The report states that company-produced information (like invoices or IT system reports) and external information (like customer purchase orders or bank records) are critical in audits. In the 2021 and 2022 inspection cycles, around 17% of audited firms had deficiencies due to inadequate procedures for testing the accuracy and completeness of this information.

To improve audit quality, the Spotlight highlights:

• Common audit deficiencies
• Good practices
• Other reminders that may improve auditor understanding of how to properly test IPC and information from external sources.

Access the Spotlight report on the PCAOB’s website.

According to the AASB, the draft Strategic Plan 2026-2029 has been crafted carefully considering the changing environment and the diverse needs of interested and affected parties. Building on the foundation of the current strategy, the new plan now leverages the emerging issues monitoring process. It prioritizes an ongoing commitment to connect through a tailored engagement process. This iterative approach ensures that activities remain responsive to the needs of the community in the face of emerging challenges and opportunities.

The strategic goals for 2026-2029 are as follows:

• Monitor and understand emerging issues in the changing environment to better anticipate standard setting needs.
• Engage and collaborate with interested and affected parties to understand their needs and expectations.
• Set high-quality standards and guidance that respond to the evolving needs and expectations of interested and affected parties.
• Enhance standard-setting processes and capabilities to develop timelier solutions.
• Support the effective implementation and application of standards and guidance to enhance consistency and quality in engagement performance.

The response deadline to collect inputs through the survey is June 28, 2024.

Access the draft strategic plan and the survey on the AASB’s website.

The new strategy reaffirms the IAASB's commitment to serving the public interest by developing globally accepted audit, review, and other assurance standards.

Key highlights of the strategy include:

• Completing priority audit and assurance projects, emphasizing fraud, going concern, and sustainability assurance.
• Commencing new initiatives and projects, including focusing on supporting the adoption and implementation of the overarching standard for sustainability assurance engagements, establishing an IAASB Technology Position, and conducting post-implementation reviews, as well as standard setting on, among other topics, audit evidence and risk response, materiality, and reviews of interim financial information.
• Collaborating with official stakeholders across the external reporting ecosystem, including the International Ethics Standards Board for Accountants (IESBA), regulators, standard setters, and other stakeholders.
• Engaging with regulatory and standard-setting partners to strengthen trust in markets globally.
• Further, the Monitoring Group’s recommendations will be implemented to enhance independence and accountability in standard settings.

Access the press release on the IAASB’s website.

The firm and engagement metrics proposal would, if adopted, require PCAOB-registered public accounting firms that audit one or more issuers that qualify as an accelerated filer or large accelerated filer to publicly report specified metrics relating to such audits and their audit practice.

The proposal sets out standardized firm- and engagement-level metrics that PCAOB staff believes would create a useful dataset available to investors and other stakeholders for analysis and comparison. The proposed metrics cover (1) partner and manager involvement, (2) workload, (3) audit resources (4) experience of audit personnel, (5) industry experience of audit personnel, (6) retention and tenure, (7) audit hours and risk areas (engagement-level only), (8) allocation of audit hours, (9) quality performance ratings and compensation (firm-level only), (10) audit firms’ internal monitoring, and (11) restatement history (firm-level only).

The proposal would require reporting of firm-level metrics annually on a new Form FM, for firms that serve as the lead auditor for at least one accelerated filer or large accelerated filer. Reporting of engagement-level metrics for audits of accelerated filers and large accelerated filers would happen via a revised Form AP, which would be renamed “Audit Participants and Metrics.” Finally, the proposal would allow, but not require, limited narrative disclosures on both Form FM and Form AP to provide context and explanation for the required metrics.

The firm reporting proposal would, if adopted, amend the PCAOB’s annual and special reporting requirements to facilitate the disclosure of more complete, standardized, and timely information by registered public accounting firms. As is current practice, much information would be disclosed publicly, and some would be available to the PCAOB only for oversight.

The Board is proposing to enhance the required reporting of information by registered firms on the PCAOB’s public Annual Report Form, also known as Form 2, and the Special Reporting Form, also known as Form 3, in several key areas (financial information, governance information, network information, special reporting and cybersecurity).

The deadline for public comment on both proposals is June 7, 2024.

Access the press release on the PCAOB’s website.

