Auditing and Assurance Standards Board
July 19, 2017
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 Board reviewed comments received from Canadian stakeholders on the AASB’s Exposure Draft of proposed revisions to CAS 540, Auditing Accounting Estimates and Related Disclosures. Issues raised by respondents and discussed by the Board included:
- scalability of the standard for application to estimates of all sizes and complexities;
- linkage of requirements in CAS 540 to CAS 315, Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment;
- effect of the proposed risk factors on inherent risk assessment for accounting estimates; and
- challenges identified during field testing of the proposed standard.
The Board also discussed its draft response letter to the IAASB’s Exposure Draft with the same title. A final draft of the response will be reviewed by the Board prior to submission in early August.
The Board received a progress update on its strategic project related to Post-implementation Reviews (PIR). The Board will use a joint PIR conducted with other jurisdictions on Auditor Reporting as a learning experience on conducting PIR. The Board directed staff to provide an update at the October meeting on approaches to selecting and performing PIR.