Stay informed of changes to the selected Canadian assurance and other related services’ standards including webinars, training courses and relevant guidance and resources from standard setting boards.
- Revised Standard – Audits of Group Financial Statements (Including the Work of Component Auditors)
- Revised Standard – Identifying and Assessing the Risks of Material Misstatement
- Revised Standard – Forming an Opinion and Reporting on Financial Statements
- New Standard – Compilation Engagements
- New and Revised Standards – Quality Management
- New Standard – Agreed-upon Procedures
- Revised Joint Policy Statement - Concerning Communications between Actuaries Involved in the Preparation of Financial Statements and Auditors
- Exposure Draft – Sustainability Assurance
- Exposure Draft – Going Concern
- Exposure Draft – Audit Evidence
- Exposure Draft and Discussion Paper – Less Complex Entities
- Exposure Draft – Proposed Narrow-scope Amendments to CAS 700, Forming an Opinion and Reporting on Financial Statements, and CAS 260, Communication with Those Charged with Governance, as a Result of the Revisions to the IESBA Code that Require a Firm to Publicly Disclose When a Firm Has Applied the Independence Requirements for Public Interest Entities
- New Project – Compilation of Future-oriented Financial Information
Page last updated on 08/03/23
Revised standard – audits of group financial statements (including the work of component auditors)
The AASB revised CAS 600 to include a more robust risk-based approach to planning and performing a group audit. The revised standard provides detailed guidance for group and component auditors when conducting a group audit.
Effective for audits of group financial statements for periods beginning on or after December 15, 2023, with earlier application permitted.
Revised standard – identifying and assessing the risks of material misstatement
The AASB revised a standard (CAS 315) to include enhancements and clarifications to help auditors in applying the audit risk model when identifying and assessing the risks of material misstatement.
Key revisions include:
- clarifying that the risk assessment process provides the basis for identification and assessment of the risks of material misstatement (whether due to fraud or error, at the financial statement and assertion levels), and provides an appropriate basis for the design of further audit procedures
- providing scalability considerations for less complex entities
- strengthening documentation requirements (e.g.: the exercise of professional skepticism)
- providing considerations for using automated tools and techniques
Effective for audits of financial statements for periods beginning on or after December 15, 2021.
Revised standard – forming an opinion and reporting on financial statements
The AASB revised CAS 700 scoping in requirements to communicate key audit matters for general purpose financial statements of other listed entities (i.e.: NEO, CSE and TSX-V). Entities that are required to comply with the investment fund continuous disclosure (National Instrument 81-106) are excluded from this requirement.
Effective for periods ending on or after December 15, 2022.
New standard – compilation engagements
The AASB issued a new compilation engagement standard (CSRS 4200) replacing the existing compilation standard (Section 9200 and AuG-5).
Key changes include a new:
- report which clearly communicates the respective responsibilities of management and the practitioner, and the nature and scope of a compilation engagement
- requirement to include a note in the compiled financial information that describes the basis of accounting applied in the preparation of the compiled financial information.
Effective for compiled financial information for periods ending on or after December 14, 2021, with early application permitted.
New and revised standards – quality management
The AASB issued two new standards, quality management for firms (CSQM 1) and engagement quality reviews (CSQM 2), replacing the existing standard, CSQC 1. CSQMs largely mirror the international quality management standards (ISQM 1 and ISQM 2).
The AASB also issued conforming amendments to Other Canadian Standards to avoid inconsistencies with the new and revised quality management standards.
CSQMs will apply to both assurance and related service (i.e., non-assurance) engagements. This is a significant change from CSQC 1, which only scopes in assurance engagements.
The AASB also proposed revisions to the standard on quality management for an audit of financial statements (CAS 220) to clarify and strengthen the key elements of quality management at the engagement level.
CSQM 1 and 2 are effective for audits or reviews of financial statements or other assurance engagements as of December 15, 2022; and effective for related services engagements as of December 15, 2023.
CAS 220 (Revised) is effective for audits of financial statements for periods beginning on or after December 15, 2022.
The conforming amendments will be effective on or after December 15, 2022 except the amendments to thecompilation (CSRS 4200) and agreed upon procedures (CSRS 4400) standards, which will be effective for periods beginning on or after December 15, 2023.
New standard – agreed-upon procedures
The AASB issued a new standard (CSRS 4400) replacing the existing standard (Section 9100). CSRS 4400 applies to engagements on both financial (e.g.: revenues for determining royalties) and non-financial (e.g.: volume of greenhouse gas emissions) information. The current standard applies only to financial information.
CSRS 4400 clarifies the practitioner’s responsibilities in relation to the various parties involved in an agreed-upon procedures engagement (AUP) and provides guidance on how a practitioner’s expert can assist the practitioner in an AUP engagement.
Unlike the current standard, CSRS 4400 does not have a precondition for the practitioner to be independent. However, the practitioner is required to state in the report whether there is a requirement to comply with independence and, if so, include the relevant requirements.
