AASOC

Annual Report 2021-2022

Chair Message

Photo of Kevin Nye. In 2021-2022, amid continued challenges generated by the COVID-19 pandemic, the Council remained steadfast in our commitment to serving the public interest.

We adapted to the shifting environment by leaning on technology and utilizing virtual formats to stay connected with our stakeholders, staff, members, and the Auditing and Assurance Standards Board (AASB). We maintained an open line of communication ensuring stakeholders voices and opinions were heard.

An important focus for us this past year was the evolving area of sustainability standards and reporting in Canada. In May 2021, together with the Accounting Standards Oversight Council (AcSOC), we formed the Independent Review Committee on Standard Setting (IRCSS). The IRCSS’s mandate is to conduct a review of the governance and structure for establishing Canadian accounting, auditing, and assurance standards, and to identify what might be needed for the future – including sustainability standards. Currently, the IRCSS is deliberating feedback received on its Consultation Paper, and their final recommendations are expected in the coming months.

We also look forward to the establishment of the International Sustainability Standards Board’s (ISSB) Montreal centre, where the Board will host significant standard-setting responsibilities and associated functions. These developments reflect global trends concerning the imperative need to address a broad range of environmental, social, and governance (ESG) matters beyond the traditional financial reporting. The AASB will continue to engage with these matters in the coming year to ensure assurance standard setting in Canada is well placed in a rapidly evolving global reporting landscape.

In July 2021, we welcomed Bob Bosshard as the new AASB Chair. He will be leading the AASB as it undertakes activities within its newly issued 2022-2025 Strategic Plan.

The Independence Standing Committee (ISC) started its activities this year after we appointed, jointly with the Public Trust Committee (PTC), the ISC Chair and public members of the ISC. We provided an observer for each ISC meeting and received reports on recent activities from the ISC Chair and staff.

Critically important to the Council is the continuing focus on increasing the diversity of voices within the Council and Board. I am proud of the progress we have made in our appointments and recognize that diversity is a journey. We will continue being intentional in our recruitment activities to include more voices from underrepresented groups.

We continue seeing rapid changes in the environment and stakeholders’ needs and expectations. Despite the uncertainties, I am confident in the Council’s strong foundation and believe we are well positioned to meet new challenges head on.

On an equally important note, we want to thank our members, staff, and volunteers for their commitment and dedication toward standard setting in the public interest.

Kevin Nye
AASOC Chair

Performance Reviews

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We monitor and evaluate the performance of the AASB to ensure it considers the public interest and the needs of its stakeholders in standard setting. We also ensure due process is followed by receiving regular reports from the Board and reviewing the effectiveness of its processes. We also provide an observer to AASB meetings.

Our Performance Review Committee (PRC) monitors and evaluates the performance of the AASB on an annual basis. The Committee provided input into the Board’s new 2022-2025 Strategic Plan, the Board’s 2022-2023 Annual Plan, and the Board’s 2021-2022 Annual Report. Lastly, the PRC has free-flowing dialogues with the Board Chair on pressing issues that the Board is managing.

Key AASB 2021-2022 Successes

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The Board's dedication to standard setting and serving the public interest was demonstrated through its strong performance and achievement of this year’s Annual Plan. The Board continued its operations in a virtual environment this year and despite some challenges due to remote operations, the Board:

Finalized and published its 2022-2025 Strategic Plan.
Held eight regular meetings to continue to progress its projects and review input received from stakeholders.
Approved two standards and the related conforming and consequential amendments.
Launched five new projects on Future-oriented Financial Information (FOFI), Joint Policy Statement (JPS), Fraud, Going Concern, and Listed Entity and Public Interest Entity (PIE).
Responded to eight formal requests for input through discussion papers, online surveys or direct questions.
Developed and published seven articles of guidance and co-produced two webinars on emerging issues and assurance standards, including on applying assurance standards to sustainability and other extended external reporting, to meet the needs of practitioners and provide thought leadership.
Engaged with stakeholders through 79 outreach sessions and 21 roundtable discussions.

See the AASB’s Annual Report for full details.

By the Numbers

Read about AASB’s communications and outreach activities this year, including key statistics.

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Independence Standing Committee

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The Independence Standing Committee’s (ISC) mandate is to assist the Public Trust Committee (PTC) in serving the public interest by recommending high-quality independence standards for proposed adoption by the Canadian profession’s provincial bodies in their own provincial codes of ethics by all Canadian CPAs. Along with the PTC, we appointed a Chair and public members of the ISC, and although we have a limited oversight role with respect to the ISC’s activities, AASOC receives regular updates and information at its meetings.

The ISC exposes for public comment in Canada proposed changes to the Independence requirements of the International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional Accountants (the IESBA Code).

The ISC plans to make recommendations in the next fiscal year, for changes to renew the Canadian Independence standards such that they are no less stringent than the requirements included in the IESBA Code unless in respect of a particular provision it is prohibited by law or regulation or it is determined not to be in the public interest.

Our Year in Review

Independent Review Committee on Standard Setting

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In May 2021, we established the Independent Review Committee on Standard-Setting (IRCSS) jointly with AcSOC. The IRCSS is conducting a review of the current governance and structure for establishing Canadian accounting, auditing and assurance standards, as well as what might be needed for the future, including sustainability standards. The IRCSS issued a Consultation Paper in December 2021 to engage with stakeholders and gather feedback that will help identify recommendations to ensure Canadian standard setting continues to be independent and internationally recognized.

The IRCSS made a recommendation in the December Paper that a Canadian Sustainability Standards Board be established. The Paper also covered the independence of standard setting, time to market, and engaging stakeholders, especially users. Other issues included transparency and accountability, and effectiveness of governance and oversight.

We look forward to the final recommendations of the IRCSS later in 2022 and stand ready to continue our collaborative approach to oversight in the public interest.

Continuous improvement of our oversight processes

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We continued to focus on evolving the role of the Council to become more strategic by improving our processes, staying abreast of international issues, and updating certain governing documents, including our terms of reference.

International standard-setting developments, the formation of the IRCSS and a potential sustainability standards board, continued to be important discussion topics this year. They gave us opportunities to explore new ways to meet changing stakeholder needs more quickly and effectively

Strategic Plan

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A main focus this year was the AASB’s new 2022-2025 Strategic Plan on which we provided input. The AASB’s strategy considers the changing environment with a focus on understanding and responding to the related emerging issues and needs of stakeholders.

A key area receiving immediate action is to address the challenges of applying standards to the audit of the less complex entity. Also featured prominently is the impact of new technologies, assurance for new types of sustainability and performance reporting, and the changing public confidence in audits. The strategy also prioritizes enhancing engagement with stakeholders to keep abreast of their needs and collaborate with them to develop solutions. This strategy charts a path that will lead the AASB to continue to set high-quality standards and guidance that are responsive to the public interest.

Retirements, Appointments and Reappointments

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We are pleased to announce new appointments and reappointments to AASOC, and the AASB, and we thank those retiring this year. See the appointments page for full details.

Members

Headshots of AASOC members

First row L-R: Kevin Nye (Chair), Ian Bandeen (member), Donna Bovolaneas (member), Sheila Filion (member), Janet Grove (member), Carla-Marie Hait (member)
Second row L-R: Gary Hannaford (member), Donald Newell (member), Fred Pries (member), Neil Sinclair (member), Michael Tambosso (member), Johnny Walker (member)
Third row L-R: Bruce West (member), Paul Winton (member), Beili Wong (member), Stacy Hammett (non-voting member), Renée Chen (non-voting member)