AASOC

AASOC Meeting Minutes – Oct 29, 2018

The Auditing and Assurance Standards Oversight Council (AASOC) discussed and approved the Auditing and Assurance Standards Board’s (AASB) due process for making changes to auditor reporting standards.

Attendees

Chair:

 

Bruce Winter

Attendees:

 

 

Ian Bandeen
Carol Bellringe
Kate Bewley
Donna Bovolaneas
Sheila Filion
John Gordon
Janet Grove
Cameron McInnis
Kevin Nye
Carol Paradine
Neil Sinclair
Karen Stothers
Bruce West

 

Regrets:

 

John Walker

 

Guests:

 

Ken Charbonneau, Chair, AASB
Stephenie Fox, Vice-President, Standards
Eric Turner, Director, Auditing and Assurance Standards Board

 

Secretary:

 

Birender Gill

 

Chair’s Opening Comments

Bruce Winter welcomed members and thanked them for attending this special meeting. He explained that from time to time, the AASB approves changes to a standard and requests that AASOC confirm due process, outside of the regular meeting schedule. It allows the Board to issue the standard in the CPA Canada Handbook – Assurance. Today’s meeting has this single purpose.

Due Process for Auditor Reporting

Bruce Winter asked AASB Chair Ken Charbonneau to highlight the changes made to the auditor reporting standards. Mr. Charbonneau explained the key changes made related to reporting for key audit matters (KAM) and the staggered dates for roll out of this disclosure. He referred to the Basis for Conclusions, which explained these items in full detail. Mr. Charbonneau said that the due process checklist outlines the Board’s activities, from the approval of the auditor reporting standards in April 2017 to now. One Council member asked whether the Board had any concerns about the Canadian auditor reporting standards being out of sync with the U.S. standards. Mr. Charbonneau replied that the Board’s changes address this issue and align the standards again. Another member asked whether the Board’s decision was unanimous, or if members had differing views. Mr. Charbonneau clarified that there was one dissenting vote. The member followed up on the reason and whether this was documented in any of the materials. Mr. Charbonneau replied that the dissenting vote came from one member who believed there was insufficient discussion of the issue. This is documented in the meeting minutes, which are not a public document. Mr. Winter explained that this is different from the International Auditing and Assurance Standards Board (IAASB), whose minutes are public.

Another member asked about the consultations conducted to inform these changes. Mr. Charbonneau explained that when the AASB exposed the auditor reporting standards in 2015, one respondent identified a concern with requiring KAM reporting for investment funds. To learn more about this issue now, the Board consulted with various stakeholders. Based on this feedback, the Board concluded that it should reconsider what the appropriate KAM reporting is for investment funds. It is now developing an exposure draft for discussion of this matter at its December meeting.

A member asked about the Board’s decision not to re-expose the standard to seek input on these changes. Mr. Turner explained that the Board followed the due process in considering where the changes should be re-exposed or not. It concluded that re-exposure is not required because the requirement to communicate KAM for entities listed on the Toronto Stock Exchange was proposed in the Board’s Invitation to Comment in 2015 and was broadly supported by stakeholders.

Following this discussion, voting AASOC members present at the meeting unanimously confirmed that the AASB had followed due process with proper regard for the public interest when approving changes to the auditor reporting standards.

Other Administrative Matters

During the meeting, based on members’ comments, the following points were noted for AASB follow up:

  • AASB to consider including generic considerations as to whether a proposed standard needs to be re-exposed in Appendix 1 to the due process checklist.
  • AASOC requested a comparison of the process and documentation of “votes against” a proposed standard as between the AASB and IAASB.
  • As part of developing the exposure draft that will address KAM in the context of investment funds, AASOC has requested a clear description of which funds are covered by National Instrument 81-106.

Next Meeting

The next AASOC meeting will be held on December 20, 2018, in Toronto.

Termination

There being no further matters to discuss, the meeting was terminated.