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.
Canadian Auditing Standards (CASs)
Group Audits
The AASB reviewed stakeholder feedback on its Exposure Draft, “Audits of Group Financial Statements (Including the Work of Component Auditors),” including the results of comprehensive outreach and consultation activities, such as field testing the proposed standard. The Board also reviewed draft responses to the International Auditing and Assurance Standards Board (IAASB) questions in its Exposure Draft of proposed International Standard on Auditing 600 (Revised), Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors) and Proposed Conforming and Consequential Amendments to Other ISAs.
The response letter will be submitted to the IAASB by the comment deadline of October 2, 2020.
Quality Management
The AASB discussed, and provided input to the IAASB members from Canada on issues related to:
- proposed International Standard on Quality Management (ISQM) (formerly International Standard on Quality Control) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements;
- proposed ISQM 2, Engagement Quality Reviews; and
- proposed ISA 220 (Revised), Quality Management for an Audit of Financial Statements.
Key issues discussed included:
- the placement of material relating to the public interest and whether it is best suited in the objective or introductory section in ISQM 1 and ISA 220; and
- material relating to human resources, including definitions and using the words “personnel” and “individuals” throughout ISQM 1 and ISA 220.
The AASB also discussed the results of a case study workshop that field tested the proposed requirements in ISQM 1. The feedback will assist the Board in making an informed decision about the scope of proposed Canadian Standard on Quality Management (CSQM) 1, and its potential applicability to related services engagements.
The IAASB approved final ISQM 1, ISQM 2, and ISA 220 (Revised) at its September 2020 meeting. The AASB plans to continue its discussions of key matters relating to the Canadian equivalent standards, including the scope of proposed CSQM 1, at its meeting in December 2020. The Board expects to approve the Canadian standards at its January 2021 meeting.
Assurance and Related Services Standards (other than CASs)
Extended External Reporting
The AASB discussed and provided input to the IAASB members from Canada on issues related to the IAASB proposals that address the comments from respondents on the Public Consultation Paper, “Proposed Non-Authoritative Guidance Extended External Reporting (EER) Assurance.”
Other
AASB 2022-2025 Strategic Plan
The AASB reviewed a second draft of its Draft Strategic Plan for 2022-2025, which reflects how the COVID-19 pandemic affects the Board’s strategic directions. The Board expects to approve the Draft Strategic Plan in December 2020, and issue it for stakeholder feedback in early 2021.
Fraud and Going Concern
The AASB received an update on recent international developments relating to fraud and going concern. The Board also discussed its planned outreach activities to obtain input on the recently issued IAASB Discussion Paper, “Fraud and Going Concern in an Audit of Financial Statements: Exploring the Differences Between Public Perceptions About the Role of the Auditor and the Auditor’s Responsibilities in a Financial Statements Audit.”