Responsibilities Relating to Other Information

Current Status Next Steps

Final Handbook material approved.

June 2017 – Final Handbook material issued.

OBJECTIVE AND SCOPE OF THIS PROJECT

International Standard on Auditing (ISA) 720, The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements, is being revised by the International Auditing and Assurance Board (IAASB) to ensure that it continues to be capable of enhancing the credibility of financial statements.

(Read more)

Revised ISA 720 will specify appropriate responsibilities of the auditor relating to the range of other information in documents containing audited financial information. Revisions will also be made to take into account how such information is disseminated.

The AASB is committed to adopting the ISAs.  Accordingly, revisions that the IAASB makes to ISA 720 will be reflected in Canadian Auditing Standard (CAS) 720.  Amendments, if any, that the AASB would make to the ISA wording would be in accordance with the AASB’s criteria for such amendments, as set out in Appendix 1 of the Preface to the CPA Canada Handbook – Assurance.

(Hide)


PROJECT NEWS & DECISION SUMMARIES

AASB Decision Summary – June 12-13, 2017
The Board discussed the implications for Canadian auditor reporting standards of the recently approved U.S. Public Company Accounting Oversight Board (PCAOB) standard dealing with auditor reporting. The Board discussed similarities and differences between the PCAOB standard and Canadian standards including the applicability of “key audit matter” reporting and the implications for auditor’s reports on the financial statements of dual-listed entities. The Board plans to discuss this topic further at its next meeting.

Basis for Conclusions – CAS 720, The Auditor’s Responsibilities Relating to Other Information
June 14, 2017. This document summarizes the process followed in developing this standard and the conclusions reached by the AASB.

Message from the Chair – New Auditor Reporting and Other Standards Issued
May 17, 2017. The new auditor’s report represents a step change. It better describes what an audit is and what an auditor does. Read this message from the AASB Chair, Darrell Jensen, to learn what factors the AASB considered when approving these new standards, as well as how we’re supporting effective implementation.

AASB Decision Summary – April 11, 2017
The Board unanimously approved new and revised CASs relating to auditor reporting, and the auditor’s responsibilities relating to other information. The Board also unanimously approved related conforming amendments to other standards, and amendments to address disclosures in the audit of financial statements. The Board concluded that changes made in finalizing the standards were significantly different from the proposals in the Exposure Drafts and Invitations to Comment. The significant differences from the proposals are:

  • deferring the effective date for application by one year; and
  • amending the scope of reporting of key audit matters so that such matters are communicated in the auditor’s report only when required by law or regulation or the auditor decides to do so.  

Since these changes were made in response to feedback received, the Board unanimously decided not to re-expose the CASs.  The new and revised standards will be effective for audits of financial statements for periods ending on or after December 15, 2018 and are expected to be included in a Handbook update in mid-2017.

AASB Decision Summary – November 28-29, 2016
The AASB discussed draft basis for conclusion documents related to the adoption of auditor reporting standards in Canada.

The AASB also discussed risks associated with effective implementation of these standards and key messages to communicate with stakeholders.

Alert – International Standards on Auditing Not Adopted as Canadian Auditing Standards as at December 15, 2016
December 5, 2016.  Auditors performing audits of financial statements in accordance with CASs for periods ending on or after December 15, 2016 should not represent compliance with ISAs unless they have also complied with these ISAs issued by the IAASB.

Message from the Chair – Moving Forward on New Auditor Reporting and Other Standards
November 14, 2016. Our Chair, Darrell Jensen, provides an update on the progress towards adopting new international standards.

AASB Decision Summary – October 17-18, 2016
The AASB discussed issues related to the adoption of auditor reporting standards in Canada. The AASB considered the appropriate timing for approval of the standards in relation to the expected timing for the finalization of the U.S. Public Company Accounting Oversight Board’s auditor reporting proposals.  The AASB also discussed different options for the application of the new standards for entities listed with exchanges other than the Toronto Stock Exchange. 

The AASB reviewed a draft message from the Chair to update stakeholders on the progress of the project. This message is expected to be released in late 2016.

The AASB also discussed a proposed joint project with the Australian Auditing and Assurance Standards Board to conduct a review of the Australian experience in implementing new auditor reporting standards in the first year, with a particular focus on smaller listed entities.

