Skip to main content

Canadian Auditing Standards

Targeted Standards in the Canadian Auditing Standards (CAS) 500 Series

Summary

Advancements in entities’ internal systems and the increasing use of technological tools are reshaping how auditors approach key areas of audit evidence.

  • Inventory: Rapid advancements in inventory systems and management processes are driving the need for changes in how auditors assess the existence and condition of inventories.
  • External confirmations: The widespread adoption of technology-enabled confirmation procedures introduces new risks and considerations, including how auditors maintain control over automated confirmation processes when using intermediaries.

These developments have led to the Targeted Standards in the International Standards on Auditing (ISA) 500 Series project. This project will revise the following Canadian Auditing Standards (CASs) to better align with contemporary business and audit environments, focusing on the impact of technology:

  • CAS 501, Audit Evidence – Specific Considerations for Selected Items; and
  • CAS 505, External Confirmations.

Staff Contact(s)

Jasmine Saini, CPA, CA Principal, Auditing and Assurance Standards Board

Phone number  +1 647 264 7607
Email address  [email protected]

Project Status

  • Information gathering

    The IAASB gathered information on the initial issues identified as relevant to the revision of targeted standards within the ISA 500 Series.​

  • Approving project

    The IAASB approved the project proposal for the ISA 500 Series in March 2026.

  • Engaging communities
  • Deliberating feedback
  • Final pronouncement

News

July 8, 2026

Meeting Summary

AASB Decision Summary – June 8-9, 2026

The AASB discussed the Targeted Standards in the ISA 500 Series project, which covers revisions to ISA 501, Audit Evidence Specific Considerations for Selected Items (with a focus on inventory) and ISA 505, External Confirmations.

Regarding proposed amendments to ISA 501, key issues discussed include:

  • enhancing the application material to address the use of technologies in managing and auditing inventory and the use of an expert when management uses technology in inventory management, leveraging ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement;
  • supporting attendance at inventory counts either physically or remotely, using technological tools, where appropriate, and encouraging the IAASB to clarify in application material when each approach would provide sufficient appropriate audit evidence; and
  • clarifying the sufficiency and appropriateness of audit evidence obtained for inventory existence and condition in circumstances involving cycle counts or inventory held at multiple locations.

Regarding proposed amendments to ISA 505, key issues discussed include:

  • clarification of the role of an “intermediary,” including establishing boundaries on its facilitation role and distinguishing between control and responsibility over the external conformation process;
  • appropriateness of the verb “determine” to describe the auditor’s required work effort in the proposed requirement for the auditor to perform external confirmations on cash, cash equivalents, and accounts receivable;
  • the IAASB’s proposals on professional skepticism; and
  • the proposed removal of the “stand back” requirements.

The IAASB will continue to discuss issues related to ISA 501 and ISA 505 at its September Board meeting, with approval of the exposure draft anticipated in December 2026.

January 19, 2026

Meeting Summary

AASB Decision Summary – January 19, 2026

The AASB discussed several topics relevant to the IAASB’s ISA 500 Series project to revise ISA 501, Audit Evidence – Specific Considerations for Selected Items – Inventory existence and condition, and ISA 505, External Confirmations. The Board will share feedback from AASB members directly with the IAASB Project Team through an engagement opportunity alongside other jurisdictional standard setters. The IAASB Project Team is developing a project proposal, which is expected to be approved by the IAASB in March 2026.

December 1, 2025

Meeting Summary

AASB Decision Summary – December 1-2, 2025

The AASB discussed issues from the IAASB’s information-gathering and research activities in anticipation of a project to revise targeted standards in the ISA 500 Series. Key issues discussed included:

  • the scope of standard-setting activities:
    • support for revising considerations in respect of the existence and condition of inventory in ISA 501, Audit Evidence – Specific Considerations for Selected Items and external confirmations in ISA 505, External Confirmations;
    • determination that no standard setting is warranted for the other topics in ISA 501 – litigation and claims, and segment information.
    • agreed that no revisions to ISA 530, Audit Sampling, are necessary, but encouraged the IAASB to develop non-authoritative materials as a way to address specific audit sampling challenges identified; and
  • the IAASB’s draft project proposal, including:
    • the completeness of the proposed actions to address the key issues identified in the project; and
    • the project’s timeline, priorities, resources, output, and impact.

At its March 2026 meeting, the AASB will discuss the IAASB’s updated project proposal, which is anticipated for approval at the IAASB’s March meeting.