Effective for agreed-upon procedures engagements for which the terms of engagement are agreed on or after January 1, 2022.
Revised joint policy statement - concerning communications between actuaries involved in the preparation of financial statements and auditors
On February 1, 2023, the AASB announced that the revised Joint Policy Statement (JPS), effective for communications between the auditor and the actuary involved in the preparation of financial statements that are initiated on or after March 31, 2023, has been approved by both the Canadian Actuarial Standards Board and by the AASB. Early application is permitted.
The purpose of the JPS is to facilitate effective communication between an auditor and an actuary as the two professionals conduct their respective engagement relating to the entity’s financial statements. This JPS sets out the process for:
- communications between an actuary involved in the preparation of financial statements and an auditor, regarding their respective responsibilities
- how the actuary and auditor would interact in carrying out their respective responsibilities
- how their respective responsibilities may be disclosed to readers of financial statements
The JPS has been appended to CAS 500, Audit Evidence.
Exposure draft – Sustainability Assurance
The IAASB issued an exposure draft for International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements that will:
- Serve as a comprehensive, stand-alone standard suitable for any sustainability assurance engagements.
- Apply to both limited and reasonable assurance engagements.
- Apply to sustainability information reported across any sustainability topic and prepared under multiple frameworks, including the recently released IFRS Sustainability Disclosure Standards S1 and S2.
- Serve as a profession agnostic standard that can be used by both professional accountant and non-accountant assurance practitioners.
Comments are requested by December 1, 2023.
Exposure draft – going concern
The IAASB issued an exposure draft proposing the following changes to International Auditing Standard (ISA) 570, Going Concern, aiming to:
- Promote consistent practice and behavior and facilitate effective responses to identified risks of material misstatement related to going concern.
- Strengthen the auditor’s evaluation of management’s assessment of going concern, including reinforcing the importance, throughout the audit, of the appropriate exercise of professional skepticism.
- Enhance transparency with respect to the auditor’s responsibilities and work related to going concern where appropriate, including strengthening communications and reporting requirements.
The Comment period for the IAASB exposure draft is closed.
The AASB has also issued an exposure draft on proposed amendments to CAS 570. The Comment period for the AASB’s exposure draft is closed.
Exposure draft – audit evidence
The AASB issued an exposure draft proposing the following changes to Canadian Standard on Auditing (CAS) 500, Audit Evidence:
- Clarifying CAS 500’s purpose and scope and explain its relationship with other standards.
- Providing a principles-based approach to considering and making judgments about information intended to be used as audit evidence and evaluating whether sufficient appropriate audit evidence has been obtained.
- Modernizing CAS 500 to be adaptable to the current business and audit environment, while considering scalability for different circumstances, including the entity and the auditor’s use of technology (e.g.: automated tools and techniques).
- Emphasizing the role of professional skepticism when making judgments about information intended to be used as audit evidence and evaluating the audit evidence obtained.
The AASB’s exposure draft on CAS 500 is based on the IAASB’s recently issued exposure draft proposing changes to International Standard on Auditing (ISA) 500 (Revised), Audit Evidence. The AASB is not proposing any Canadian amendments to ISA 500 (Revised).
Comments to the AASB and the IAASB are now closed. The IAASB is considering feedback received on its exposure draft.
Exposure draft and discussion paper – less complex entities
The IAASB issued an exposure draft (ED) proposing a new standalone standard on auditing the financial statements of less complex entities (LCEs). This is to address some of the feedback received in the application of the auditing standards to the audits of LCEs.
In consideration of this, the AASB issued a discussion paper to obtain input on different options that might be explored in Canada in the audits of LCEs.
On September 13, 2022 the AASB provided an update on its progress to finding a solution for practitioners in applying Canadian Auditing Standards to audits of less complex entities.
On January 24, 2023, the IAASB opened the public consultation for a group audit-specific section of the proposed auditing standard for LCEs. The proposed section, Part 10, Audits of Group Financial Statements, is intended to form part of the proposed ISA for LCEs when finalized. Group audits were not included in the scope of the original Exposure Draft of the ISA for LCE. However, given stakeholder feedback, the IAASB reconsidered its decision to exclude group audits and developed proposals that address audits of less complex groups. On May 1, 2023, the AASB issued a comment letter responding to the IAASB’s Exposure Draft, Proposed Part 10, Audits of Group Financial Statements of the Proposed ISA for Audits of Financial Statements of Less Complex Entities.
The IAASB is expected to discuss the full draft of the proposed LCE standard and vote on its final approval at its September 2023 meeting.
Exposure Draft – Proposed narrow-scope amendments to CAS 700, forming an opinion and reporting on financial statements, and CAS 260, communication with those charged with governance
The AASB issued an exposure draft (ED) proposing that CAS 700 and CAS 260 be revised, with Canadian amendments, corresponding to the IAASB’s proposed narrow-scope revisions to ISA 700 and ISA 260. The IAASB is proposing these revisions in response to the recent revisions to the International Ethics Standards Board for Accountants’ (IESBA) Code, which included revisions to the definitions of public interest entity and listed entity.
