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)
Audit Evidence
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) 500, Audit Evidence.
Key issues discussed included:
- revising definitions of “audit evidence”, “appropriateness”, and “sufficiency”;
- sourcing information to be used as audit evidence;
- modernizing and enhancing the descriptions of audit procedures; and
- providing guidance that addresses whether an audit procedure can be used to address the objectives of both a risk assessment procedure and a substantive audit procedure.
Audits of Less Complex Entities (LCEs)
The AASB provided input to the IAASB members from Canada on the IAASB’s project to develop a separate standard for audits of LCEs.
Key issues discussed included:
- the conventions used in drafting the separate standard;
- the proposed description of the characteristics of an LCE to consider when deciding when to apply the separate standard;
- the proposed approach to maintaining alignment of the separate standard with the ISAs; and
- the additional matters that the project should explore, including how to transition from the separate standard to the ISAs when an entity no longer qualifies as an LCE.
The AASB also discussed how to proceed in Canada in relation to the IAASB’s issuance of an exposure draft of a separate standard for audits of LCEs.
The AASB will continue its discussion on the way forward in Canada at its May meeting.
Group Audits
The AASB provided input to the IAASB members from Canada on issues related to the IAASB’s project to revise ISA 600 (Revised), Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors).
Key issues discussed included:
- revising the definition for “group financial statements”;
- developing an overall group audit strategy;
- communicating between group auditors and component auditors; and
- clarifying documentation requirements.
Quality Management
The AASB discussed matters related to its proposed exposure draft addressing conforming amendments to other Canadian standards, resulting from the January 2021 approval of Canadian Standard on Quality Management (CSQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements.
The AASB expects to review an exposure draft at its April meeting.
Assurance and Related Services Standards (other than CASs)
Extended External Reporting
The AASB provided input to the IAASB members from Canada on issues related to the IAASB’s draft “Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Extended External Reporting Assurance Engagements.”
Key issues discussed included:
- the extent to which the guidance and International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information, is relevant when extended external reporting information includes both non-financial and financial information; and
- he way forward for using the guidance in Canada.
Other
2021-2022 Annual Plan
The AASB reviewed the assumptions and process for developing the 2021-2022 Annual Plan. The Board will review a first draft of the Annual Plan at its May meeting.
International Ethics Standards Board for Accountant (IESBA) “Public Interest Entity” Definition
The AASB received an update on the IESBA’s Exposure Draft, “Proposed Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code.” The AASB decided that it will respond to the question in the Exposure Draft that aims to gather information to assist the IAASB in its deliberations on how the proposed IESBA changes affect the ISAs.
Understanding Stakeholders’ Evolving Needs
The AASB received an update on external developments, completed internal activities, and planned next steps to support understanding and responding to stakeholders’ evolving needs for assurance on information beyond the financial statements.