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AASB Decision Summary – February 16, 2021

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)

Audits of Less Complex Entities (LCEs)

The AASB discussed the Audits of LCEs Advisory Group’s (Advisory Group) recent work. During the Board’s previous activities, stakeholders identified several matters in archived CAS 315, Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and Its Environment, that were challenging to apply in audits of LCEs. The Advisory Group examined whether these matters would be addressed in extant CAS 315, Identifying and Assessing Risks of Material Misstatement, and the related implementation guidance CPA Canada is developing. The Board concluded that the matters will be addressed appropriately.

The AASB discussed the next steps it should take in Canada to address areas of the other CASs that are difficult to apply in audits of LCEs.

Quality Management

The AASB discussed its approach to issuing an exposure draft on conforming amendments to other Canadian standards resulting from the Board’s January approval of Canadian Standard on Quality Management (CSQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements.

The AASB expects to review an exposure draft at a future meeting.

Assurance and Related Services Standards (other than CASs)

Future-oriented Financial Information

The AASB discussed elements of a possible project proposal to revise or replace Assurance and Related Services Guideline (AuG) 16, Compilation of a Financial Forecast or Projection, including the benefits of establishing a task force and a reference group to supplement the activities of a task force.

The AASB expects to review a project proposal for AuG-16 at a future meeting.