Related Discussions

• Key Audit Matter Reporting / Engagement Partner Name – AASB

• Sep 09, 2019

• At its meeting on September 9- 10, 2019, the AASB unanimously approved amendments to CAS 700 which will require auditors to communicate key audit matters in the auditor’s report for audits of complete sets of general purpose financial statements of other listed entities for periods ending on or after December 15, 2022. This excludes listed entities required to comply with National Instrument 81-106, Investment Fund Continuous Disclosure. The Board concluded that the revisions to the standard are significantly different from the proposals issued in its Exposure Draft, but decided not to re-expose the changes as they were based on the feedback received on the Exposure Draft. Once the Auditing and Assurance Standards Oversight Council confirms that the AASB followed due process with proper regard for the public interest, the amendments will be included in the December 2019 Handbook update. The AASB also discussed the status of matters that caused the deferral of paragraph 46 of CAS 700. This paragraph relates to disclosure of the engagement partner name in certain audit reports. The Board concluded that deferring paragraph 46 has served its purpose and that the issues which led to the deferral have been resolved. Accordingly, paragraph C5B will be removed from the CPA Canada Handbook – Assurance in December 2020.

• Key Audit Matter Reporting – AASOC

• Jul 08, 2019

• At its meeting on July 8, 2019, the AASOC received an update from the AASB Chair regarding this issue. Mr. Charbonneau noted that the AASB had considered the purpose and reporting characteristics of an investment fund, disclosure, and liquidity regulations that apply to investment funds and the new information received as part of the Exposure Draft process. Having done so, the Board had decided to exclude entities required to comply with NI 81-106 from communicating KAM. With respect to the effective dates, he advised that the AASB had decided to defer the proposed effective date for auditors of entities within the scope of the Exposure Draft to financial statement periods ending on or after December 15, 2022. Mr. Charbonneau highlighted the public interest considerations of this decision, including that an extra year should result in higher-quality communications and that education is needed for all stakeholders in the financial reporting process. The AASB intends to approve Handbook changes in September 2019 and will seek AASOC’s approval of due process in October 2019. The Board plans to issue the new standard into the Handbook in December 2019.

• Other Considerations – Engagement Partner Name – AASOC

• Jun 13, 2019

• At its meeting on June 13-14, 2019, the AASOC received a presentation from the AASB Chair regarding this issue. Mr. Charbonneau advised that the one-year deferral the AASB approved in January 2019 will not be required after the stated December 15, 2019, end date. The International Practices Task Force’s (IPTF), a task force of the SEC Regulations Committee, minutes were issued as expected and confirm the SEC’s view that for certain Canadian entities that report to the SEC, a Canadian Auditing Standards report is not “filed” in the U.S.; it is “furnished.” A furnished audit report does not attract the same liability concerns as a filed report. Therefore, personal liability should not be a concern. Mr. Charbonneau also indicated the Board is not currently working on any project related to the engagement partner name. However, the Board knows the large firms are working through their legal counsel to resolve related issues.

• Key Audit Matter Reporting – AASOC

• Jun 13, 2019

• At its meeting on June 13-14, 2019, the AASOC received a presentation from the AASB Chair regarding this issue. Mr. Charbonneau highlighted that the AASB staff had received 20 comment letters and consulted with 75 individuals. One of the proposals set out in the Exposure Draft relates to communicating KAM for entities listed on exchanges other than the Toronto Stock Exchange (TSX). He commented that six letters were in support of extending KAM to entities listed on exchanges other than the TSX, three letters did not support this idea and the remaining letters did not comment on this proposal. On the issue of entities that are required to comply with National Instrument (NI) 81-106, the AASB proposed to expand KAM to apply to entities that are required to comply with NI 81-106, which applies to both listed and unlisted investment funds. The Board received two letters supporting the proposal, 10 letters not supporting, and the remaining letters not commenting on it. The AASB received mixed feedback on the new standard’s effective date. The Board will provide further information on its findings at the Council’s meeting on July 8, 2019. The Board intends to approve Handbook changes in September 2019 and issue the new standard in December 2019.

• Other Considerations: Engagement Partner Name – AASB

• Jun 10, 2019

• At its meeting on June 10-11, 2019, the AASB discussed the status of matters that gave rise to the deferral of paragraph 46 of CAS 700, Forming an Opinion and Reporting on Financial Statements, relating to disclosure of the engagement partner name in certain audit reports. The Board concluded that extension of the one-year deferral is not required. However, it will continue to monitor any issues related to inclusion of the engagement partner name in CAS auditor reports filed with the U.S. Securities and Exchange Commission.

• Other Considerations: Combined Report – AASB

• Jun 10, 2019

• At its meeting on June 10-11, 2019, the AASB discussed issues related to developing an auditor’s report that complies with the requirements of both Public Company Accounting Oversight Board (PCAOB) standards and CASs. Key issues discussed include the differences between the PCAOB standards and CASs for: (i) the descriptions of auditor responsibilities and other information; and (ii) critical audit matters versus KAMs. The AASB concluded not to continue work on developing such a report due to the significant differences between the standards and the challenges in developing a report that would be understood. However, the Board agreed on future steps to address public interest issues that arise when there are separate PCAOB and CAS auditor’s reports on one set of financial statements.

• Key Audit Matter Reporting – AASB

• Jun 10, 2019

• At its meeting on June 10-11, 2019, the AASB discussed key issues that stakeholders raised on the Exposure Draft, including: (i) the unique regulatory environment of entities that comply with National Instrument 81-106, Investment Fund Continuous Disclosure; (ii) the benefits and challenges of key audit matter (KAM) reporting for other listed entities and investment funds; and (iii) the proposed effective date. The AASB also discussed academic research that was conducted during the exposure period to identify whether there are benefits to KAM reporting for users of TSX-V financial statements. The Board expects to approve final Handbook material at its September 2019 meeting.

• Key Audit Matter Reporting and Other Considerations – AASB

• Jan 24, 2019

• During its December 14, 2018, conference call, the AASB unanimously approved amendments to the effective date of paragraph 46 of CAS 700. Paragraph 46 requires disclosure of the engagement partner name in the auditor’s report on financial statements of listed entities. At its meeting on January 24-25, 2019, in light of further information obtained since the December conference call, the Board decided that the amendments to the effective date of paragraph 46 will apply for one year. Therefore, paragraph 46 will not apply to audits of financial statements for periods ending before December 15, 2019, of entities whose engagement partner name appears on Form AP, Auditor Reporting of Certain Audit Participants, to be filed with the U.S. Public Company Accounting Oversight Board for that engagement. This amendment will allow time for stakeholders to evaluate issues relating to Canadian Generally Accepted Auditing Standards auditor’s reports that are required to be filed with the U.S. Securities and Exchange Commission. Once the Auditing and Assurance Standards Oversight Council confirms that the Board followed due process with proper regard for the public interest, the amendments will be included in a March 2019 Handbook update.

• Key Audit Matter Reporting – AASB

• Dec 03, 2018

• At its meeting on December 3-4, 2018, the AASB unanimously approved an exposure draft, “Communication of Key Audit Matters in the Auditor’s Report.” The exposure draft is expected to be issued in January 2019 and will have 90-day comment period.