AASOC

AASOC Annual Report 2022-2023

Chair Message

Photo of Kevin Nye. As we close in on the fourth year of the pandemic, I am reminded of the fact that change is the only constant. Navigating change at a fast pace can be challenging for any organization but FRAS Canada is well-positioned to manage uncertainty, create opportunities for innovation, and ensure we are fit for the future. Our focus on serving the public interest remains unchanged as we continue to oversee the activities of the Auditing and Assurance Standards Board (AASB) in these times of disruption. To that end, the Auditing and Assurance Standards Oversight Council (AASOC) has been active in several integral projects over the last year.

The Independent Review Committee on Standard Setting in Canada (IRCSS) issued its final report on March 1, 2023. Through their rigorous review process, 26 recommendations were made that encompass organizational structure, governance, equity, diversity and inclusion, and independence. A task force has been struck with representation from CPA Canada, AASOC, and the Accounting Standards Oversight Council (AcSOC) to assess the recommendations of the IRCSS final report and provide input back to CPA Canada, AASOC and AcSOC for their final approval and action. This review is anticipated to be completed in the Fall of 2023.

As recommended by the IRCSS, an effectiveness review has begun to assess the operations, efficiency, and effectiveness of AASOC and AcSOC with a focus on ensuring that oversight of standard setting is well positioned for the future. The task force is comprised of an equal representation of AASOC and AcSOC members and will consider oversight effectiveness and provide advice to the Councils in the Fall of 2023.

In response to international developments relative to environmental, social and governance issues, the formation of the International Sustainability Standards Board (ISSB), and the recommendations from the IRCSS report, the two councils approved the formation of the Canadian Sustainability Standards Board (CSSB). With the support of an Implementation Committee, the CSSB has been established and announced the inaugural Chair and first cohort of members, appointed on April 1, 2023. We look forward to leading in this space.

Core to our mandate for effective oversight and governance is the operation of the Performance Review Committee (PRC) and the Nomination Governance Committee (NGC). The PRC monitors and evaluates the performance of the AASB to ensure it considers the public interest and the needs of its interested parties in standard setting. The NGC provides recommendations on the appointments and reappointments to the AASB and AASOC in addition to advising on governance matters.

As of March 31, 2023, Sheila Filion and Johnny Walker have concluded their terms with AASOC. Their significant contributions to the work of the Council have been truly appreciated. We wish them well with their next endeavour. I am proud of the work carried out by our volunteers and staff and grateful for the engagement from the community of interested parties. Your commitment to our mandate allows us to continue to produce important work in the public interest. Looking forward to another productive year for 2023-2024.

Kevin Nye
AASOC Chair

Performance Reviews

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In addition to monitoring and evaluating the performance of the AASB, we also ensure due process is followed by receiving regular reports from the Board and reviewing the effectiveness of its processes. We also encourage observers to the AASB meetings.

The PRC monitors and evaluates the performance of the AASB on an annual basis. The Committee provided input into the Board’s 2023-2024 Annual Plan and 2022-2023 Annual Report. Lastly, the PRC has free-flowing dialogues with the AASB’s Chair on pressing issues that the Board is managing.

Key AASB 2022-2023 Successes

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We agreed that the AASB achieved the majority of the objectives set out in its 2022-2023 Annual Plan, with key successes that included:

launching a standard-setting project on Sustainability Assurance;
approving three Exposure Drafts and finalizing revisions to one standard;
engaging with interested and affected parties through 137 outreach sessions, webinars, presentations, meetings, surveys, and roundtable discussions;
completing post-implementation research on the Canadian Key Audit Matter (KAM) reporting experience; and
authoring or supporting the development of 18 articles of guidance or communication, and two webinars on emerging issues and assurance standards to meet the needs of practitioners and provide thought leadership.

See the AASB’s Annual Report for full details.

By the Numbers

Read about AASB’s communications and outreach activities this year, including key statistics.

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Independence Standing Committee

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The Independence Standing Committee’s (ISC) mandate is to assist the Public Trust Committee (PTC) in serving the public interest by recommending high-quality independence standards for proposed adoption by the Canadian profession’s provincial bodies in their own provincial codes of ethics for use by all Canadian CPAs. AASOC has a limited oversight role with respect to the ISC’s activities and receives regular updates and information at its meetings.

In 2022-2023, the ISC exposed for public comment in Canada proposed changes to the Independence requirements of the International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional Accountants (the IESBA Code) related to Technology and concerning Engagement Team - Group Audits Independence. The ISC also recommended, and the PTC approved, a project to update the Canadian Independence Standards by developing a definition of a ‘public interest entity’ that is aligned with the IESBA’s definition.

The ISC plans to consult broadly with provincial CPA bodies and other key stakeholders on the types of entities that should be treated as public interest entities and subject to more restrictive independence requirements. The ISC will also continue its work toward renewing the Canadian Independence Standards through closer alignment with the IESBA Code, subject to the PTC’s approval of its recommendations.

Our Year in Review

Continuous improvement of our oversight processes

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We continued to focus on evolving the role of the Council to become more strategic by performing an effectiveness review, improving our processes, staying abreast of international issues, and updating certain governing processes and documents, including our terms of reference.

International standard-setting developments, the final report from the IRCSS, and the development of the Canadian Sustainability Standards Board were important discussion topics this year. They gave us opportunities to explore new ways to meet the changing needs of interested and affected parties more quickly and effectively.

Retirements, Appointments and Reappointments

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We are pleased to announce new appointments and reappointments to AASOC, and the AASB, and we thank those retiring this year. See the appointments page for full details.

Members

Headshots of AASOC members

First row L-R: Kevin Nye (Chair), Anne-Marie Ethier (member), Beili Wong (member), Donald Newell (member)
Second row L-R: Donna Bovolaneas (member), Fred Pries (member), Gary Hannaford (member), Ian Bandeen (member)
Third row L-R: Janet Grove (member), Magatte Ndiaye (member), Michael Tambosso (member), Neil Sinclair (member)
Fourth row L-R: Paul Winton (member), Kenneth Leung (non-voting member), Stacy Hammett (non-voting member)
Not pictured: Carla-Marie Hait (member)