Auditing and Assurance Standards Oversight Council
Minutes of Meeting
February 5, 2018
The Auditing and Assurance Standards Oversight Council (AASOC) discussed the activities of the Auditing and Assurance Board (AASB) and reviewed a draft response to the Monitoring Group’s Consultation Paper.
Brian Hunt, (non-voting)
Ron Salole, CPA Canada Nominee on the International Auditing and Assurance Standards Board
Michael Tambosso, Independence Task Force Chair
|Guests:||Ken Charbonneau, AASB Chair Designate
Stephenie Fox, Vice-President, Standards
Darrell Jensen, AASB Chair
Jeremy Justin, Canadian Public Accountability Board
Eric Turner, Director, Auditing and Assurance Standards
Bruce Winter welcomed everyone to the meeting and thanked them for attending this special meeting. Kevin Nye, a member as of April 1, 2018, is attending the meeting as an observer.
Donna Bovolaneas reported on the activities of the Nominating and Governance Committee since the last AASOC meeting. The Committee interviewed three candidates to fill the final vacancy on the AASB. These candidates were identified after a public call for nominations in the fall of 2017, and extensive outreach by AASOC members. After a detailed discussion of the candidates’ attributes, as outlined in the Committee’s materials, all voting Council members present at the meeting unanimously approved the appointment of Gary Baker to the Board for a three-year term from April 1, 2018 to March 31, 2021.
Karen Stothers noted that diversity is not an element on the candidate skills matrix and asked if this should be added. Mr. Winter suggested this be looked at as part of the recruitment-process review.
Three AASOC members have terms ending on March 31, 2018. They are completing their second terms and cannot be renewed. Kevin Nye was appointed to fill one of the positions at the last Council meeting. To date, one other candidate has been identified and interviewed. Ms. Bovolaneas excused herself from the discussion due to a conflict of interest. Mr. Winter moderated the discussion and introduced the candidate as outlined in the Committee materials. Mr. Winter noted that the candidate’s significant experience as a partner at a small firm makes him a great candidate for the Council. All AASOC voting members present at the meeting unanimously approved the appointment of Neil Sinclair to the Council for a three-year term from April 1, 2018 to March 31, 2021.
The Committee is still searching for a candidate with a background in securities law to fill the vacancy left by Shannon Gangl.
Ms. Bovolaneas also informed the Council that the Committee is reviewing the recruitment and selection process for AASB and AASOC candidates. An update of this review will be provided at the April 2018 meeting.
AASB Chair Darrell Jensen presented a draft of the Board’s 2018-2019 annual plan. The plan details the Board’s priorities and how it will operationalize the 2016-2021 Strategic Plan. The annual plan was reviewed with the Performance Review Committee on two occasions and its input has been incorporated. Committee Chair Bruce West stated that the Committee is satisfied with the process the Board followed in developing the plan and that public considerations have been addressed. An AASOC member asked if any significant activities were added in light of a part-time Chair now joining the AASB. Mr. Jensen noted that the plan has increased outreach activities in 2018-2019. However, there have not been significant increases in any other areas. The Board recognizes that Ken Charbonneau, who starts his term April 1, 2018, will need time to formulate his own plans. The Board expects a related increase in activities in 2019-2020.
An AASOC member asked how the AASB coordinates activities with CPA Canada’s Research, Guidance and Support Group. Mr. Jensen replied that the Board works closely with the Group as it develops implementation guidance. There have been increasing demands on the Board as key standards are revised and implemented.
Mr. Jensen stated that after incorporating AASOC’s feedback, the AASB expects to approve the annual plan in March 2018.
Mr. West informed AASOC that the Performance Review Committee is developing its terms of reference. It is currently working with a draft mandate to guide its activities.
AASOC considered the AASB’s decisions relating to the approval of the following new standards:
- Canadian Standard on Assurance Engagements (CSAE) 3530, Attestation Engagements to Report on Compliance; and
- CSAE 3531, Direct Engagements to Report on Compliance.
These standards were developed in response to the introduction of CSAE 3000, Attestation Engagements Other than Audits or Reviews of Historical Financial Information, and CSAE 3001, Direct Engagements. The new standards replace Section 5800, Special Reports — Introduction, Section 5815, Special Reports — Audit Reports on Compliance with Agreements, Statutes and Regulations, and Section 8600, Reviews of Compliance with Agreements and Regulations.
Mr. Jensen noted that as a result of these new standards, the AASB has identified some limited revisions to Assurance and Related Services Guideline (AuG)-18, Criteria for Reports Issued under Subsection 295(5) of "an Act Respecting Trust Companies and Savings Companies" in Québec. The Board is still reviewing these revisions. Final revisions will be brought to AASOC at a future meeting.
Following this discussion, voting AASOC members present at the meeting unanimously confirmed that the AASB had followed due process with proper regard for the public interest when approving these standards.
Bruce Winter shared a draft of AASOC’s response letter to the Monitoring Group’s Consultation Paper, “Strengthening the Governance and Oversight of the International Audit-Related Standard-Setting Boards in the Public Interest.” The Council deliberated views expressed on many of the questions in the Consultation Paper. There was particular discussion of:
- whether the composition of the Public Interest Oversight Board (PIOB) should be based on a multi-stakeholder or skills-matrix approach;
- the extent to which nominations for the international standard-setting boards should be separate from the International Federation of Accountants; and,
- whether the PIOB should retain a pubic interest override in the process of approving new standards.
An AASOC member recommended that the response letter be reviewed to ensure the language used is neutral. Mr. Winter confirmed that a final review will be performed. He thanked the Council for their input and the significant time members dedicated to this activity. A copy of the final response letter will be circulated to AASOC members for a fatal-flaw review and the response will be submitted by the February 9, 2018 due date.
The next AASOC meeting will be held on April 5, 2018, in Toronto.
There being no further matters to discuss, the meeting was terminated.