Canadian Standards on Quality Management

Quality Management

Summary

Auditors must effectively manage audit quality, both at the firm and the engagement level, with high-quality audits supporting financial stability.

Staff Contact(s)

Jacqui Kuypers, CPA, CA Principal, Auditing and Assurance Standards Board

+1 416 204 3445

[email protected]

Project Status

Information gathering

Completed prior to 2016
Approving project

The IAASB approved the project in December 2016
Consulting stakeholders

Case study workshop completed by small and medium-sized practitioners and sole practitioners August 2020

Consultations on Conforming Amendments Exposure Draft completed September 2021
Deliberating feedback

Feedback considered and AASB response letters developed on the IAASB Exposure Drafts

AASB deliberating feedback received on Conforming Amendments Exposure Draft
Final pronouncement

AASB approved final Canadian Standard on Quality Management (CSQM 1), Quality Management for Firms that Perform Audit or Review Engagements, or Other Assurance or Related Services Engagements, CSQM 2, Engagement Quality Reviews, and CAS 220, Quality Management for an Audit of Financial Statements in January 2021

AASB approved final revisions to Other Canadian Standards in March 2022

Final Handbook material now available in the CPA Canada Handbook – Assurance

Handbook

News

August 2, 2022 International Activity, Resource, Guidance

IAASB Quality Management Implementation Resources

The IAASB has issued several resources to assist practitioners in the first-time implementation of new and revised quality management standards. These include guides for ISQM 1, ISQM 2 and ISA 220 (Revised), and a definition of an engagement team fact sheet. Refer to the IAASB’s focus area web page for these and other resources.

August 2, 2022 International Activity, Resource, Other

IFAC Quality Management Panel Discussion

Learn more about the IAASB’s new and revised quality management standards with two on-demand video panel discussions. The International Federation of Accountants created the video panel discussion to support implementation by small and medium-sized practices. The discussions aim to help practitioners design their systems of quality management as Canada adopts the International standards.

July 5, 2021 Document for Comment

AASB Exposure Draft – Quality Management – Conforming Amendments to Other Canadian Standards

The AASB issued an Exposure Draft proposing conforming amendments to Other Canadian Standards to avoid inconsistencies with the new and revised quality management standards. Submit your comments by September 30, 2021.

Meeting & event summaries

June 27, 2022 AASB Decision Summary – June 6-7 2022

The AASB discussed a letter received from one of its stakeholders regarding Canadian Standard on Quality Management (CSQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements. The standard is effective for audits and reviews of financial statements and other assurance engagements as of December 15, 2022.

The stakeholder asked the AASB to consider deferring the effective date, citing several reasons.

The AASB acknowledged and understood the implementation challenges its stakeholder raised. After a thorough discussion, however, the Board concluded that deferring the effective date of CSQM 1 would not be in the public interest. The Board and staff will continue to engage with and support those responsible for developing standards implementation guidance, tools, and training to explore what more can be done to support the implementation of CSQM 1.

April 12, 2022 AASB Decision Summary – March 7-8, 2022

The AASB approved quality management conforming amendments to Other Canadian Standards (OCSs). Two members voted against the conforming amendments.

The AASB unanimously agreed that re-exposing the conforming amendments is not necessary because changes were made in response to comments raised on exposure.

The conforming amendments to the OCSs are effective as follows:

For periods beginning on or after December 15, 2022:
- Canadian Standard on Assurance Engagements (CSAE) 3000, Attestation Engagements Other than Audits or Reviews of Historical Financial Information
- CSAE 3001, Direct Engagements
- CSAE 3410, Assurance Engagements on Greenhouse Gas Statements
- Canadian Standard on Review Engagements (CSRE) 2400, Engagements to Review Historical Financial Statements
- Canadian Standard on Association (CSOA) 5000, Use of the Practitioner’s Communication or Name
- Section 5925, An Audit of Internal Control over Financial Reporting That Is Integrated with an Audit Of Financial Statements
- Section 7060, Auditor Review of Interim Financial Statements
For engagements beginning on or after December 15, 2022:
- CSAE 3416, Reporting on Controls at a Service Organization Relevant to User Entities’ Internal Control Over Financial Reporting
- CSAE 3530, Attestation Engagements to Report on Compliance
- CSAE 3531, Direct Engagements to Report on Compliance
- Canadian Standard on Related Services (CSRS) 4460, Reports on Supplementary Matters Arising from an Audit or a Review Engagement
- Section 7200, Auditor Assistance to Underwriters And Others
- Section 7600, Reports on the Application Of Accounting Principles
- Assurance and Related Services Guideline (AuG) 6, Examination of a Financial Forecast or Projection Included in a Prospectus or Other Public Offering Document
- AuG-50, Conducting a Performance Audit in the Public Sector in Accordance with CSAE 3001
For auditor’s consent to the use of the auditor’s report on financial statements for periods beginning on or after December 15, 2022:
- Section 7150, Auditor’s Consent to the Use of a Report of the Auditor Included in an Offering Document
- Section 7170, Auditor’s Consent to the Use of the Auditor’s Report in Connection with a Designated Document
For periods beginning on or after December 15, 2023:
- CSRS 4200, Compilation Engagements
- CSRS 4400, Agreed-upon Procedures Engagements

Once the Auditing and Assurance Standards Oversight Council (AASOC) confirms that the AASB followed due process with proper regard for the public interest, the conforming amendments to OCSs will be issued in the CPA Canada Handbook – Assurance in May 2022.

February 8, 2022 AASB Decision Summary – January 20-21, 2022

The AASB discussed issues related to the proposed conforming amendments to Other Canadian Standards set out in the Exposure Draft, “Quality Management – Conforming Amendments to Other Canadian Standards.”

The AASB is expected to approve the final conforming amendments at an upcoming meeting.

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.