Auditing and Assurance Standards Board
January 18-19, 2016
This summary of decisions of the Auditing and Assurance Standards Board (AASB) has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on projects and other matters, which might change after further deliberations by the AASB. Decisions to publish exposure draft and Handbook material are final only after a formal voting process.
Canadian Auditing Standards (CASs)
Auditing Accounting Estimates
The AASB received a presentation on audit matters arising from IFRS 9 Financial Instruments including implications for:
- auditing significant management assumptions and estimates;
- how the auditor obtains sufficient appropriate audit evidence;
- the use of experts on the audit; and
- testing of internal controls.
These and other implications are being explored in the IAASB’s project to revise ISA 540, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures. The AASB decided that two advisory groups would be established to assist staff and the AASB by providing input on issues related to the project.
Enhancing Audit Quality
- discussed feedback received from its members during earlier conference calls on the IAASB’s Overview and Invitation to Comment, “Enhancing Audit Quality in the Public Interest: A Focus on Professional Skepticism, Quality Control and Group Audits;”
- decided which issues will require further discussion by the AASB and other stakeholders to provide staff a basis for drafting the AASB response to the IAASB’s Invitation to Comment;
- reviewed its draft invitation to comment; and
- discussed the means of obtaining Canadian stakeholder input on the issues in the IAASB’s Overview and Invitation to Comment.
Assurance and Related Services Standards (other than CASs)
The AASB unanimously approved a re-exposure draft of proposed CSOA 5000, Use of the Practitioner’s Communication or Name (formerly proposed to be titled Association). CSOA 5000 would replace Section 5020, Association. The re-exposure draft is expected to be issued in March 2016. The effective date of proposed CSOA 5000 would be for a practitioner’s consent provided on or after June 1, 2017. To ensure consistency in application, the re-exposure draft will propose to defer the effective date of Section 7170, Auditor’s Consent to the Use of the Auditor’s Report Included in a Business Acquisition Report, to reports issued on or after June 1, 2017 and, accordingly, defer withdrawal of Section 7500, Auditor’s Consent to the Use of the Auditor’s Report in Connection with Designated Documents.
The AASB discussed issues related to its project to revise Section 9200, Compilation Engagements, including:
- whether the revised standard should acknowledge the use of financial statements compiled under Section 9200 and the accompanying report by users other than management; and
- whether the revised standard should require a disclosure of the basis of accounting followed by management.
The AASB also supported expanding the composition of the Compilation Engagements Task Force to include an observer from the lending community.
Special Reports — Assurance on Compliance with Agreements, Statutes and Regulations
The AASB discussed an overview of issues raised by respondents to the Exposure Draft of CSAE 3530, Reports on Compliance with Agreements, Statutes and Regulations.
The AASB decided that a subgroup of AASB members should be formed to review the issues raised and recommend revisions to the proposed CSAE 3530 at a future AASB meeting.
AASB Operating Plan 2016-2017
The AASB discussed a draft operating plan for 2016-2017. A revised plan will be reviewed and approved at a future AASB meeting.
AASB Strategic Plan 2016-2021
The AASB had a preliminary discussion about implementation activities and timelines related to its draft Strategic Plan for 2016-2021, which is currently out for public comment. The AASB will discuss comments received and any revisions to the proposed strategic plan, as well as further implementation considerations, at a future meeting.