The IAASB is conducting a post-implementation review of ISA 540 (Revised), Auditing Accounting Estimates and Related Disclosures. This standard became effective for audits of financial statements for periods beginning on or after December 15, 2019.
As part of its due process, the Auditing and Assurance Standards Board (AASB) monitors IAASB post-implementation reviews (PIR) of international standards adopted in Canada, such as Canadian Auditing Standard (CAS) 540, Auditing Accounting Estimates and Related Disclosures. The AASB promotes awareness of IAASB PIRs in Canada and consults with interested and affected parties by performing Canadian activities to inform the IAASB’s ISA 540 PIR request for information.
The objectives of the IAASB’s ISA 540 PIR request are to:
- Determine whether ISA 540 (Revised) has achieved its intended purpose by identifying:
- improvements or benefits from applying the revised standard; and
- practical challenges or questions regarding its application, including whether it is being consistently understood and implemented.
- Determine what actions, if any, are needed to address identified matters.
Fundamental questions, if any, arising about the clarity of the core objectives or principles in the requirements of ISA 540 (Revised) may indicate that they are not working as intended.
The IAASB’s primary method for gathering feedback during its PIR of ISA 540 (Revised) was a public consultation survey, open until June 15, 2026. The AASB encouraged all Canadian interested and affected parties to complete the survey and share their perspectives directly with the IAASB’s project team. Feedback received will inform the IAASB project team’s analysis and support the development of recommendations for the IAASB’s consideration.
The AASB will hosted roundtable discussions, in both English and French, to gather feedback on the revised CAS 540 to inform its response to the IAASB’s public consultation survey on ISA 540 (Revised).