The video series includes the following:

• Overview of Key Changes: Gain an understanding of the critical changes proposed by IAASB Member and Fraud Task Force Chair Julie Corden, a partner with Deloitte Canada. Julie also provides brief background information on why these changes are being proposed.
• Spotlight on Auditor’s Responsibilities: Understand auditors’ responsibilities relating to fraud in an audit. IAASB Senior Manager Nathalie Baumgaertener Dutang explains how the proposed changes make these responsibilities more transparent and practical.
• Auditor’s Response to Fraud or Suspected Fraud: How are auditors and engagement partners being asked to enhance how they respond to fraud or suspected fraud? IAASB Principal Angelo Giardina outlines the new requirements, relocated requirements, and clarifications.
• Enhanced Transparency in the Auditor’s Report: Join IAASB Director Jasper van den Hout to learn more about how the proposed changes will improve transparency in the auditor’s report regarding auditors’ responsibilities relating to fraud as well as fraud-related procedures (i.e., Key Audit Matters related to fraud).

The revisions to ISA 240 represent a substantial enhancement of auditors’ duties concerning fraud. The IAASB urges all stakeholders to provide feedback using the Response Template, which aims to enable organized responses and simplify the collection and analysis of feedback. Stakeholders are welcome to contribute their perspectives by June 5, 2024.

Access the exposure draft on revisions to ISA 240 on the IAASB’s website.

Inspection results are mixed with inconsistency across all categories of firms. While there was an improvement in the aggregate findings rates at the non-annually inspected firms, the level of findings at many firms remains unacceptably high. CPAB continues to see a strong association between audit quality and robust systems of quality management.

In 2023, CPAB initiated the public release of notable enforcement measures from inspection findings. Additionally, CPAB conducted a public follow-up discussion on regulatory modifications concerning the compulsory sharing of inspection reports with audit committees and the publication of individual firm inspection reports. CPAB anticipates that these adjustments will positively influence audit quality in Canada by offering enhanced transparency to the public regarding our inspection outcomes and the activities of audit firms overseeing Canadian reporting issuers.

Access the 2023 Annual Report on CPAB’s website

The Independent Review Committee on Standard Setting in Canada recommended that an effectiveness review be conducted with the assistance of an independent third party to help streamline and harmonize oversight activities and processes. In response to the results, the Effectiveness Review Joint Taskforce and the current oversight councils approved that a single council be created to oversee standard setting for accounting, audit and assurance, and sustainability.  

This decision consolidates the activities of three oversight bodies – the Auditing and Assurance Standards Oversight Council (AASOC), Accounting Standards Oversight Council (AcSOC), and the Canadian Sustainability Standards Board (CSSB) Implementation Committee – streamlining the processes and activities for accounting, audit, assurance, and sustainability standard setting.

The Oversight Council is effective from April 1, 2024, and will focus its initial work on establishing its operations and governance processes. It will begin its formal oversight work on July 1, 2024. The current oversight bodies will conclude their operations on June 30, 2024.

Access the press release on the FRASCanada website.

The 2022-2025 Strategic Plan outlines five strategic goals and supporting objectives while the Annual Plan includes specific activities that will support the achievement of these objectives.

The strategic goals for 2022 – 2025 are as follows:

• Monitor and understand emerging issues in the changing environment to better anticipate standard setting needs.
• Engage and collaborate with interested and affected parties to understand their needs and expectations.
• Set high-quality standards and guidance that respond to the evolving needs and expectations of interested and affected parties.
• Enhance our standard-setting processes and capabilities to develop timelier solutions.
• Support the effective implementation and application of standards and guidance to enhance consistency and quality in engagement performance.

Access the annual plan on the AASB’s website.

The high-level summary is designed to highlight non-assurance services, relationships, interests or circumstances that are prohibited for PIE audits. It will be a valuable reference to stakeholders, including regulators and audit oversight bodies, audit firms and individual audit practitioners, the corporate governance community, investors, preparers, and educational bodies or institutions.

The high-level summary is not a substitute for reading the Code.

Access the press release and the summary on the IESBA’s website.

As per its statement, the CAQ believes that the recent roundtable conducted by the Public Company Accounting Oversight Board (PCAOB) regarding its proposal on company noncompliance with laws and regulations (NOCLAR) fell short of the principles of transparency and accountability essential for effective public policy development.

“Today’s NOCLAR roundtable was a missed opportunity for the PCAOB to further understand the views highlighted in numerous comment letters from engaged stakeholders,” said Julie Bell Lindsay, Chief Executive Officer, CAQ. “Not only did the roundtable surface disagreement as to the actual scope or intention of the proposal, but we are concerned that the lack of diverse stakeholder representation – particularly from investors and audit committees, two important audiences – resulted in dialogue that did not meaningfully address stakeholder concerns. Given the discussion at the roundtable, we believe that the appropriate response is to re-propose the standard, with an economic analysis, to begin to address these concerns.” 

Access the statement on the CAQ website and the roundtable on the PCAOB’s website.