This summary of decisions 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.
Effect of COVID-19 on AASB Operations
AASB Annual Plan
The AASB received an update how COVID-19 affects its 2020-2021 Annual Plan activities. As part of the update, the Board decided to reschedule all in-person meetings as online meetings until at least September 2020. The Board also supported the development of new models for consultations related to its group audits exposure draft and revised quality management standards.
Effective date of CAS 540
The AASB discussed the effective date of Canadian Auditing Standard (CAS) 540, Auditing Accounting Estimates and Related Disclosures, and whether it should be deferred. The Board considered the public interest implications of a deferral and decided that no deferral is necessary because:
- planned non-authoritative guidance is on track to be issued in a timely manner, providing sufficient time for practitioners to prepare;
- outreach to other national auditing standard setters shows none are considering deferring the effective date of their equivalent standards; and
- an effective date that is not aligned with the International Standard on Auditing (ISA) 540 will be a problem for global audits.
The Board will continue to actively monitor the current environment for further developments and communicate to stakeholders, as necessary.
Other
Canadian Public Accountability Board
The AASB received a presentation from three Canadian Public Accountability Board (CPAB) representatives. They discussed findings from the 2019 CPAB Audit Quality Insights Report and the actions CPAB is taking to identify challenges auditors are facing in the current environment.
Non-GAAP Financial Measures
The AASB discussed the audit implications of the management performance measure (MPM) proposals in the International Accounting Standards Board (IASB) Exposure Draft, “General Presentation and Disclosures.” It discussed the interaction between the IASB’s Exposure Draft proposals on MPMs and the Canadian Securities Administrators (CSA) Proposed National Instrument (NI) 52-112, Non-GAAP and Other Financial Measures Disclosure. The Board discussed key points to consider in its response letter to the IASB. It also reviewed a draft response letter to the CSA on its Proposed NI. The Chair and Director will review the final CSA response letter prior to submission.
The AASB will continue to discuss the IASB’s Exposure Draft and a draft Board response letter at a future meeting.