental standards, International Standard on Auditing (ISA) 500, "Audit Evidence". Comments are requested by April 24, 2023.

The current ISA 500 addresses an auditor’s responsibility to design and perform audit procedures to obtain sufficient appropriate evidence to draw reasonable conclusions on which to base the auditor’s opinion.

The proposed changes:

  • Clarify ISA 500’s purpose and scope and explain its relationship with other standards;
  • Provide a principles-based approach to considering and making judgments about information intended to be used as audit evidence and evaluating whether sufficient appropriate audit evidence has been obtained;
  • Modernize ISA 500 to be adaptable to the current business and audit environment, while considering scalability for different circumstances, including the entity and the auditor’s use of technology, such as automated tools and techniques; and
  • Emphasize the role of professional skepticism when making judgments about information intended to be used as audit evidence and evaluating the audit evidence obtained.

Proposed International Standard on Auditing 500 (Revised), Audit Evidence, provides a “reference framework” for auditors when making judgments about audit evidence throughout the audit.

Review the press release and proposed changes on the IAASB's website.

Lessons Learned from KAM Reporting on Audits of TSX-Listed Entities: Observations from the 2020 Canadian Experience

Oct 20, 2022

In 2022, the independent research study "Communicating Key Audit Matters: A Post Implementation Review" was undertaken to gain further insights on the Canadian experience.

The study’s purpose was to better understand the Canadian KAM reporting experience of Toronto Stock Exchange (TSX)-listed entities and communicate relevant insights to auditors and other stakeholders to assist in future KAM communications.

The overview summarizes:

  • the study’s key findings;
  • the hints and tips from the study for the next implementation wave; and
  • non-authoritative guidance to assist auditors in future KAM communications, including those who are implementing KAM reporting for the first time.

Review the press release and publication.

CPAB Audit Quality Insights Report: 2022 Interim Inspections Results

Oct 20, 2022

On October 20, 2022, the Canadian Public Accountability Board (CPAB) released its interim public report on its 2022 audit quality assessments. The report provides a snapshot of themes and insights from our 2022 audit quality assessment work to date.

The interim report also highlights CPAB's observations related to progress on the implementation of the new quality management standards, auditor independence and objectivity. It provides insight into their activities on firm culture and the results of thematic reviews on climate, fraud and going concern.

Overall considerations for audit committees are also included as year-end audit preparations begin.

CPAB encourages public accounting firms to provide this report to their reporting issuers’ audit committees. Audit committees should discuss this report, any file-specific findings and any remediation action taken, if applicable, with their external auditor.

Review the report on the CPAB's website.

System of quality management call to action: Strengthening audit quality

Oct 20, 2022

In October 2022, the Canadian Public Accountability Board (CPAB) released a publication intended to assist audit firms as they implement their system of quality management to comply with the new quality management standards.

In this publication, CPAB emphasizes the importance of culture to a firm’s system of quality management and provides preliminary observations on the implementation of the new quality management standards.

Review the publication on the CPAB's website.

PCAOB Updates Standard-Setting and Research Agendas to Reflect Progress on Key Strategic Goal

Oct 19, 2022

Modernizing standards is one of the four key goals that the Public Company Accounting Oversight Board (PCAOB) has identified in its draft strategic plan. To advance this goal, the Board in May 2022 announced one of the most ambitious standard-setting and research agendas in the PCAOB’s history. The PCAOB announced additions and revisions to the agendas, reflecting accomplishments and developments to date in 2022.

Other Auditors Project Completed

In June 2022, the Board adopted amendments to its auditing standards to strengthen requirements that apply to audits involving multiple audit firms, thus completing a project initiated in 2016. With the SEC’s August 2022 approval of the Board’s action, the Other Auditors project has been removed from the standard-setting agenda.  

Three New Projects Added

The PCAOB further expanded its standard-setting and research agendas with three new projects.

Two of the new projects have been added to the short-term standard-setting agenda: Interim Standards – AS 1000 and Amendments Related to Certain Aspects of Designing and Performing Audit Procedures That Involve Technology-Assisted Data Analysis. The amendments related to certain aspects of the designing and performing technology-assisted data analysis project resulted from the successfully completed research project on Audit Evidence, which has now been removed.

One project has been added to the PCAOB’s research agenda: Firm and Engagement Performance Metrics.

Three Project Timelines Updated

The anticipated timing for the Confirmations project has moved up to 2022 from 2023, with the Board expected to issue a re-proposal before year’s end. 

For two projects — Noncompliance with Laws and Regulations and Attestation Standards Update — the anticipated timing for action is now 2023. Board action on these projects continues to be expected in the next 12 months.

Review the standard-setting and research agendas on the PCAOB's website.

PCAOB Chair Williams Delivers Remarks at UCI Audit Committee Summit

Oct 07, 2022

On October 7, 2022, the Public Company Accounting Oversight Board (PCAOB) Chair Erica Y. Williams delivered a speech at the ninth annual UCI Audit Committee Summit.

In her speech, she described how the PCAOB released their five-year strategic plan, outlining four key goals:

  • One, modernizing our standards,
  • Two, enhancing our inspections, 
  • Three, strengthening our enforcement, and 
  • Four, improving organizational effectiveness.

Review the speech on the PCAOB's website.

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