AASB Decision Summary – September 12-13, 2016
The AASB discussed issues related to the adoption of ISAs on auditor reporting, as well as views raised by AASOC members at its July 2016 meeting, including:

  • the scoping, and effective dates for the implementation of key audit matters reporting;
  • whether early application should be allowed and, if so, the implications;
  • how to support successful implementation of the standards;
  • timelines for issuance of the standards and related materials to support their implementation; and
  • key messages to highlight in a message from the Chair.

The AASB will continue to discuss these and other issues at its October 2016 meeting. The AASB Chair intends to issue a message to update stakeholders with more details on the progress of this project in late 2016.

AASB Decision Summary – June 27, 2016
The AASB discussed different approaches for reflecting the new auditor reporting standards in the Handbook, including during the transition period prior to their effective date.  The AASB deliberated whether to allow earlier application of the standards in Canada and possible application dates. The AASB plans to issue a Message from the Chair to update stakeholders on the key decisions reached and expects to approve the final standards at its next meeting in September 2016.

AASB Decision Summary – June 13-14, 2016
The AASB discussed issues related to the adoption of ISAs regarding auditor reporting including:

  • the impact of the U.S. PCAOB’s auditor reporting reproposal;
  • the scope of requirements dealing with reporting of key audit matters;
  • what effective date should be established for the new standards including whether there should be a staged implementation of reporting on key audit matters; and
  • whether to permit early application of the CASs.

The AASB agreed to issue at an appropriate time a Message from the Chair designed to update stakeholders on the project.

The AASB will continue discussion of the project issues at its June 2016 conference call.

AASB Decision Summary – May 5, 2016
The AASB discussed issues regarding the adoption of ISAs relating to auditor reporting, financial statement disclosures, and ISA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information. The AASB will continue its discussions at its June 2016 meeting.

AASB Decision Summary – March 7- 8, 2016
The AASB discussed and reached preliminary conclusions on comments received from Canadian stakeholders on the AASB’s Exposure Draft, “The Auditor’s Responsibilities Relating to Other Information: Canadian Amendments.” The AASB decided that further analysis is needed, which will be discussed in conjunction with the auditor reporting project at the next meeting.

Webinar – Canadian Amendments to ISA 720, The Auditor’s Responsibilities Relating to Other Information
December 3, 2015. Tune in to this webinar on January 12, 2016 (English) and February 2, 2016 (French) to learn about AASB’s recently issued Exposure Draft on Canadian amendments to ISA 720.

AASB Exposure Draft – The Auditor’s Responsibilities Relating to Other Information: Canadian Amendments
November 24, 2015. The AASB has issued an Exposure Draft of proposed Canadian amendments to ISA 720. Stakeholders are encouraged to submit their comments, on the form provided, by February 12, 2016.

Message from the Chair – Extension of the Comment Deadline for the Auditor Reporting Invitation to Comment
November 5, 2015. The AASB’s Chair, Cathy MacGregor, explains why the AASB has extended the comment deadline for the Invitation to Comment, “Implementation Considerations for New Auditor Reporting Standards.” The new comment deadline is February 5, 2016.

AASB Decision Summary – October 14, 2015
The AASB approved an exposure draft of proposed Canadian amendments to ISA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information, in adopting it as CAS 720. The exposure draft is expected to be issued in November 2015 and will have a response date of February 5, 2016.

Roundtable Discussions – Stakeholders’ Views Sought on Auditor Reporting, Responsibilities Relating to Other Information, Compliance Reporting and the AASB’s Draft Strategic Plan for 2016-2021
October 6, 2015. Register to attend a roundtable discussion this fall to share your views on the AASB’s draft strategic plan and other AASB projects. The topics affect a wide range of stakeholders.

AASB Decision Summary – September 16-18, 2015 
The AASB discussed issues related to the adoption of ISA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information, as CAS 720 in Canada, including whether:

  • a Canadian amendment should be made to limit the requirement for the auditor’s report on a listed entity’s financial statements to identify other information expected to be obtained after the date of the auditor’s report to other information required by Canadian securities legislation; and
  • the requirement for the auditor’s report to identify other information of a listed entity expected to be obtained after the date of the auditor’s report should apply to all reporting issuers in Canada (i.e., listed entities and investment funds).

The AASB will continue to discuss these issues with a goal of approving an exposure draft at its October 2015 meeting.

