AASB

AASB Decision Summary — December 3-4, 2018

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)

Auditor Reporting

The AASB unanimously approved an exposure draft, “Communication of Key Audit Matters in the Auditor’s Report.” The exposure draft is expected to be issued in January 2019 and will have 90-day comment period. 

The AASB is considering amending CAS 700, Forming an Opinion and Reporting on Financial Statements, to require auditors to disclose the engagement partner name when the auditor is also required to submit Form AP, Auditor Reporting of Certain Audit Participants, with the U.S. Public Company Accounting Oversight Board for that engagement. The Board plans to further discuss an amendment at a December 2018 conference call.

Quality Control

The AASB provided input to the CPA Canada nominee on the International Auditing and Assurance Standards Board (IAASB) about issues related to the IAASB’s project to adopt:

  • proposed International Standard on Quality Management (ISQM) (formerly International Standard on Quality Control) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements;
  • proposed ISQM 2, Engagement Quality Reviews; and
  • proposed International Standard on Auditing (ISA) 220, Quality Management for an Audit of Financial Statements.

The IAASB is expected to approve the exposure drafts of ISQM 1, ISQM 2, and ISA 220 at its December 2018 meeting. The AASB reviewed a draft Canadian exposure draft that it expects to approve in January 2019.

Assurance and Related Services Standards (other than CASs)

Auditor’s Consent to the Use of the Auditor’s Report in Connection with Designated Documents

The AASB unanimously approved Section 7170, Auditor's Consent to the Use of the Auditor's Report in Connection with Designated Documents, and consequential amendments. The Board concluded that the changes made in finalizing Section 7170 were not significant; therefore, re-exposure was unnecessary. The revisions will be effective for an auditor's consent issued on or after June 1, 2019. Once the Auditing and Assurance Standards Oversight Council (AASOC) confirms that due process was followed, the revisions are expected to be included in a March 2019 Handbook update.

AASB Planning

Strategic and Annual Plan

The AASB reviewed a first draft of its 2019-2020 Annual Plan. The Board provided input on proposed activities, targets, and priorities for the next fiscal year. The Board is expected to approve the final Annual Plan in the first quarter of 2019.

The AASB reviewed the assessment of progress on actions taken to date, and those expected to be completed, to meet objectives in the 2016-2020 Strategic Plan. The Board concluded that it is well-positioned to meet its objectives by the end of 2020.

Terms of Reference

The AASB unanimously approved its revised Terms of Reference and its new Statement of Operating Procedures. Once the AASOC approves the revisions, they will be published on the Board’s website.

Other

Future Strategy

The AASB provided input to the CPA Canada nominee on the IAASB on a draft consultation paper on the IAASB’s future strategy and work plan. The IAASB is expected to approve the consultation paper in January 2019. The Board plans to submit a response to the consultation paper.