Auditor's Consent to the Use of the Auditor's Report Included in a Business Acquisition Report

OBJECTIVE AND SCOPE OF THIS PROJECT

The AASB has approved a project proposal to revise the 7000 series of Sections in the Handbook (i.e., Sections dealing with securities regulations and other capital markets matters).

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The following matters will be considered:

  • positions previously taken by the AASB on matters that have a public interest impact;
  • projects undertaken by the International Auditing and Assurance Standards Board (IAASB); and
  • recent changes in Canadian securities regulations.

This project involves revising Section 7500, Auditor's Consent to the Use of the Auditor's Report in Connection with Designated Documents.

Key issues that this project proposes to address include the following:

  • Is deeming the auditor to be associated with the Annual Information Form filed with securities regulators appropriate?
  • What is the impact, if any, of the IAASB’s revision of International Standard on Auditing (ISA) 720, The Auditor's Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements, which the AASB has adopted in Canada as Canadian Auditing Standard (CAS) 720 with the same title, on Section 7500?

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PROJECT NEWS

Message from the Chair – Change to the Effective Date of Section 7170
August 26, 2016. Our Chair, Darrell Jensen, explains a change to the effective date of Section 7170, Auditor’s Consent to the Use of the Auditor’s Report in a Business Acquisition Report.

Basis for Conclusions – Section 7170, Auditor’s Consent to the Use of the Auditor’s Report Included in a Business Acquisition Report
July 2, 2015. 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 9-10, 2015
The AASB unanimously approved Section 7170, Auditor’s Consent to the Use of the Auditor’s Report in Connection with Business Acquisition Reports. Section 7170 will replace Section 7500, Auditor’s Consent to the Use of the Auditor’s Report in Connection with Designated Documents.

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 an auditor’s consent to the use of an auditor’s report in a business acquisition report issued on or after June 1, 2016 and is expected to be issued in June 2015.

Exposure Draft – Auditor’s Consent to the Use of the Auditor’s Report Included in a Business Acquisition Report
October 23, 2014. The AASB has issued an Exposure Draft of a proposed new standard that would replace existing Section 7500, Auditor’s Consent to the Use of the Auditor’s Report in Connection with Designated Documents. Stakeholders are encouraged to submit their comments, on the form provided, by January 30, 2015.

AASB Decision Summary – September 8-9, 2014
The AASB unanimously approved an exposure draft of proposed Section 7170, Auditor’s Consent to the Use of the Auditor’s Report Included in a Business Acquisition Report. Section 7170 would replace Section 7500, Auditor’s Consent to the Use of the Auditor’s Report in Connection with Designated Documents. The exposure draft is expected to be issued in late October 2014.

AASB Decision Summary – June 9-10, 2014
The AASB discussed issues related to revising and clarifying Section 7500, Auditor’s Consent to the Use of the Auditor’s Report in Connection with Designated Documents, including, with respect to the auditor of the acquired entity:

  • the procedures that would be performed on interim financial statements included in a business acquisition report;
  • obtaining management representations related to the period between the date of the auditor’s report on the most recent audited financial statements of the acquired business included in the business acquisition report and the date of the auditor’s consent;
  • the auditor’s responsibilities when the auditor becomes aware of a material inconsistency between other information in the business acquisition report and the financial statements of the acquired business that may have an impact on the financial statements and the auditor’s report;
  • the auditor’s responsibilities with regard to the accurate reproduction of audited financial statements, and interim financial statements of the acquired business if the auditor has previously reported on them, in the business acquisition report; and
  • the form and content of the proposed auditor’s consent.

The AASB plans to discuss a draft exposure draft at its September 2014 meeting, with a goal of approving an exposure draft in 2014.

AASB Decision Summary – January 20-21, 2014
The AASB discussed issues related to revising and clarifying Section 7500, Auditor’s Consent to the Use of the Auditor’s Report in Connection with Designated Documents, including:

  • narrowing the scope to deal with business acquisition reports, as other designated documents would be covered by revised standards on association;
  • obtaining management representations relating to intervening period events;
  • the procedures that would be performed on interim financial statements included in a business acquisition report; and
  • the content of the proposed auditor’s consent.

The AASB plans to discuss a draft exposure draft at its June 2014 meeting, with a goal of issuing an exposure draft in 2014.

AASB Decision Summary – January 17-18, 2011
The AASB approved a project proposal to revise the 7000 series of Sections in the CICA Handbook – Assurance (i.e., Sections dealing with securities regulations and other capital markets matters).

 

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.