AASB Decision Summary – July 7, 2015
The AASB discussed issues related to the adoption of ISA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information, as CAS 720. Possible Canadian amendments discussed related to:

  • the definition of what constitutes the annual report in a Canadian context; and
  • the reporting requirements dealing with other information received after the date the financial statements are issued.

The AASB did not conclude on the Canadian amendments and did not approve an exposure draft. The AASB will continue to discuss these issues with a goal of approving an exposure draft during the late summer or early fall of 2015.

AASB Decision Summary – June 8-9, 2015
The AASB discussed issues related to the adoption of ISA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information, as CAS 720 in Canada, including:

  • determining what constitutes the annual report for a listed entity and whether and how that should be reflected in Canadian amendments; and
  • the implications for the auditor’s consent to the use of the auditor’s report when the auditor’s report makes reference to an annual report that is not required to be included in securities regulatory filings.

The AASB will continue to discuss these issues at its July 2015 meeting.

Final Standard – The Auditor’s Responsibilities Relating to Other Information
April 17, 2015 – The IAASB has issued ISA 720 (Revised), which addresses the auditor’s involvement with financial and non-financial information, other than the audited financial statements, included in entities’ annual reports. The revised ISA is effective for audits of financial statements for periods ending on or after December 15, 2016.

Message from the Chair – Adoption of Auditor Reporting and Other Standards
April 15, 2015. The AASB’s Chair, Cathy MacGregor, explains why the AASB plans to issue an invitation to comment and an exposure draft addressing specific proposed Canadian amendments to the international standards.

AASB Decision Summary – April 14, 2015
The AASB discussed issues related to the adoption of ISA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information, as CAS 720, including possible limited amendments to ISA wording to deal with circumstances particular to Canada. The AASB will continue to discuss issues and review an exposure draft of proposed CAS 720 at its June 2015 meeting, with a goal of issuing it in the late summer of 2015.

AASB Decision Summary – March 9-10, 2015
The AASB discussed issues related to the adoption of ISA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information, as CAS 720 in Canada. This included discussion of what Canadian amendments, if any, should be made to the requirement for the auditor’s report on financial statements of a listed entity to identify other information expected to be obtained after the date of the auditor’s report. The AASB tentatively agreed that Canadian amendments should be proposed to limit the application of this requirement to documents required by Canadian securities legislation to be filed concurrently with the financial statements. The AASB also agreed to propose other Canadian amendments to provide further guidance on which documents particular to Canada are within the scope of CAS 720, and to address relevant ethical requirements in Canada.

The AASB decided that these proposed Canadian amendments are a significant change from those identified in the Re-exposure Draft of proposed ISA 720 issued in May 2014 and, therefore, should be exposed for public comment. An exposure draft of proposed CAS 720 is expected to be approved at the AASB’s April 2015 meeting and issued in the summer of 2015.

AASB Decision Summary – January 19-20, 2015
The AASB discussed issues related to the adoption of ISA 720 (Revised), The Auditor’s Responsibilities Related to Other Information, which the IAASB approved at its December 2014 meeting. Topics discussed included:

  • removing the requirement for the auditor’s report to identify other information of a listed entity that is expected to be obtained after the date of the auditor’s report and whether any amendments to requirements related to work effort are necessary;
  • whether there are any matters particular to Canadian public sector and publicly accountable entities (i.e., entities other than listed entities) that necessitate Canadian amendments similar to the possible amendment set out above; and
  • the way forward in Canada, in particular whether Canadian amendments would need to be re-exposed and, if not, what the effective date of revised CAS 720 should be.

The AASB will continue to discuss issues related to this project at its March 2015 meeting.

AASB Decision Summary – November 24-25, 2014
The AASB provided input to the CPA Canada nominee and another Canadian member on the IAASB on issues related to the IAASB’s project to revise ISA 720, The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements, including:

  • the expected work effort of the auditor;
  • the auditor’s responsibilities relating to other information obtained after the date of the auditor’s report and related reporting requirements;
  • proposed revisions to the definitions of other information and annual report;
  • documentation requirements;
  • the proposed effective date of the revised standard; and
  • whether re-exposure of ISA 720 (Revised) is required.

