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 unanimously approved an exposure draft of revisions to CAS 540, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures. The exposure draft is based on the IAASB’s exposure draft of proposed changes to ISA 540, and proposes no Canadian amendments. The exposure draft is expected to be issued in early May 2017, with a comment deadline of July 7, 2017.
The Board also discussed the communication and outreach plan related to the exposure draft. A webinar will be conducted, in English and French, to build awareness of the exposure draft.
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.