The AASB reviewed the IAASB’s proposed revisions and is proposing to make the same revisions to the corresponding Canadian Auditing Standards, except for the revisions to the illustrative reports in ISA 700. The AASB proposes to retain the existing illustrative reports in CAS 700, which requires identification of the jurisdiction or origin of the relevant ethical requirements.
The comment period is closed. Awaiting final amendments to the standards.
New project – Compilation of Future-oriented Financial Information
The AASB approved a new project replacing AuG-16, Compilation of a Financial Forecast or Projection, with a new standard. This is required because of the inconsistencies in reporting and performance requirements between AuG-16 and the new compilation engagement standard (CSRS 4200).
The Future-oriented Financial Information Task Force is currently deliberating issues while seeking input from the Reference Group. It is anticipated that an exposure draft will be approved in October 2023.
Additional non-authoritative guidance and complimentary webinar/training
To stay ahead of the curve, find additional non-authoritative guidance to help you navigate the application of assurance and other Canadian standards.
- PCAOB Report: Audits with Deficiencies Rose for Second Year in Row to 40% in 2022 (PCAOB, 2023)
- Applying IESBA Code of Ethics' Conceptual Framework to Independence: Practical Guidance for Auditors In Technology-related Scenarios (IESBA and APESB, 2023)
- CPAB audit risk alert – Use of artificial intelligence applications in the audit (CPAB, 2023)
- CPAB disclosures project update (CPAB, 2023)
- U.K. Regulator sees improvement at biggest audit firms (FRC, 2023)
- PCAOB Offers Advice for Audit Committees on Risks (PCOAB, 2023)
- Audit Committee Chairs’ views on and approach to ESG Activities and Reporting (FRC, 2023)
- A Deep Dive into Sustainability Assurance Engagements (IFAC, 2023)
- Proposal Amending PCAOB’s Auditing Standards related to a Company’s Noncompliance with Laws and Regulations Issued to Deter Fraud (PCAOB, 2023)
- Key questions for audit committees overseeing sustainability related disclosure (IFAC, 2023)
- Corporate decision-making: Why choose a CPA for your ESG assurance needs? (The Centre for Audit Quality, 2023)
- PCAOB issues publication on the importance of professional competence and skepticism in performing quality audits (PCAOB, 2023)
- Finding the right related services or assurance engagement (CPA Canada, 2023)
- CPAB’s Regulatory Oversight Report: 2022 Annual Inspections Results (CPAB, 2023)
- PCAOB inspectors plan to prioritize fraud, crypto, financial sector (PCAOB, 2023)
- COSO releases internal control guidance for sustainability reporting (COSO, 2023)
- The Role of the Auditor in Climate-Related Information (The Centre for Audit Quality, 2023)
- SEC Chief Accountant Releases Statement on the Responsibilities of Lead Auditors When Other Auditors Are Involved (SEC, 2023)
- IFAC publishes sustainability disclosure and assurance benchmarking study for trends and analysis from 2019 to 2021 (IFAC, 2023)
- Technology FAQs on investigating exceptions and relevance of performance materiality when using automated tools and techniques (IAASB, 2023)
- FAQ (Auditing crypto assets): Auditing mining revenue of entities engaged in crypto-asset mining (CPA Canada, 2022)
- The data driven audit: AI and automation’s impact on audit and auditor’s roles (CPA Canada, 2022)
- Auditing in the Crypto Asset Sector (CPAB, 2022)
- Audit and Assurance Summary Resource Guide (CPA Canada, 2022)
- Practitioner’s pulse (May 2022): Technology in the audit (CPA Canada, 2022)
- Technology’s Impact on the Audit (CPA Canada, 2022)
- Election Guidance: Attention CFOs, Official Agents, and Auditors of Election Candidates (CPA Ontario, 2020)
- Practitioner Alert: Comparing Compliance Engagements (CPA Canada, 2022)
- Guide for practitioners: Roadmap to the CPA Canada Handbook - Assurance Tool (CPA Canada, 2021)
- Understanding assurance needs: A framework for the decision-maker (CPA Canada, 2021)
- Reporting implications of Canadian Auditing Standards (CPA Canada, 2019)
The COVID-19 pandemic continues to significantly impact Canadian organizations. Find relevant information on the application of assurance standards during the global pandemic and its impact on the profession.
- AASB COVID-19 resources (AASB, 2021)
- IAASB guidance for auditors during coronavirus pandemic(IAASB, 2021)
- Common inspection findings when auditing accounting estimates (CPAB, 2021)
- COVID-19 key audit considerations and resources (CPA Canada, 2021)
- CPAB Audit Quality Insights Report: 2021 Interim Inspections Results (CPAB, 2021)
- CPAB COVID-19 audit considerations and insights (CPAB, 2021)
- CSA COVID-19 updates (CSA, 2021)
- Key findings of the FRC's review of the viability and going concern disclosures included in certain annual reports (PDF) (FRC, 2021)
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