Meeting Minutes
The Auditing and Assurance Standards Oversight Council (AASOC) met on July 6, 2023. The meeting was hosted in person at the Chartered Professional Accountants of Canada Toronto offices and virtually on the Zoom platform.
Call to Order
AASOC Chair Kevin Nye called the meeting to order at 10:05 a.m. (EST). An in-camera session for Council members was held from 9:30 a.m. to 10:05 a.m.
Approval of Minutes
AASOC approved the minutes from April 3, 2023, as written.
Chair's Opening Remarks
Mr. Nye shared a land acknowledgment to begin the meeting.
AASB Chair's Report and Update
Bob Bosshard, Chair of the Auditing and Assurance Standards Board (AASB), and Karen DeGiobbi, Director of Auditing and Assurance, provided an update on key Board activities. Included in the materials was an annual status summary of the projects currently in progress, identifying the public interest for each project.
The International Audit and Assurance Standards Board (IAASB) recently approved the International Sustainability Standard on Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements. In January, the AASB created a Sustainability Assurance Committee, a standing committee to assist the Board with subject-matter expertise. The AASB exposure draft will be approved in August. It is designed to provide a standard for practitioners to follow when executing a sustainability assurance engagement. The standard is framework agnostic and practitioner-neutral. The AASB plans to engage the Canadian Sustainability Board (CSSB) on this item.
The proposed amendments to Canadian Auditing Standard (CAS) 570, Going Concern, are being exposed, with community engagement underway. This standard has a risk-based approach and requires the practitioner to understand the environment in which the entity conducts its affairs. An AASOC member asked whether the Going Concern and Fraud projects have any public interest concerns with the plan to finalize them together. Since both projects propose changes to the audit report, the AASB and IAASB think that these changes should have the same effective date.
The IAASB’s proposed standard on auditing less complex entities continues in the post-exposure-draft stage. The IAASB will approve the proposed standard in September 2023. Following that, the AASB will consider its way forward. There is no preconceived idea on how to proceed in Canada to respond to concerns about scalability and proportionality. AASOC encouraged AASB to discuss with regulators the different types of listed and non-listed entities and how the proposed standard would be adopted.
Canadian Sustainability Standards Board (CSSB)
CSSB Chair Charles-Antoine St-Jean provided an update on activities since the last AASOC meeting. In addition to what was stated in the Council report, the first Board meeting has been scheduled for July 18-19, 2023, in Toronto. It is anticipated that the full Board complement will be in place by early fall. Focus for the third member cohort are representatives from the investment community, Quebec, not-for-profit organizations, and small to medium-size enterprises (SMEs).
IFRS Sustainability S1 and S2 from the International Sustainability Standards Board (ISSB) have been officially released. The CSSB is connecting with interested and affected parties to explain the scopes from a technical perspective. Meetings with various government authorities are being held in parallel.
The impact of these standards on SMEs is a topic of discussion with various authorities in Canada. Capacity concerns have been raised in terms of how these standards will be deployed. Disclosure taxonomy does not currently exist in Canada, but conversations are being held on how that could be developed.
Consultation on ISSB agenda priorities with interested and affected parties is in progress. Three research projects on sustainability-related risks and opportunities are associated with:
- biodiversity, ecosystems, and ecosystem services;
- human capital; and
- human rights.
A fourth research project explores how integrated information in financial reporting could go beyond the requirements related to connected information in IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures.
An AASOC member asked about recruiting public sector representation from Quebec for the CSSB. A public call was made in November for volunteers from different industries. Outreach in Quebec has been successful and should result in a good range of candidates for interviews scheduled for the end of July.
AASOC discussed CSSB members’ experience with standards. The Board has planned a robust onboarding process, including education on due process and oversight. Board members have a healthy respect for the fundamental tenets of due process and bring extensive technical knowledge to the table.
AASOC asked about the plan for Indigenous representation from northern territories. Mr. St-Jean assured the Council that the CSSB takes Indigenous representation seriously and discusses the topic regularly.
The Canadian Pension Fund announced it will be supporting IFRS Sustainability S1 and S2. AASOC asked how the CSSB will engage the Fund with the Canadian adoption. The Board has some strong connections with pension funds in Canada and will ensure regular communication with them and other parties connected to pension funds.
The CSSB has received support from regulators and will work with them to ensure Canadians’ needs are considered regarding sustainability in Canada.
Education Session: Generative Artificial Intelligence (AI)
Cathy Cobey, an EY Global Trusted AI Advisory Leader, shared a presentation focused on AI. The AASB presented its efforts for monitoring emerging issues around the adoption, the use, and the impact of technology on standards; current revisions to address them; and guidance related to technology.
Education Session: Emerging Environmental, Social, and Governance (ESG) Trends
Katie Dunphy, a Partner in KPMG’s ESG practice, shared a presentation on emerging ESG trends.
Adjournment
Having no further business, the Chair adjourned the public portion of the meeting at 3:00 p.m.
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The Auditing and Assurance Standards Oversight Council (AASOC) is an independent, volunteer body established by the Canadian Institute of Chartered Accountants (now Chartered Professional Accountants of Canada) in 2002. It serves the public interest by overseeing and providing input on the activities of the Auditing and Assurance Standards Board (AASB), which sets standards for assurance and related service engagements. Reporting to the public and consisting of prominent leaders from business and regulators, AASOC’s responsibilities include appointing AASB members, providing input on strategic priorities and evaluating the performance of the AASB.