Auditing and Assurance Standards Board
Terms of Reference

Mission

1. The mission of the Auditing and Assurance Standards Board (AASB) shall be to assist the profession in serving the public interest by enhancing the quality of assurance services. The AASB shall support the growth and relevance of such services by continually improving and disseminating guidance and generally accepted standards for a broad range of assurance and related services. These standards and guidance shall reflect best practice and meet the needs of decision-makers and assurance providers. The AASB shall be committed to international convergence and shall work with other standard-setters towards that goal.
  

Scope

2. The AASB’s scope shall cover engagements related to all types of entities, in both the private and public sectors, including profit-oriented enterprises, not-for-profit organizations, governments and other entities in the public sector.
 

Goals

3. The AASB shall have the following long-term goals:
a. Set high-quality assurance standards that enable the profession to serve the public interest.
b. Support and participate in the development of high-quality global assurance standards.
c. Maintain a strong Canadian assurance standard-setting capability to ensure public confidence in the assurance process.
  

Responsibilities

4. The AASB shall have the following responsibilities:
a. To issue and publish auditing and assurance pronouncements on its own authority, if satisfied as to need, usefulness, and practicality, following a review of theory and practice and a process of consultation with affected parties and debate (“due process”).
b. To develop and submit to the Auditing and Assurance Standards Oversight Council (“AASOC”) an annual plan that specifies the AASB’s strategic direction, priorities and agenda, including a report on how projects were selected and priorities set.
c. To implement an effective working process for all projects and commission task forces, advisory groups, or other groups, as appropriate, to aid in the development of auditing and assurance standards, guidelines or other material.
d. To advise AASOC as to the adequacy of human and financial resources to accomplish the AASB’s objectives.
e. To recommend auditing and assurance research in Canada, particularly on issues that may be of relevance to the Canadian business environment.
f. To communicate with and seek input from stakeholders on a timely basis.
  

Accountability

5. The AASB shall issue standards and practice guidance in the interests of the public and the profession. Although it has the right to issue them on its own authority, the AASB shall remain ultimately accountable to:
a. users of assurance services, who rely on the assurance provided;
b. the profession, whose members provide assurance services; and
c. legislators and regulators who have recognized the AASB’s standards and guidance as the appropriate basis on which assurance services should be provided.
 
6. The AASB shall cooperate with AASOC to assist AASOC in the effective performance of its responsibilities.  Specifically, the AASB shall be accountable to AASOC to demonstrate that it has used the resources allocated to it effectively, efficiently and economically and that it has assessed how well it is meeting the needs of its stakeholders.
  

Composition and Term

7. Membership of the AASB shall be as follows:
Voting Members
a. A volunteer Chair with a two-year term of office.
b. A volunteer Vice-Chair with a two-year term of office who, under normal circumstances, would succeed to the Chair position
c. Eleven other volunteer members each with a normal term of office of three years, which is renewable for one term.
  
Non-Voting Members
a. The Auditing and Assurance Standards Director;
b. The Vice-President, Standards of the Chartered Professional Accountants of Canada (CPA Canada); and
c. The CPA Canada nominee on the International Auditing and Assurance Standards Board (if applicable).
 
8. The terms of the AASB’s voting members shall be arranged with staggered expiry dates so there will be an orderly rotation of membership each year.
 
9. The role of the Chair shall include:
a. Presiding over the AASB meetings and communicating with members between meetings, as necessary, concerning the AASB’s activities;
b. Serving as a non-voting member of AASOC and a non-voting member of its Nominating Committee;
c. Representing the AASB at meetings of national standard setters;
d. Representing the AASB in meetings of other parties involved or interested in the AASB’s activities;
e. Making presentations nationally and internationally on auditing and assurance matters; and
f. Delegating responsibilities to the Vice-Chair as appropriate.
 
10. The role of the Vice-Chair shall include assisting and providing advice to the Chair, presiding over AASB meetings in the absence of the Chair, and undertaking any other responsibilities delegated by the Chair.
 

Selection Process

11. Members of the AASB shall be selected to ensure that it has an appropriate balance of competencies and experiences to meet its objectives and include at least three representatives from the public sector. The Vice-President, Standards of CPA Canada, in conjunction with the Chair of the AASB and the Auditing and Assurance Standards Director of CPA Canada, shall provide recommendations regarding individuals for potential membership on the AASB, and on the appointment of the AASB Chair and Vice-Chair, to the AASOC Nominating Committee. The AASOC Nominating Committee may, but need not necessarily, adopt such recommendations. After receiving such input, the AASOC Nominating Committee shall present the proposed members of the AASB to AASOC for approval.
  

Assistance/Advice/Operations

12. The AASB shall be supported by the Auditing and Assurance Standards Director and such other staff as required.
  

Consultation and Communication

13. The AASB shall actively solicit input on proposed assurance standards or guidance by issuing draft documents inviting public comment. Outreach programs shall be used to approach practitioners, preparers of financial statements and other users of auditing and assurance standards directly for their input.
 
14. The AASB shall disseminate information about international standard-setting activities, together with invitations to the public to provide input on those activities.
 
15. The AASB shall arrange for examples and implementation guidance, if appropriate, to assist practitioners in understanding and applying complex standards consistently.
 
16. The AASB shall publish newsletters, maintain an internet website where meeting agendas and decision summaries are posted, and provide other information to assist and inform its stakeholders.
  

Decision Making

17. Each year, the AASB shall present its priorities and agenda to AASOC for comments and shall consider the views and comments of AASOC in determining its priorities and agenda. If, for any reason, the AASB does not wish to incorporate specific views and comments of AASOC into its priorities and agenda, the AASB shall advise AASOC as to its reasons and provide AASOC with an opportunity to respond.  The AASB shall convey to AASOC its preliminary agenda planning decisions, including preliminary approval of project proposals and preliminary decisions to discontinue a project, and subsequently shall consider AASOC’s views thereon before reaching final decisions.
 
18. Decisions of the AASB to release an exposure draft and approve a standard or guideline shall require a vote of two-thirds of all AASB voting members.
 
19. Each voting member shall have one vote. AASB members are expected to vote according to their own beliefs and not as representatives voting according to the views of the firm, organization or constituency with which they are associated.
  

Reporting

20. The AASB shall report annually on its activities.
 
21. The AASB shall review its membership and Terms of Reference to ensure that they continue to meet the needs of the AASB and the public, and submits the results of this review to AASOC at least once every three years.
 
22. The AASB shall submit such reports as may be required by AASOC or the CPA Canada Board of Directors.
   

Meetings

23. Meetings of the AASB shall normally be held at least five times a year.  Additional meetings and conference calls may be convened to achieve the AASB’s objectives.
 
24. Any voting member of the AASB who either:
a. Fails to attend more than two AASB meetings in succession for whatever cause; or
b. Fails to attend, in any twelve-month period, at least 50% of all meetings of the AASB
shall, in the absence of circumstances that in the opinion of the Chair are extenuating, automatically cease to be a member of the AASB at the end of the meeting at which he or she was in default. A member shall be deemed to be absent from a meeting of the AASB unless he or she is in attendance for substantially all of it.
 
25. The AASB’s “year” shall end on March 31.
  

Bilingualism

26. The AASB shall follow CPA Canada’s bilingualism policy.
  

Funding

27. The AASB’s activities shall be funded by CPA Canada.