Auditing and Assurance Standards Board
Decision Summary
February 4-5, 2013

Canadian Auditing Standards (CASs)

Auditor Reporting

The AASB discussed issues related to the IAASB’s project on auditor reporting, specifically key issues relating to the areas of:

  • auditor commentary;
  • other improvements, including those addressing increased transparency in audit reporting; and
  • proposed revisions to ISA 700, Forming an Opinion and Reporting on Financial Statements.

An exposure draft is expected to be issued by the IAASB in the summer of 2013. The AASB will issue its own exposure draft shortly thereafter.

IAASB Strategy and Work Program

The AASB discussed issues related to the IAASB’s future strategy, including:

  • the period the IAASB’s strategy should cover; and
  • the design of the planned stakeholder survey, which forms part of the consultation process for developing the strategy.

The AASB will discuss a draft response to the IAASB’s stakeholder survey at its April 2013 meeting.

Using the Work of Internal Auditors

The AASB discussed matters regarding the IAASB’s likely approval of revisions to ISA 610, Using the Work of Internal Auditors, related to direct assistance.

In March 2012, the AASB approved changes to CAS 610 and related changes to certain paragraphs in CAS 315, Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment. Changes dealing with the auditor’s use of direct assistance by internal auditors were not made effective because related matters were still being considered by the International Ethics Standards Board for Accountants (IESBA). The matters were set out in the IESBA’s Exposure Draft, “Proposed Changes to the Definition of ‘Engagement Team’.”

At its December 2012 meeting, the IAASB discussed, but did not approve, revisions to ISA 610 related to direct assistance, as the IESBA had not yet finalized matters relating to the definition of ‘engagement team’. The IESBA has now concluded on these matters. The IAASB is expected to approve its revisions to ISA 610 at its February 2013 meeting. If the IAASB approves these revisions, the AASB will discuss whether to re-expose or approve the same revisions to CAS 610 at its February 2013 conference call.

Assurance and Related Services Standards (other than CASs)

Agreed-Upon Procedures

The AASB discussed issues related to revising and clarifying Section 9100, Reports on the Results of Applying Specified Auditing Procedures to Financial Information Other than Financial Statements. Starting in the fall of 2013, the IAASB is expected to undertake a project to revise International Standard on Related Services (ISRS) 4400, Engagements to Perform Agreed-Upon Procedures Regarding Financial Information. Section 9100 and ISRS 4400 address the same topic. Therefore, the AASB decided to monitor and provide input to the IAASB’s project and, at a future date, will decide whether it would be appropriate to adopt the international standard as a Canadian standard.


The AASB discussed issues related to revising and clarifying Section 5020, Association, including the practitioner’s:

  • association with translated documents;
  • communication when the practitioner is required to consent to the use of the practitioner’s report in circumstances not already covered by Other Canadian Standards in the CICA Handbook – Assurance; and
  • association with general purpose documents that contain other information, and potential overlap with requirements in CAS 720, The Auditor's Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements.

Over the remainder of this year, the AASB will continue to discuss issues related to association.

Other Reporting Where No Assurance Is Provided

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.

Standards for Assurance Engagements

The AASB discussed issues related to the IAASB’s development of revised ISAE 3000, Assurance Engagements Other Than Audits or Reviews of Historical Financial Information, in particular, matters related to direct engagements. The AASB also discussed how the direction IAASB takes on its project may affect the AASB’s development of revised Canadian standards for assurance engagements.

Standards for Review Engagements

The AASB discussed issues related to revising standards for review engagements in Canada, including possible amendments that could be made to the International Standard on Review Engagements (ISRE) 2400, Engagements to Review Historical Financial Statements, that will allow the AASB to adopt ISRE 2400 as a Canadian standard. The AASB is expected to approve its exposure draft at its April 2013 meeting.

AASB Planning

The AASB reviewed responses to its Invitation to Comment on the AASB’s draft Strategic Plan 2013-2016 and revisions to the draft plan made to respond to comments received. Revisions included:

  • explicitly stating that the AASB considers whether changes to international standards for audits of financial statements result in standards that are in the public interest;
  • adding, as an appendix to the plan, the amendment criteria used by the AASB when adopting international standards for use in Canada;
  • adding a brief explanation of the assessment performed by the AASB when deciding when to adopt an international standard for an engagement other than an audit of financial statements; and
  • clarifying how the AASB responds to issues from stakeholders related to implementation guidance.

The AASB unanimously approved its final Strategic Plan 2013-2016. The Plan will be available online in early March 2013.