The AASB also discussed issues related to the adoption of ISA 720 (Revised) as CAS 720 in Canada, including:

  • whether Canadian amendments should be made to clarify which documents would be outside the scope of CAS 720;
  • the auditor’s responsibilities relating to other information if the auditor has performed an engagement on the other information under CSRS 4460, Reports on Supplementary Matters Arising from an Audit or a Review Engagement;
  • whether the auditor should have any responsibility to perform procedures on an entity’s annual report if the auditor has already performed procedures on the entity’s Management Discussion and Analysis report filed with regulators; and
  • whether the auditor should be required to not date the auditor’s report until the auditor has read the entity’s Management Discussion and Analysis report.

AASB Decision Summary – September 8-9, 2014
The AASB provided input to the CPA Canada nominee and another Canadian member on the IAASB on issues related to the IAASB’s project to revise ISA 720, The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements, including:

  • the requirements related to the auditor’s work effort to remain alert for indications that the other information is materially misstated;
  • the definition of a misstatement of the other information (in particular, the way the concept of materiality is addressed in this context); and
  • the IAASB’s proposal, consistent with extant ISA 720, to require the auditor to continue to read and consider other information obtained after the date of the auditor’s report, but to neither identify such other information nor provide a description of the actions the auditor is required to take with respect to such other information.

AASB Response – ISA 720, The Auditor’s Responsibilities Relating to Other Information
July 28, 2014. The AASB has submitted a comment letter responding to the IAASB’s Exposure Draft.

AASB Decision Summary – July 14, 2014
The AASB discussed comments received on the AASB’s Re-exposure Draft of CAS 720, The Auditor’s Responsibilities Relating to Other Information, and input received from Canadian stakeholders as a result of consultations held. The AASB also discussed a draft response letter to the IAASB’s Exposure Draft re-exposing proposed revisions to ISA 720. A final draft of the response will be reviewed by the AASB Chair and Vice Chair prior to submission.

Roundtable Discussion – Stakeholders’ Views Needed on the IAASB’s Revised Proposals Regarding the Auditor’s Responsibilities Relating to Other Information
May 26, 2014. Register to attend a roundtable discussion in June 2014 to share your views on potentially significant changes to the scope and auditor’s responsibilities under proposed ISA 720 (Revised).

AASB Re-exposure Draft – The Auditor’s Responsibilities Relating to Other Information
May 23, 2014. The AASB has issued a Re-exposure Draft that proposes to adopt, with appropriate amendments, ISA 720 (Revised) issued by the IAASB. Canadian stakeholders are encouraged to submit their comments, on the form provided, by July 4, 2014.

AASB Decision Summary – April 22, 2014
The IAASB issued an Exposure Draft re-exposing proposed revisions to ISA 720 (revised), The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements.

The AASB unanimously approved a re-exposure draft that proposes Canadian amendments to the IAASB Exposure Draft. The AASB’s re-exposure draft is expected to be issued in May 2014.

IAASB Exposure Draft – The Auditor’s Responsibilities Relating to Other Information
April 24, 2014. The IAASB has issued an Exposure Draft re-exposing proposed revisions to ISA 720, The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements. Canadian stakeholders are encouraged to provide their comments to the IAASB by July 18, 2014.

AASB Decision Summary – March 10-11, 2014
The AASB provided input to the CPA Canada nominee and another Canadian member on the IAASB on key issues related to the IAASB’s project to revise ISA 720, The Auditor’s Responsibilities Relating to Other Information, including:

  • whether revisions to the proposed objectives and work effort appropriately address concerns raised by stakeholders; and
  • whether the auditor’s responsibilities should be extended beyond the date of the auditor’s report.

The IAASB will continue to discuss issues on this topic. The IAASB is expected to issue a re-exposure draft of ISA 720 in April 2014. The AASB will issue its re-exposure draft of CAS 720 shortly thereafter.

AASB Decision Summary – December 2-3, 2013
The AASB discussed key issues related to the IAASB’s project to revise ISA 720, The Auditor’s Responsibilities Relating to Other Information, including:

  • the proposed objective and work effort of the auditor;
  • the scope of other documents covered, the definition of annual report and whether to scope in regulatory reports;
  • the wording of the proposed illustrative report, including whether the auditor should only report by exception; and
  • whether the AASB should suggest that the IAASB consider a phased-in approach to the application of revised ISA 720.

The IAASB will continue to discuss issues on this topic. The IAASB is expected to finalize revised ISA 720 in 2014.

