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)
Conforming Amendments to Canadian Standards
The AASB reviewed the final revisions to Canadian standards resulting from conforming amendments to International Auditing and Assurance Standards Board (IAASB) standards, as a result of the revised International Ethics Standards Board for Accountants Code. The Board expects to approve the revisions by offline ballot by the end of April 2020.
Once the Auditing and Assurance Standards Oversight Council confirms that the AASB followed due process with proper regard for the public interest, it is expected that the revisions will be issued and effective in the CPA Canada Handbook – Assurance update in July 2020.
Group Audits
The AASB unanimously approved an exposure draft of Canadian Auditing Standard (CAS) 600, Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors). The exposure draft is based on the IAASB’s exposure draft of proposed revisions to International Standard on Auditing (ISA) 600. The exposure draft is expected to be issued in early May 2020, with a comment deadline of September 4, 2020.
Impact of COVID-19 on AASB Operations
AASB Annual Plan
The AASB approved its 2020-2021 Annual Plan in March 2020. The Annual Plan was developed before the uncertainties created by the COVID-19 pandemic. Considering the effects of COVID-19, the Board re-evaluated its activities in the first quarter of the Annual Plan, including stakeholder outreach and approach to meetings. The Board will reconsider its activities for the balance of the fiscal year as new information becomes available. It decided to reschedule its meetings for the first quarter as online meetings.
The AASB intends to consult with stakeholders over the coming months on three active international projects: extended external reporting, quality management, and group audits. It will do so while adopting an approach sensitive to stakeholders’ challenges and their ability to participate in the standard-setting process.
Standards Issued but Not yet Effective
The AASB discussed the effective dates of the following standards that have been approved but are not yet effective and whether any effective dates should be deferred:
- CAS 315, Identifying and Assessing the Risks of Material Misstatement;
- CAS 700, Forming an Opinion and Reporting on Financial Statements;
- Canadian Standard on Assurance Engagements (CSAE) 3416, Reporting on Controls at a Service Organization Relevant to User Entities’ Internal Control Over Financial Reporting;
- Canadian Standard on Related Services (CSRS) 4200, Compilation Engagements;
- CSRS 4400, Agreed-Upon Procedures Engagements; and
- Assurance and Related Services Guideline 50, Conducting a Performance Audit in the Public Sector in Accordance with CSAE 3001, Direct Engagements.
The Board decided that no action is required at this time. However, it asked staff to continue to consult with other standard setters, regulators, and other stakeholders, and to monitor the situation for any change in circumstances that may require the AASB to reconsider.
The Board will continue to actively monitor the current environment for further developments and communicate to stakeholders, as necessary.
AASB Strategic Plan
The AASB discussed a revised timeline to develop and publish a 2022-2025 Strategic Plan, to consider how the COVID-19 pandemic affects the content of the draft Strategic Plan and the timing of outreach with stakeholders. The Board’s original timeline included issuing a draft Strategic Plan for public comment in May 2020, with consultations planned between May and September 2020.
The AASB decided to delay issuing the draft Strategic Plan until a later date, likely January 2021, to provide the Board with time to consider the content and to provide stakeholders with the opportunity to engage with the Board and provide feedback. Under the revised timeline, the Board expects to issue its 2022-2025 Strategic Plan by July 2021. It will continue to actively monitor the current environment for further developments and communicate to stakeholders, as necessary.