Users of audited financial statements have asked auditors to provide more information in their reports about significant matters in the financial statements, as well as about the conduct of the audit.
In early 2017, the AASB unanimously approved enhanced auditor reporting standards.
In late 2018, the AASB made amendments to CAS 700, Forming an Opinion and Reporting on Financial Statements, requiring auditors to communicate key audit matters in the auditor’s report for audits of complete sets of general purpose financial statements of entities listed on the Toronto Stock Exchange (TSX), other than entities that are required to comply with National Instrument 81-106, Investment Fund Continuous Disclosure. Such requirements will be effective for periods ending on or after December 15, 2020.
By not requiring reporting of key audit matters by all listed entities, the AASB acknowledged that certain listed entities, such as venture issuers, are granted certain regulatory relief by securities regulators. Until auditor reporting evolves, it is difficult to conclude on the costs and benefits of reporting on key audit matters by such entities.
As a result, in this phase of the project, the AASB will conduct research to consider whether reporting on key audit matters should be required for audits of other listed entities. This research will include examining the experience of jurisdictions that have already implemented the enhanced auditor reporting standards.