Roundtable highlights auditor reporting and audit quality

As Canada moves toward adoption of international auditor reporting standards, questions about stakeholder collaboration and implementation continue to arise.

Read about the latest in enabling more transparent auditor reporting and enhancing audit quality. Key groups attended a roundtable meeting on the topic, including:

  • senior officials from:
    • Chartered Professional Accountants of Canada (CPA Canada)
    • the Canadian Public Accountability Board (CPAB)
    • the International Auditing and Assurance Standards Board (IAASB)
  • senior audit committee members
  • auditors
  • preparers

The roundtable consisted of two separate discussions:

  • auditor reporting, including:
    • the IAASB’s new auditor reporting standards
    • how the Canadian Auditing and Assurance Standards Board (AASB) intends to adopt the standards in Canada
    • related implementation challenges for audit committees, preparers and auditors
  • audit quality related to the kinds of interactions between audit committees and their internal and external stakeholders, and specific actions that might help them in this respect

AUDITOR REPORTING: KEY REFLECTIONS THAT EMERGED:

  • the importance for Canada to know whether and how the U.S. will implement new auditor reporting standards, particularly for dual-listed companies that will be exposed to two reporting frameworks
  • the importance of recognizing the critical role audit committees will play in supporting the objectives of the new auditor’s report, and whether there is a need to enhance the audit committee’s public reporting of its activities
  • current uncertainty around whether Canadian investors are calling for greater transparency about the audit, a factor that will have a big impact on success of the standards implementation
  • the importance of key parties in Canada working together to develop an audit quality reporting approach that will be accretive and valuable, and not solely driven by regulations

AUDIT QUALITY

The IAASB chair presented an overview of their audit quality framework and the activities in its current work plan that focus on enhancing audit quality. Discussion papers will be issued by the IAASB over the coming months in key areas where it believes audit quality can be enhanced, including professional skepticism and quality control.

CPA Canada also provided an overview of a new project building on the momentum gained from the enhancing audit quality initiative involving CPAB and the Institute of Corporate Directors. This project will explore means for auditors to provide insights arising from the financial statement audit that might help the audit committee fulfil its responsibilities, and enhance audit quality. Consultations with directors will take place in fall 2015 to build on preliminary work already undertaken in this area.

IMMEDIATE NEXT STEP

The AASB requests your comments on the implementation considerations for new auditor reporting standards.

The AASB has issued an Invitation to Comment that seeks input on proposed effective dates and other considerations relating to the implementation of the new auditor reporting standards.

Stakeholders are encouraged to respond to the AASB’s Invitation to Comment, which has a comment deadline of February 5, 2016 (recently extended from October 30, 2015).

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