AASB

AASB Decision Summary – March 9-10, 2026

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 Standards on Quality Management (CSQM)

Technology Quality Management Workstream

The AASB discussed issues related to the International Auditing and Assurance Standards Board’s (IAASB) Technology Quality Management Workstream. Key issues discussed include :

the IAASB’s overarching approach for technology-related matters; and
the IAASB’s action plan to develop non-authoritative materials to support the consistent and effective application of the quality management standards when firms use technological tools enabled by emerging technologies in audit and assurance engagements.

At its June 2026 meeting, the IAASB is expected to discuss a proposed blueprint for its guide series, including the structure, topic areas, and content elements for each guide.

Canadian Auditing Standards (CASs)

Audit Evidence & Risk Response

The AASB discussed issues related to the IAASB’s project to revise International Standard on Auditing (ISA) 330, The Auditor’s Responses to Assessed Risks; ISA 500, Audit Evidence; and ISA 520, Analytical Procedures. Key issues discussed include:

clarifying that an analytical procedure that does not meet the definition of a substantive analytical procedure, can still provide audit evidence when performed in combination with tests of detail or tests of controls;
determining when tests of controls alone may be appropriate;
the auditor’s responsibilities with respect to obtaining audit evidence about the operating effectiveness of indirect controls that support the effective operation of direct controls;
clarifying the auditor’s consideration of the attributes of reliability, when evaluating the relevance and reliability of information intended to be used as audit evidence;
potential content for an appendix in ISA 500 related to the auditor’s use of technological tools; and
considering the significant consequential amendments to ISA 315, Identifying and Assessing the Risks of Material Misstatement.

At its June 2026 meeting, the IAASB is expected to approve an exposure draft of the three standards. The AASB will approve its Canadian exposure draft soon thereafter.

Listed Entity and Public Interest Entity

The AASB discussed the Canadian way forward in relation to the IAASB’s narrow-scope amendments to International Standards on Quality Management (ISQMs) and ISAs related to listed entity and public interest entity.

In its final narrow-scope amendments, the IAASB replaced the term “listed entity” with “publicly traded entity.” The AASB discussed whether to move ahead with a domestic project given the final IAASB narrow-scope amendments. After discussion, the Board decided to continue to defer adoption, consistent with proposals in its Exposure Draft, “Proposed Deferral of the IAASB’s Public Interest Entity Narrow-scope Amendments.”

Because of the AASB’s decision to defer, certain paragraphs in Canadian Standards on Quality Management (CSQMs) and CASs will differ from the related paragraphs in the ISQMs and ISAs. As a result, new Canadian amendments will be introduced in the CSQMs and CASs.

Following discussion, the AASB:

agreed that re-exposure is not necessary given the final Canadian amendments align with AASB’s decision to defer adoption, as exposed and supported by respondents; and
unanimously voted to approve the Canadian amendments to the CSQMs and CASs.

The Canadian amendments are expected to be published in a July 2026 Handbook update.

Targeted Standards in ISA 500 Series

The AASB discussed issues related to the Targeted Standards in the ISA 500 Series project , to revise ISA 501, Audit Evidence Specific Considerations for Selected Items (with a focus on inventory) and ISA 505, External Confirmations. Key issues discussed include:

the updated IAASB draft project proposal;
enhancing the alignment between ISA 501 and the foundational standards, particularly ISA 315 (Revised) and proposed ISA 330 (Revised), to reinforce the ISAs’ risk-based approach;
clarifying circumstances when third-party external confirmation procedures to obtain sufficient appropriate audit evidence for the existence and condition of inventory held under the custody and control of third parties may be appropriate;
reconsidering the use of negative confirmations when performed in combination with other substantive procedures, including the construct and completeness of the existing preconditions in ISA 505.15; and
exploring whether there is a need to perform external confirmation procedures for certain account balances, and how different approaches to external confirmations could be applied;

The IAASB is expected to approve the project proposal at its March 2026 meeting. The AASB will continue to discuss issues as it follows the IAASB’s progress on this project.

Other Canadian Standards (OCS)

Compilations of Future-oriented Financial Information (FOFI) and Pro Forma

The AASB discussed issues related to the approval of the Canadian Standard on Related Services (CSRS) 4250, Compilation Engagements on Future-oriented Financial Information and Pro Forma. Key issues discussed include:

all remaining issues and final changes to the standard, including the effective date; and
final due process items, including:
- determining whether re-exposure is required – given the nature of the comments received from Canadian interested and affected parties and resulting amendments to the exposed CSRS, the AASB concluded that re-exposure is not necessary as it would not likely result in new information that would change any of the AASB's decisions;
- reviewing the draft Basis for Conclusions;
- providing input on the implementation risk analysis; and
- reviewing the summary of due process steps completed.

Following discussion, the AASB unanimously voted:

not to re-expose the CSRS; and
to approve CSRS 4250 and withdraw Assurance and Related Services Guideline (AuG)-16, Compilation of a Financial Forecast or Projection.

The CSRS is effective for compilation engagements where the compilation engagement report is dated on or after July 1, 2028, with earlier application permitted.

The CSRS is expected to be published in the June 2026 Handbook - Assurance update, providing an approximately 24-month implementation period.

Review of Interim Financial Information

The AASB discussed the IAASB’s project to revise the International Standard on Review Engagements (ISRE) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. ISRE 2410 has not been adopted in Canada. Instead, a domestically developed standard, Section 7060, Auditor Review of Interim Financial Statements, is used. Key issues discussed include:

using the AASB’s Securities Regulations Advisory Group expertise to inform the Board on any key issues with the IAASB’s exposure draft and whether a response to the IAASB is necessary; and
focusing review of the IAASB’s exposure draft on the work effort aspects given its potential relevance in Canada.

At its June 2026 meeting, the AASB will discuss any key issues identified with the IAASB’s exposure draft and whether there is a need to respond to the IAASB.

Sustainability Assurance

The AASB discussed issues related to the approval of the Canadian Standard on Sustainability Assurance (CSSA) 5000, General Requirements for Sustainability Assurance Engagements. Key issues discussed include:

all remaining issues and final changes to the standard, including the effective date as a Canadian amendment; and
final due process items, including:
- reviewing key subject-matter translation focus areas related to Canadian amendments;
- reviewing the draft Basis for Conclusions;
- providing input on the implementation risk analysis; and
- reviewing the summary of due process steps completed.

Following discussion, the AASB unanimously voted to approve CSSA 5000 and withdraw Canadian Standard on Assurance Engagements (CSAE) 3410, Assurance Engagements on Greenhouse Gas Statements.

The CSSA is effective for assurance engagements on sustainability information reported for periods beginning on or after, or as at a specific date on or after, December 15, 2027, with earlier application permitted.

The CSSA is expected to be published in the May 2026 Handbook - Assurance update, providing an approximate 18-month implementation period.