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AASB Decision Summary – July 15, 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)

Audit Evidence

The AASB provided input to the International Auditing and Assurance Standards Board (IAASB) members from Canada on issues related to the IAASB’s project to revise International Standard on Auditing (ISA) 500, Audit Evidence. Key issues discussed included:

  • the proposed approach for using the terms “consistent and inconsistent” and “corroborate and contradict” in the context of exercising professional skepticism relating to audit evidence; and
  • including new requirements in the proposed standard to:
    • address professional skepticism, and
    • conclude whether sufficient appropriate audit evidence has been obtained.

Communicating with Actuaries

The AASB received an update on information gathering activities dealing with recent revisions to significant auditing and accounting standards impacting both the financial reporting and audit of actuarial estimated amounts. These revisions have implications for the “Joint Policy Statement Concerning Communications between Actuaries Involved in the Preparation of Financial Statements and Auditors.”

The AASB will review a project proposal to revise the Joint Policy Statement at a future meeting.


The AASB provided input to the IAASB members from Canada on issues related to information the IAASB gathered on ISA 240, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements. Key issues discussed included:

  • whether further transparency is needed related to fraud in the auditor’s report;
  • enhanced engagement team discussions on fraud considerations; and
  • clarifying the relationship between ISA 240 and ISA 250, Consideration of Laws and Regulations in an Audit of Financial Statements, by developing new application material.

Assurance and Related Services Standards (other than CASs)

Audits of Less Complex Entities

The AASB discussed a draft Canadian discussion paper,” Exploring Standard-setting Options for Audits of Less Complex Entities.” This discussion paper will seek input from stakeholders on possible options to explore in Canada to address the challenge of applying the CASs to audits of less complex entities. This discussion paper also seeks views on:

  • the concept of a separate standard for the audit of less complex entities; and
  • the IAASB’s Exposure Draft, “Proposed International Standard on Auditing for Audits of Financial Statements of Less Complex Entities.”

The AASB expects to approve the Canadian discussion paper in August 2021, for issuance in September 2021.

Extended External Reporting

The AASB provided input on a draft supporting document that will be issued to assist Canadian practitioners in using the IAASB’s “Non-Authoritative Guidance on Applying ISAE 3000 to Extended External Reporting (EER) Assurance Engagements.” This is for engagements performed under Canadian Standard on Assurance Engagements (CSAE) 3000, Attestation Engagements Other than Audits or Reviews of Historical Financial Information.

The AASB expects to issue the supporting document in the fall of 2021.