The Auditing and Assurance Standards Oversight Council (AASOC) discussed the activities of the Auditing and Assurance Standards Board (AASB) and related matters.
At its virtual meeting held on September 28, 2021, the AASOC received presentations on, and discussed the following:
- Chair’s Opening Remarks
- AASB Update
- AASB Terms of Reference
Chair’s Opening Remarks
AASOC Chair Kevin Nye welcomed members and observers. He mentioned that Jean-Francois Trépanier has assumed the role of Vice-President, Standards, and that Helen Belanger has taken over the Council’s secretary role from Noor Abu-Shaaban.
AASB Chair Bob Bosshard introduced Karen DeGiobbi, the new AASB Director starting October 1, 2021. He thanked Eric Turner, the previous AASB Director, for his service and dedication to the Board and to the profession.
Mr. Bosshard provided an overview on the AASB’s activities since the Board’s last update to AASOC. His update included work streams, highlighting the issuance of the Discussion Paper, “Exploring Standard-Setting Options for Audits of Less Complex Entities,” in early September, with a comment deadline of December 10, 2021. He stated that the Board plans to actively support a Canadian-specific post-implementation analysis of auditor reporting. Mr. Bosshard added that the Board approved a project proposal to revise the Joint Policy Statement Concerning Communications between Actuaries involved in the Preparation of Financial Statements and Auditors Joint Task Force (JPS JTF). The final document will be approved in March 2023 in time for the implementation of IFRS 17 Insurance Contracts.
Regarding the Compilation of Future-oriented Financial Information (FOFI) project, Mr. Bosshard stated that it has started with a revised timeline. The AASB is trying to accelerate the time to market by instituting a FOFI Reference Group and a Task Force to broaden the conversation with stakeholders.
At its September meeting, the AASB received a presentation from Canadian Public Accountability Board (CPAB) representatives. They noted their views on recent inspection findings and provided an update on CPAB’s projects relevant to the AASB and its activities. The Board also discussed an enhanced process for identifying and reporting emerging issues and their impact on standards and guidance.
On the topic of securities regulatory developments, Mr. Bosshard said that the Canadian Securities Administrators (CSA) introduced National Instrument (NI) 52-112, Non-GAAP and Other Financial Measures Disclosure, dealing with non-GAAP financial measures effective August 2021. He noted that the Securities Regulatory Advisory Group (SRAG) has not identified any implications from a standards perspective. SRAG and AASB staff will monitor implementation of NI 52-112 in practice to determine whether non-authoritative guidance may be needed. Mr. Bosshard also mentioned the CSA’s proposed changes to annual filing requirements, where the financial statements, management discussion and analysis, and Annual Information Form will be consolidated into one filing. The SRAG is following the progress of the proposals and whether conforming changes to standards may be required.
AASB Terms of Reference
Mr. Bosshard explained that the AASB’s Terms of Reference require the Board to review them at least every three years. The last review was in December 2018, so the next review will be due at the end of 2021. He asked the Council whether it had concerns with the Board deferring the review by no more than one year. The Board thinks this is necessary so it can consider:
- the implications of ongoing developments and findings of the Independent Review Committee on Standard Setting; and
- the review of the recently implemented International Audit and Assurance Standards Board’s framework of activities that may be relevant to the Terms of Reference.
When it begins the review, the AASB plans to update its Terms of Reference, Statement of Operating Procedures, and Standard-Setting Due Process Manual.
The AASOC agreed with the AASB’s approach to defer reviewing its Terms of Reference to 2022.
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.