Canadian Auditing Standards

Auditor Reporting – Key Audit Matter Reporting and Other Considerations  

Summary

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.

Staff Contact(s)

Eric Turner, CPA, CA

Director, Auditing and Assurance Standards Board

Project Status

  • Information gathering

    IAASB approved project proposal in December 2011

  • Approving project

    Research on key audit matter reporting currently underway

  • Consulting stakeholders

    Exposure Draft issued January 2019

    Exposure Draft comment deadline is May 15, 2019.

  • Deliberating feedback
  • Final pronouncement

Meeting & event summaries


February 11, 2019

AASB Decision Summary — January 24-25, 2019

During its December 14, 2018, conference call, the AASB unanimously approved amendments to the effective date of paragraph 46 of CAS 700, Forming an Opinion and Reporting on Financial Statements. Paragraph 46 requires disclosure of the engagement partner name in the auditor’s report on financial statements of listed entities. In light of further information obtained since the December conference call, the Board decided that the amendments to the effective date of paragraph 46 will apply for one year. Therefore, paragraph 46 will not apply to audits of financial statements for periods ending before December 15, 2019, of entities whose engagement partner name appears on Form AP, Auditor Reporting of Certain Audit Participants, to be filed with the U.S. Public Company Accounting Oversight Board for that engagement.

This amendment will allow time for stakeholders to evaluate issues relating to Canadian Generally Accepted Auditing Standards auditor’s reports that are required to be filed with the U.S. Securities and Exchange Commission.

Once the Auditing and Assurance Standards Oversight Council confirms that the Board followed due process with proper regard for the public interest, the amendments will be included in a March 2019 Handbook update.

September 18, 2018

AASB Decision Summary — September 13-14, 2018

The AASB decided to amend CAS 700, Forming an Opinion and Reporting on Financial Statements. Auditors will be required 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 would be effective for periods ending on or after December 15, 2020. The Board will approve the amendments at its next meeting.

In addition, the AASB decided to develop an exposure draft to address the applicability of requirements to communicate key audit matters for investment funds and all other listed entities, including TSX-venture issuers. The Board expects to issue this exposure draft in early 2019.

News


January 31, 2019

Document for Comment

AASB Exposure Draft – Communication of Key Audit Matters in the Auditor’s Report

The AASB issued an Exposure Draft proposing revisions to CAS 700, relating to the communication of key audit matters in the auditor’s report. Stakeholders are encouraged to submit their comments by May 15, 2019.

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 ballot process.