This decision summary of the Auditing and Assurance Standards Board (AASB) has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on projects and other matters, which might change after further deliberations by the AASB. Decisions to publish exposure draft and Handbook material are final only after a formal voting process.
Canadian Auditing Standards (CASs)
Group Audits
The AASB provided input to the International Auditing and Assurance Standards Board (IAASB) members from Canada on the IAASB’s project to revise International Standard on Auditing (ISA) 600, Special Considerations — Audits of Group Financial Statements (Including the Work of Component Auditors). The Board discussed:
- the use of a top-down, risk-based approach to scoping group audits;
- definitions of component, significant component and group engagement team; and
- the need for further clarification of component materiality considerations.
The Board will continue to discuss this project at future meetings.
Identifying and Assessing the Risk of Material Misstatement
The AASB provided input to the IAASB members from Canada on issues related to the responses received on the Exposure Draft of proposed ISA 315 (Revised), Identifying and Assessing the Risk of Material Misstatement. The Board discussed the IAASB’s proposed changes to:
- understanding of the entity’s system of internal control;
- individual components of internal control;
- separate assessment of inherent and control risk; and
- concepts of relevant assertions and significant classes of transactions, account balances and disclosures.
The Board will continue to discuss this project at future meetings.
Assurance and Related Services Standards (other than CASs)
Agreed-upon Procedures
The AASB considered Canadian stakeholders’ views on its Exposure Draft of proposed Canadian Standard on Related Services (CSRS) 4400, Agreed-Upon Procedures Engagements, and finalized its response letter to the IAASB Exposure Draft.
Auditor’s Consent to the Use of a Report of the Auditor included in an Offering Document
The AASB supported CPA Canada’s development of non-authoritative guidance to clarify that the auditor’s consent is provided by the firm and not the engagement partner.
Compilation Engagements
The AASB discussed key issues stakeholders raised on the Exposure Draft, “Compilation Engagements,” including:
- the scope of the standard;
- engagement acceptance and continuance;
- disclosure of the basis of accounting; and
- ·obtaining knowledge of the entity.
The Board will continue to discuss these issues at future meetings.
Public Sector Auditing Standards
The AASB reviewed the draft Assurance and Related Services Guideline (AuG) 50, Conducting a Performance Audit in the Public Sector in Accordance with Canadian Standard on Assurance Engagements (CSAE) 3001. The Board suggested several editorial changes to the draft Guideline.
The Board is expected to approve an exposure draft of AuG-50 at its next meeting.
AASB Planning
Annual Plan
The AASB unanimously approved the 2019-2020 Annual Plan, which will be published following review and approval by the Auditing and Assurance Standards Oversight Council.
Other
Audits of Less Complex Entities
The AASB provided input to the IAASB members from Canada on the proposed Discussion Paper, “Audits of Less Complex Entities: Exploring Possible Options to Address the Challenges.” A member of the IAASB’s Less Complex Entities Working Group participated in the AASB’s discussion of this topic.
The IAASB is expected to approve the Discussion Paper at its March 2019 meeting, and issue it for public comment in April 2019. The AASB will then consider what activities to undertake to obtain Canadian stakeholders’ views on the Discussion Paper.