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 Standards on Quality Management
Quality Management
The AASB received a presentation related to the International Auditing and Assurance Board’s (IAASB) project to make conforming and consequential amendments to its non-International Standards in Auditing (ISAs) as a result of approving the quality management suite of standards. The AASB also received an update on the status of the Exposure Draft, “Quality Management – Conforming Amendments to Other Canadian Standards,” which has a comment deadline of September 30, 2021.
Canadian Auditing Standards (CASs)
Auditor Reporting Post-implementation Review
The AASB discussed issues related to the IAASB’s post-implementation review of auditor reporting. Key issues discussed included:
- whether the IAASB should undertake a follow-up post-implementation review focusing on key audit matters (KAM) reporting; and
- whether the material uncertainties section in an auditor’s report should be similar to KAM. In particular, the AASB discussed whether such material would be similar to close-call going concern assessments or set out the auditor’s procedures undertaken.
Joint Policy Statement on Communications between Actuaries and Auditors
The AASB unanimously approved a project proposal to revise the Joint Policy Statement Concerning Communications between Actuaries Involved in the Preparation of Financial Statements and Auditors, found in the Appendix to CAS 500, Audit Evidence.
Group Audits
The AASB discussed issues related to the IAASB’s project to revise ISA 600, Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors). Key issues discussed included:
- the need for guidance on using audit evidence from an audit conducted for statutory purposes, whether already completed or being performed; and
- how the group auditor determines whether, and to what extent, to review parts of the component auditor audit documentation.
The IAASB is expected to approve ISA 600 (Revised) at its December 2021 meeting. The AASB would approve CAS 600 in early 2022.
Assurance and Related Services Standards (Other than CASs)
Future-oriented Financial Information (FOFI)
The AASB received an update on its Compilation of FOFI project, including a revised timeline. The Board discussed the proposed approaches to using the FOFI Reference Group and to developing a new Canadian Standard on Related Services.
Securities Regulatory Developments
The AASB received an update from its Securities Regulations Advisory Group., including its analysis and recommendations relating to the Canadian Securities Administrators’ National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure and the proposed amendments to National Instrument 51-102 Continuous Disclosure Obligations and Other Amendments and Changes Relating to Annual and Interim Filings of Non-Investment Fund Reporting Issuers.
Other
AASB Terms of Reference
The AASB’s Terms of Reference require the Board to review them at least every three years. The Board discussed staff’s proposed approach to handling the required review. The Board agreed to defer the review by no more than a year, so that it can consider the implications of ongoing developments that may be relevant to the Terms of Reference.
Annual Planning
The AASB discussed the process for identifying and reporting emerging issues and their impact on standards and guidance.
Canadian Public Accountability Board
The AASB received a presentation from Canadian Public Accountability Board (CPAB) representatives. They discussed findings from the “CPAB Audit Quality Insights Report: 2020 Annual Audit Quality Assessments” and provided an update on CPAB projects relevant to the AASB and its activities.