Reports on Supplementary Matters

OBJECTIVE AND SCOPE OF THIS PROJECT

In recent years, auditors have been receiving more requests from various regulatory bodies for reports on information about the entities being audited.

(Read more)

These reports deal with matters that the auditor may become aware of while completing the financial statement audit but that go beyond the scope of that audit. There have also been requests from government funding agencies that auditors report separately on detailed schedules of information underlying financial statement items without doing any further audit work on these detailed schedules.

From time to time, practitioners have asked what standard should be applied when responding to these requests. Currently, there is no standard that specifically addresses this matter.

This project proposes to introduce a new Related Services Standard that would cover various types of information reported to a third party (for example, regulators or funding bodies).

Key issues that this project will address include:

  • How should “derivative reporting” be defined?
  • What is the nature and extent of guidance that the new standard should include?
  • How can the auditor clearly and effectively report to external parities on various matters in a manner that will be clear and minimize any user expectation gap?

(Hide)


PROJECT NEWS

Basis for Conclusions – CSRS 4460, Reports on Supplementary Matters Arising from an Audit or a Review Engagement
June 2, 2014. This document summarizes the process followed in developing this standard and the conclusions reached by the AASB regarding significant comments received in response to its Exposure Draft.

AASB Decision Summary – March 10-11, 2014
The AASB unanimously approved Canadian Standard on Related Services (CSRS) 4460, Reports on Supplementary Matters Arising from an Audit or a Review Engagement.

The AASB concluded that changes made in finalizing the standard were not significantly different from the proposals in the Exposure Draft and, therefore, no re-exposure is necessary.

The final standard will be effective for reports dated on or after April 1, 2016 and will be reflected in a June 2014 Handbook update.

AASB Decision Summary – January 20-21, 2014
The AASB reviewed comments received from Canadian stakeholders on the AASB’s Exposure Draft of proposed Canadian Standard on Related Services (CSRS) 4460, Reports on Supplementary Matters Arising from an Audit or a Review Engagement. The AASB plans to discuss revisions to the Exposure Draft at its March 2014 meeting, with a goal of approving the final standard.

Roundtable Discussions – Stakeholders’ Views Sought on Three Exposure Drafts
August 22, 2013. Register to attend a roundtable discussion in September and October 2013 to share your views. The various proposals may result in changes to work effort, the form of reporting or both, and will affect a wide range of users.

Exposure Draft – Reports on Supplementary Matters Arising from an Audit or a Review Engagement
August 8, 2013. The AASB has issued an Exposure Draft of a proposed new standard that addresses reporting on supplementary matters to a third party. Stakeholders are encouraged to submit their comments, on the form provided, by November 29, 2013.

Webinar – Reports on Supplementary Matters
August 2, 2013. Attend this webinar to provide input to the AASB on the recently issued Exposure Draft of proposed Canadian Standard on Related Services (CSRS) 4460, Reports on Supplementary Matters Arising from an Audit or a Review Engagement.

AASB Decision Summary – June 17-18, 2013
The AASB unanimously approved an exposure draft of a proposed Canadian Standard on Related Services (CSRS) 4460, Reports on Supplementary Matters Arising from an Audit or a Review Engagement. The proposed new standard would provide guidance to public accountants when engaged to report to a third party on various types of information arising from an audit or a review engagement. The exposure draft is expected to be issued in August 2013.

AASB Decision Summary – April 8-9, 2013
The AASB discussed issues related to a proposed new standard that would provide guidance to public accountants when engaged to report to a third party on various types of information arising from an audit or a review engagement. Such engagements are not audit or review engagements and are not addressed by other standards in the Handbook. The AASB discussed:

  • establishing preconditions for accepting the engagement;
  • the proposed effective date of the standard; and
  • the wording of the draft example report, including disclosing the limitations of the report.

The AASB expects to approve an exposure draft of this new standard at its June 2013 meeting.

AASB Decision Summary – February 4-5, 2013
The AASB discussed issues and reviewed a draft new standard that would provide guidance to public accountants who issue a report to a third party covering matters supplementary to those covered by the public accountant’s report resulting from an audit or a review engagement. The AASB also discussed the status of three Assurance and Related Services Guidelines that would be affected by this proposed new standard (i.e., AuG-4, Services on Matters Relating to Solvency, AuG-13, Special Reports on Regulated Financial Institutions, and AuG-17, Transactions or Conditions Reportable Under the "Well-Being Reporting Requirement" in Federal Financial Institutions Legislation). Recommendations for retention, revision or withdrawal, as appropriate, of each of these Guidelines will be addressed in the exposure draft of the proposed new standard. The AASB is expected to approve its exposure draft at its April 2013 meeting.

AASB Decision Summary – December 3-4, 2012
The AASB discussed issues related to developing a new standard that will provide guidance to public accountants who issue a report to a third party covering matters supplementary to those covered by the public accountant’s report resulting from an assurance engagement.  These reports are valued but are often misunderstood by third parties.  The  AASB discussed how the form and content of a supplementary report might be designed to better communicate that a third party may take some level of comfort from matters contained in the report but that the public accountant has not separately audited or reviewed those matters.  The AASB will further discuss issues and a draft standard at its upcoming meetings in February and April 2013. An exposure draft is expected to be issued in the spring of 2013.

AASB Decision Summary – September 10-11, 2012
The AASB discussed comments received from stakeholders during consultations held by the task force for this project in the summer of 2012.  The AASB will discuss an outline of a proposed standard and significant issues related to this project at its meeting in December 2012, with the aim of approving an exposure draft of the standard in spring of 2013.

AASB Decision Summary – January 16-17, 2012
The AASB discussed issues related to the development of a new Related Services Standard dealing with circumstances when:

  • the public accountant provides audits or reviews of the financial statements of an entity;
  • the public accountant is asked, or is required by law or regulation, to report to a third party matters that have come to the public accountant’s attention in performing the assurance engagement;
  • the public accountant has not been engaged to, and is not  providing, assurance on such matters; and
  • reporting on these matters is not covered by other standards or guidance in the Handbook.  

The next stage of this project will involve consultations with key stakeholders.

AASB Decision Summary – November 28-29, 2011
The AASB discussed issues related to the development of a new Related Services Standard dealing with circumstances when a public accountant who is providing an assurance service is asked to report to a third party matters that have come to the public accountant’s attention in performing the engagement, but on which the public accountant is providing no assurance. The next stage of this project will involve consultations with key stakeholders.

AASB Decision Summary – June 13-14, 2011
The AASB discussed issues related to the development of a new Related Services Standard on communicating information to a third party regarding matters of interest identified during a financial statement audit.  The AASB agreed to expand the scope of the project. It previously encompassed reporting by the auditor to external users of matters of interest to those parties that came to the auditor’s attention during the financial statement audit (defined as “derivative reports” in Assurance and Related Services Guideline AuG-13, Special Reports on Regulated Financial Institutions).  The project will now include reporting to external parties of relevant matters of which the auditor is aware as a result of his or her role as financial statement auditor.  These may include matters beyond those encountered during the audit.  None of these reports will involve the auditor providing assurance to any party.

AASB Decision Summary – August 18, 2010
The AASB discussed and approved a project proposal to develop a new Related Services Standard dealing with how auditors can properly respond to requests to communicate matters of interest to an entity’s stakeholders regarding matters that have come to the auditor’s attention during a financial statement audit. There is an increasing demand by regulators and others for these types of communications. The AASB concluded that guidance is needed to help ensure that the nature and limitations of such communications is made clear to users.

 

Disclaimer: This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.