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CPAB access to foreign jurisdictions

Mar 27, 2019

On March 27, 2019, the Canadian Public Accountability Board (CPAB) released a list of the foreign Jurisdictions where it has Memorandums of Understanding agreements currently in place or under negotiation.

Review the list on the CPAB's Web Site.

Deloitte's Julie Corden reappointed to the AASB

Mar 25, 2019

On March 25, 2019, the Auditing and Assurance Standards Oversight Council (AASOC) announced membership changes to the AASOC and the Auditing and Assurance Standards Board (AASB) effective April 1, 2019.

Julie Corden, CPA, CA, Partner, Deloitte LLP, was reappointed for a three-year term ending on March 31, 2022.

Review the full list of appointments on the AASOC's website.

PCAOB Staff provides guidance in advance of CAM effective dates

Mar 18, 2019

On March 18, 2019, the Public Company Accounting Oversight Board released three staff guidance documents developed to support implementation of the new critical audit matter (CAM) requirements.

Auditors will soon be required to communicate CAMs in the auditor’s report under the standard, AS 3101, "The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion".

The staff guidance consists of the following:

  1. a high-level overview of CAM requirements
  2. thematic observations that arose from the Office of the Chief Auditor’s review of audit firms’ CAM methodologies
  3. a deeper dive on the determination of CAMs

While these documents primarily offer insights for auditors, the high-level overview—“The Basics”—may also be of interest to preparers, audit committees, and investors.

Review the press release on the PCAOB's website.

PCAOB issues staff guidance on implementing CAM requirements

Mar 18, 2019

On March 18, 2019, the Public Company Accounting Oversight Board (PCAOB) issued three staff guidance documents related to the implementation of the new critical audit matter (CAM) requirements.

The documents consist of a high-level overview, staff observations from a review of audit methodologies, and a deeper dive on the determination of CAMs.

These documents were informed by discussions with auditors regarding their experiences conducting dry runs of CAMs with their audit clients, the staff’s review of methodologies submitted by 10 U.S. audit firms that collectively audit approximately 85% of large accelerated filers, and other outreach efforts. The Board and staff will continue to monitor CAM implementation and determine if further guidance is needed.

Review the press release on the PCAOB’s website.

PCAOB posts 2019 staff inspections outlook for audit committees

Mar 14, 2019

On March 14, 2019, the Public Company Accounting Oversight Board (PCAOB) published the "2019 Staff Inspection Outlook for Audit Committees". The Board’s new strategic plan anticipated enhanced external engagement and more proactive communication with stakeholders, including audit committees, to inform them about the PCAOB’s core activities—including inspections—and to maintain an ongoing dialogue with them.

This Audit Committee Outlook provides an overview of what audit committees should expect from the PCAOB’s 2019 inspections as a supplement to the 2019 Inspections Outlook issued in December 2018.

Review the 2019 Staff Inspection Outlook for Audit Committees on the PCAOB's website.

In-Brief Podcast – The IAASB’s Exposure Draft on Quality Management is Now Available for Comment

Mar 12, 2019

On March 12, 2019, the Auditing and Assurance Standards Board (AASB) released a podcast that provides a plain and simple overview of the key highlights of the IAASB’s Exposure Draft on quality management at the firm and engagement level.

The Exposure Draft, issued as four separate documents, includes:

  1. a significantly revised firm standard – now referred to as the International Standard on Quality Management;
  2. a new standard dealing with engagement quality reviews;
  3. a revised International Standard on Auditing dealing with quality management for audits of financial statements; and
  4. an overall explanatory memorandum that sets out significant issues common to all three Exposure Drafts and discusses the proposed effective date and implementation period.

The IAASB introduced a new approach to achieving quality at the firm level, called “quality management,” driving the change to the name of the standards. This approach is risk-based and focuses on proactively identifying and responding to risks to quality. The standard sets out quality objectives and includes some required responses to risks, but not all. Firms will need to determine what additional responses are necessary to address those risks. This approach allows firms to tailor their systems of quality management to reflect the nature and circumstances of the firm and the engagements it performs. As a result, the standards can be scaled to firms of different sizes.

Listen to the podcast and review the transcript on the AASB's website.

Audit regime in the UK to be transformed with new regulator

Mar 11, 2019

On March 11, 2019, the Business Secretary Greg Clark announced a new enhanced regulator to transform the audit and accounting sector in response to the comprehensive Independent Review led by Sir John Kingman. As per the review’s recommendations, the Financial Reporting Council (FRC) will be replaced with a new regulator called the Audit, Reporting and Governance Authority.

The new regulator will for the first time:

  • be a statutory body with powers such as those to make direct changes to accounts rather than apply to court to do so, and more comprehensive, visible reviews for greater transparency
  • have strategic direction and duties to protect the interests of customers and the public by setting high standards of statutory audit, corporate reporting and corporate governance, and by holding companies and professional advisors to account
  • regulate the biggest audit firms directly (rather than those being delegated)
  • have a new, diverse board and strong leadership to change the culture and rebuild respect of those it regulates

There will also be greater sanctions available in cases of corporate failure, including new powers to require rapid explanations from companies and in the most serious cases publish a report about the company’s conduct and management.

Review the press release on the UK Government's website.

CPAB industry forum highlights

Mar 06, 2019

On March 6, 2019, the Canadian Public Accountability Board (CPAB) released three new industry forum highlights on mining, real estate and financial institutions.

The Forum featured roundtable discussions about matters that are top of mind for audit committees of Canadian companies in these industries.

Access the industry highlights below:

Basis for Conclusions – Auditing Accounting Estimates and Related Disclosures

Mar 01, 2019

On March 1, 2019, the Auditing and Assurance Standards Board (AASB) published a document that summarizes the process the AASB followed in making revisions to CAS 540, Auditing Accounting Estimates and Related Disclosures.

CAS 540 contains no amendments to the ISA wording. This is consistent with the position taken by the AASB in ED-CAS 540.

The Basis for Conclusions includes:

  • Request for additional guidance
  • Significant concerns over operationalizing the requirements
  • Joint policy statement concerning communications with actuaries

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

Basis for Conclusions – Auditor’s Consent to the Use of the Auditor’s Report in Connection with a Designated Document

Mar 01, 2019

On March 1, 2019, the Auditing and Assurance Standards Board (AASB) published a summary of the process followed in revising Section 7170 and the Board’s conclusions regarding significant comments received in response to its Exposure Draft.

The AASB’s objective in revising Section 7170 is to address the auditor’s responsibilities in responding to requests to consent to the use of the auditor’s report in connection with designated documents. The public interest considerations in revising Section 7170 include:

  • Clarifying the structure of the CPA Canada Handbook – Assurance;
  • Addressing the auditor’s deemed association with the Annual Information Form in Section 7500;
  • Setting out appropriate work effort;
  • Clarifying the auditor’s responsibilities relating to Other Information under CAS 720;3 and
  • Addressing the format of the auditor’s consent.

The effective date of the revised Section 7170 is for consents issued on or after June 1, 2019.

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

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.