Meeting Minutes
The Auditing and Assurance Standards Oversight Council (AASOC) met on September 28, 2023. The meeting was hosted virtually on the Zoom platform.
Call to Order
AASOC Chair Kevin Nye called the meeting to order at 10:05 a.m. (EST). An in-camera session for council members was held from 9:30 a.m. to 10:05 a.m.
Approval of Minutes
The minutes from July 6, 2023, were updated to include Ian Bandeen as being present. AASOC approved the minutes from July 6, 2023, as amended.
Chair’s Opening Remarks
Mr. Nye shared a land acknowledgment to begin the meeting.
AASB Chair’s Report and Update
Bob Bosshard, Chair of the AASB, and Karen DeGiobbi, Director of the AASB, provided an update on key Board activities. The materials included a summary of key activities, such as international and domestic projects currently in progress, and two due process confirmations.
The Exposure Draft, “Canadian Standard on Sustainability Assurance 5000, General Requirements for Sustainability Assurance Engagements,” was approved on August 30, 2023. A question was asked about what a Canadian amendment might entail.
A significant number of the Canadian amendments deal with ethics and independence and converting references to the International Ethics Standards Board for Accountants’ (IESBA) Code to the Canadian code. The IESBA is developing ethics and independence standards for sustainability that have been written on a practitioner-neutral basis.
In addition, the AASB has drafted a potential Canadian amendment to consider how the standard may address consultation with Indigenous Peoples at the pre-acceptance stage of a sustainability assurance engagement. A question was posed on how consultation will happen with Indigenous Peoples. Planning for outreach is under way to leverage networks to build awareness for what is being considered.
There was robust engagement with the Exposure Draft, “Proposed Amendments to Canadian Auditing Standard 570, Going Concern.” A question was asked about how the AASB proceeds if there is a disagreement with an element of the international standard. Once the IAASB has carried out its deliberations, the AASB does a thorough review of the comments that were raised during the exposure period and how those comments were managed. If the matter was not managed to the AASB’s satisfaction, it would consider whether such matter would meet its Canadian amendment criteria.
The Public Trust Committee’s Independence Standing Committee presented to the AASB at its September meeting on its upcoming consultation paper on the definition of “public interest entity” (PIE). The Board has two ongoing related projects. Both projects were driven internationally by the changes approved by the IESBA. The projects involve two tracks. Track 1 deals with enhancement to transparency about relevant ethical requirements for independence applied for certain entities when performing an audit of financial statements. Track 2 is to determine whether to adopt the revised IESBA Code definitions of “public interest entities” and “publicly traded entities”, and whether to amend the applicability of the existing differential requirements for listed entities in international auditing standards.
Due Process Confirmation: PIE Track 1
A council member wanted to get a better understanding of the limited applicability of the changes in Canada. In Canada, independence standards currently have no similar transparency requirement as the IESBA. Therefore, the new auditor reporting transparency requirement is conditional and fits within the Canadian context, both current and future. However, regardless of whether there is an external reporting transparency requirement, practitioners should communicate to those charged with governance the ethics and independence standards followed, and a non-conditional requirement is included in this regard.
A question was asked about how advisory group members are selected. There is a public call for members. Additionally, networks are leveraged. The AASB decides on the area of expertise needed along with other considerations like geographic location and professional experience. Staff performs an analysis of candidates and provides recommendations to the Director and Chair to make final decisions on composition.
It was moved by Gary Hannaford, seconded by Don Newell;
Be it resolved:
That the Accounting and Auditing Standards Oversight Council confirms due process was followed with proper regard to the public interest in making narrow-scope amendments to CAS 700, Forming an Opinion and Reporting on Financial Statements, and CAS 260, Communication with those Charged with Governance.
Unanimously carried.
Due Process Confirmation: Corrections to CSRS 4400
The amendments to Canadian Standard on Related Services (CSRS) 4400, Agreed-upon Procedures Engagements, relate to corrections of inconsistencies noted during a review of how a Canadian amendment has been processed to deal with ethics and independence matters. At the September meeting, the AASB voted unanimously to not issue an exposure draft and to approve the amendments to CSRS 4400.
A member raised the issue that the rules of professional conduct refer to auditing procedures, not agreed-upon procedures, related to independence; and asked whether the Public Trust Committee has addressed this difference. Ms. DeGiobbi acknowledged that when the standard was being developed and prior to finalization, the difference was noted and raised with the Public Trust Committee and the Independence Standing Committee; and explained that independence rules are outside of the AASB’s remit. The Public Trust Committee would be the most appropriate party to speak to activities related to this matter.
It was moved by Gary Hannaford, seconded by Carla-Marie Hait;
Be it resolved:
That the Accounting and Auditing Standards Oversight Council confirms due process was followed with proper regard to the public interest in making amendments to correct CSRS 4400.
Unanimously carried.
Adjournment
Having no other business, the Chair adjourned the public portion of the meeting at 11:00 a.m.