News

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AASB: Revised JPS concerning communications between Auditors and Actuaries approved

Feb 01, 2023

On February 1, 2023, the Au­dit­ing and As­sur­ance Stan­dards Board (AASB) announced that the revised Joint Policy Statement (JPS), effective for communications between the auditor and the actuary involved in the preparation of financial statements that are initiated on or after March 31, 2023, has been approved by both the Canadian Actuarial Standards Board and by the AASB. Early application is permitted.

A copy of the revised JPS can be obtained on the AASB’s website.

The JPS will be added to the CPA Canada Handbook, Assurance shortly, as an appendix to CAS 500, Audit Evidence.

 

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IASB issues “In Brief” which discusses merger and acquisition disclosures and goodwill accounting

Jan 31, 2023

On Jan­u­ary 31, 2023, the IASB has issued an article ‘In Brief’ which discusses two decisions related to the Business Combinations — Disclosures, Goodwill and Impairment project.

Specifically, IASB member Rika Suzuki takes a look into (i) how companies could disclose better information about business combinations and (ii) whether to retain the impairment-only model to account for goodwill or to explore reintroducing amortization of goodwill.

For more information, see the press release and ‘In Brief’ article on the IFRS Foundation’s website.

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Updated IASB and ISSB work plan — Analysis (January 2023)

Jan 30, 2023

Following the IASB's and ISSB's January 2023 meetings, we have analyzed the work plan on the IFRS Foun­da­tion website to see what changes have resulted from the meetings and other de­vel­op­ments since the work plan was last revised in December 2022.

Below is an analysis of all changes made to the work plan since our last analysis on December 19, 2022.

Stan­dard-set­ting projects

Main­te­nance projects

Research projects

Strategy & gov­er­nance projects

Other projects

The above is a faithful com­par­i­son of the IASB and ISSB work plan at December 19, 2022 and January 30, 2023 respectively. For access to the current work plan at any time, please click here.

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IAASB Opens Consultation on Less Complex Group Audits

Jan 24, 2023

On Jan­u­ary 24, 2023, the In­ter­na­tional Au­dit­ing and As­sur­ance Stan­dards Board (IAASB) opened the public consultation for a group audit-specific section of the proposed auditing standard for less complex entities (LCEs). The proposed section, Part 10, Audits of Group Financial Statements, is intended to form part of the proposed International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) when finalized. The Exposure Draft is open for public comment until May 2, 2023.

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.

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AASB Guide regarding the impact of recent amendments to IAS 1

Jan 24, 2023

On January 24, 2023, the Auditing and Assurance Standards Board (AASB) issued a guide to address how the International Accounting Standards Board’s (IASB) narrow-scope amendments to International Accounting Standard (IAS) 1, Presentation of Financial Statements affect the Canadian Auditing Standards (CASs) and Canadian Standard on Review Engagements (CSRE) 2400, Engagements to Review Historical Financial Statements.

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.

 

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AcSB Exposure Draft: International Tax Reform – Pillar Two Model Rules (Amendments to IAS 12)

Jan 24, 2023

On January 24, 2023, the Ac­count­ing Stan­dards Board (AcSB) has issued an Exposure Draft, entitled “International Tax Reform – Pillar Two Model Rules (Amendments to IAS 12)”. Comments are requested by March 10, 2023.

The AcSB Exposure Draft is similar to the Exposure Draft of the same name recently issued by the IASB, and reflects proposals made by the IASB that the AcSB intends to adopt, subject to deliberating comments received, as Canadian generally accepted accounting principles.

The AcSB encourages Canadian stakeholders to respond to the IASB on its Exposure Draft. Specific questions on which the IASB would like input are provided in the Invitation to Comment in its Exposure Draft. The AcSB requests that comment letters be sent directly to the IASB with a copy to the AcSB. Comments to the IASB are due by March 10, 2023. Responses to the AcSB on its Exposure Draft are due on the same date.

Re­view the Exposure Draft  on the AcSB's web­site.

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PCAOB Proposes New Standard for the Auditor’s Use of Confirmation

Jan 20, 2023

The Public Company Accounting Oversight Board (PCAOB) issued for public comment a proposed new standard that, if adopted, would strengthen and modernize the requirements for the auditor’s use of confirmation. Comments are requested by February 20, 2023.

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.

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OECD Pillar Two: Information return and safe harbors published

Jan 19, 2023

The OECD has published an implementation package relating to the Pillar Two global minimum tax rules, which includes guidance on safe harbors and public consultation documents on a standardized information return and tax certainty.

Review the article

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OECD Pillar One Amount A: Digital services taxes and relevant similar measures

Jan 19, 2023

As part of the ongoing work on a two-pillar approach to global tax reform, the OECD published a consultation document on draft multilateral convention provisions on the removal of digital services taxes and other relevant similar measures relating to the new taxing right under Amount A of Pillar One.

Review the article

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SEC Announces Spring 2022 Regulatory Agenda

Jan 16, 2023

The Securities and Exchange Commission (SEC) released the Spring 2022 Unified Agenda of Regulatory and Deregulatory Actions. The report, which includes contributions related to the Securities and Exchange Commission, lists short- and long-term regulatory actions that administrative agencies plan to take.

Review the press release and rulemaking list on the SEC's website.

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