June 9, 2025

Meeting Summary

AASB Decision Summary – June 9-10, 2025

The AASB discussed preliminary issues identified in relation to ISA 501, Audit Evidence – Specific Considerations for Selected Items (covers the discrete topics of existence and condition of inventory, litigation and claims, and segment information) ISA 505, External Confirmations, and ISA 530, Audit Sampling. This is a new project for the IAASB that is currently at the information gathering stage. Key issues discussed included:

  • the development of the IAASB’s project proposal;
  • the common drivers for revisions to ISA 501, ISA 505, and ISA 530, being:
    • addressing the increased use of technology; and
    • clarifying or enhancing the auditor’s work effort;
  • the completeness and relevance of issues identified during the information gathering stage;
  • the key risks that need to be addressed in ISA 530 because of the increased use of technology-facilitated sampling tools; and
  • the root causes of the challenges auditors face in sampling.

Meeting & event summaries

July 8, 2026

AASB Decision Summary – June 8-9, 2026

The AASB discussed the Targeted Standards in the ISA 500 Series project, which covers revisions to ISA 501, Audit Evidence Specific Considerations for Selected Items (with a focus on inventory) and ISA 505, External Confirmations.

Regarding proposed amendments to ISA 501, key issues discussed include:

  • enhancing the application material to address the use of technologies in managing and auditing inventory and the use of an expert when management uses technology in inventory management, leveraging ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement;
  • supporting attendance at inventory counts either physically or remotely, using technological tools, where appropriate, and encouraging the IAASB to clarify in application material when each approach would provide sufficient appropriate audit evidence; and
  • clarifying the sufficiency and appropriateness of audit evidence obtained for inventory existence and condition in circumstances involving cycle counts or inventory held at multiple locations.

Regarding proposed amendments to ISA 505, key issues discussed include:

  • clarification of the role of an “intermediary,” including establishing boundaries on its facilitation role and distinguishing between control and responsibility over the external conformation process;
  • appropriateness of the verb “determine” to describe the auditor’s required work effort in the proposed requirement for the auditor to perform external confirmations on cash, cash equivalents, and accounts receivable;
  • the IAASB’s proposals on professional skepticism; and
  • the proposed removal of the “stand back” requirements.

The IAASB will continue to discuss issues related to ISA 501 and ISA 505 at its September Board meeting, with approval of the exposure draft anticipated in December 2026.

January 19, 2026

AASB Decision Summary – January 19, 2026

The AASB discussed several topics relevant to the IAASB’s ISA 500 Series project to revise ISA 501, Audit Evidence – Specific Considerations for Selected Items – Inventory existence and condition, and ISA 505, External Confirmations. The Board will share feedback from AASB members directly with the IAASB Project Team through an engagement opportunity alongside other jurisdictional standard setters. The IAASB Project Team is developing a project proposal, which is expected to be approved by the IAASB in March 2026.

December 1, 2025

AASB Decision Summary – December 1-2, 2025

The AASB discussed issues from the IAASB’s information-gathering and research activities in anticipation of a project to revise targeted standards in the ISA 500 Series. Key issues discussed included:

  • the scope of standard-setting activities:
    • support for revising considerations in respect of the existence and condition of inventory in ISA 501, Audit Evidence – Specific Considerations for Selected Items and external confirmations in ISA 505, External Confirmations;
    • determination that no standard setting is warranted for the other topics in ISA 501 – litigation and claims, and segment information.
    • agreed that no revisions to ISA 530, Audit Sampling, are necessary, but encouraged the IAASB to develop non-authoritative materials as a way to address specific audit sampling challenges identified; and
  • the IAASB’s draft project proposal, including:
    • the completeness of the proposed actions to address the key issues identified in the project; and
    • the project’s timeline, priorities, resources, output, and impact.

At its March 2026 meeting, the AASB will discuss the IAASB’s updated project proposal, which is anticipated for approval at the IAASB’s March meeting.

June 9, 2025

AASB Decision Summary – June 9-10, 2025

The AASB discussed preliminary issues identified in relation to ISA 501, Audit Evidence – Specific Considerations for Selected Items (covers the discrete topics of existence and condition of inventory, litigation and claims, and segment information) ISA 505, External Confirmations, and ISA 530, Audit Sampling. This is a new project for the IAASB that is currently at the information gathering stage. Key issues discussed included:

  • the development of the IAASB’s project proposal;
  • the common drivers for revisions to ISA 501, ISA 505, and ISA 530, being:
    • addressing the increased use of technology; and
    • clarifying or enhancing the auditor’s work effort;
  • the completeness and relevance of issues identified during the information gathering stage;
  • the key risks that need to be addressed in ISA 530 because of the increased use of technology-facilitated sampling tools; and
  • the root causes of the challenges auditors face in sampling.

Disclaimer

This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal voting process.