AASB Decision Summary – September 9-10, 2013
The AASB discussed key issues related to the IAASB’s project to revise ISA 720, The Auditor’s Responsibilities Relating to Other Information in Documents Containing or Accompanying Audited Financial Statements and the Auditor’s Report Thereon, including:

  • the proposed expansion of the auditor’s responsibilities beyond that necessary for the audit of the financial statements; and
  • definitions of “other information” and “annual report”, which scope in information made available to the auditor after the date of the auditor’s report.

The IAASB will continue its discussion of this topic, with a goal of approving a final standard in 2014.

AASB Decision Summary – June 17-18, 2013
The AASB discussed key issues related to the IAASB’s project to revise ISA 720, The Auditor’s Responsibilities Relating to Other Information in Documents Containing or Accompanying Audited Financial Statements and the Auditor’s Report Thereon, including:

  • the scope of documents covered by proposed ISA 720;
  • possible expansion of the work effort beyond reading the other information; and
  • treatment of securities offering documents.

The AASB will continue to discuss these issues at its September 2013 meeting.

AASB Decision Summary – February 26, 2013
The AASB reviewed comments received on its Exposure Draft of revisions to CAS 720, The Auditor’s Responsibilities Relating to Other Information in Documents Containing or Accompanying Audited Financial Statements and the Auditor’s Report Thereon, and input received from Canadian stakeholders as a result of consultations held. The AASB also discussed a draft response letter to the IAASB’s Exposure Draft of revisions to ISA 720.

Roundtable Discussion – Stakeholders’ Views Needed on the IAASB’s Proposals on ISA 720
January 11, 2013. Are you a board member, management, or auditor that issues documents that contain or accompany audited financial statements? Register to attend a roundtable discussion in Calgary, Halifax, Montreal, Toronto or Vancouver to share your views on potentially significant changes to the scope and auditor’s responsibilities under proposed ISA 720 (Revised).

Exposure Draft – The Auditor’s Responsibilities Relating to Other Information in Documents Containing or Accompanying Audited Financial Statements and the Auditor’s Report Thereon
December 20, 2012. The AASB has issued an Exposure Draft that proposes to adopt, with appropriate amendments, ISA 720 (Revised) issued by the IAASB. Canadian stakeholders are encouraged to submit their comments by February 8, 2013.

AASB Decision Summary – December 3-4, 2012
The IAASB issued an Exposure Draft of revisions to ISA 720, The Auditor’s Responsibilities Relating to Other Information in Documents Containing or Accompanying Audited Financial Statements and the Auditor’s Report Thereon, in November 2012. The AASB unanimously approved an exposure draft of revisions to CAS 720. The exposure draft notes that the AASB is proposing Canadian amendments to the IAASB Exposure Draft of ISA 720. The exposure draft is expected to be issued mid-December 2012 and will have a comment deadline of February 8, 2013.

AASB Decision Summary – October 16, 2012
The AASB decided to defer its discussion related to approving its exposure draft of changes to CAS 720, The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statement. The IAASB approved its exposure draft of revisions to ISA 720 at its September 2012 meeting. However, the IAASB’s exposure draft, including its accompanying explanatory memorandum, is now not expected to be available until early November 2012.  The AASB will schedule a conference call for mid-November with the aim to approve its exposure draft of CAS 720.

AASB Decision Summary – September 12-14, 2011
The AASB discussed matters related to the IAASB’s proposed exposure draft of revisions to ISA 720, The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements.

AASB Decision Summary – March 7-8, 2011
The AASB discussed matters related to the IAASB’s proposed exposure draft of revised ISA 720, The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements.

AASB Decision Summary – August 18, 2010
The AASB discussed an issue related to CAS 720, The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements. It was noted that a document containing audited financial statements could be issued long after the date of the auditor’s report. CAS 720 is not explicit in stating that the documents that fall within its scope would need to be prepared within the same timeframe as the financial statements and with the intention of being made available to the auditor prior to the date of the auditor’s report. The AASB noted that the IAASB is now in the process of revising ISA 720 and this matter will be addressed. Any revisions will be reflected in CAS 720. The AASB also noted that paragraph 10 of CAS 560, Subsequent Events, is clear in stating that the auditor has no obligation to perform any audit procedures regarding the financial statements after the date of the auditor’s report.

 

Disclaimer: This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.