Invitation to comment on new auditor reporting standards

The AASB intends to adopt new auditor reporting standards issued by the IAASB as CASs. The AASB will take into account comments received on its Invitation to Comment in finalizing its decision.

The International Auditing and Assurance Standards Board (IAASB) issued the auditor reporting International Standards on Auditing (ISAs) in January 2015, resulting in significant changes. The Auditing and Assurance Standards Board (AASB) has tentatively decided that the Canadian Auditing Standards (CASs) should have a later effective date than that of the corresponding ISAs. Stakeholders are asked to provide input on these and other related considerations affecting implementation of the new auditor reporting standards.

CANADIAN IMPLEMENTATION CONSIDERATIONS

The AASB identified the following challenges that affect the implementation of the new auditor reporting standards:

  • the large number of Canadian listed entities
  • the large number of Canadian listed entities also listed in the United States
  • determining which Canadian entities will fall within the scope of key audit matters reporting requirements (a new section to communicate those matters that were of most significance in the audit)

The AASB has tentatively concluded, after considering input from various stakeholders, that it is necessary to develop an effective date for the new auditor reporting standards that takes into account the implementation considerations. The AASB considers there is a need for a deferral of the effective date for all entities and, further, with respect to key audit matters reporting, there should be a staged implementation.

COMMENTS REQUESTED

The AASB would welcome views on the following questions:

  1. Do the effective dates provide enough time for stakeholders to implement the new auditor reporting standards?
  2. Will the staged implementation of CAS 701 address concerns about the ability for auditors, preparers and audit committees of listed entities to implement key audit matters reporting appropriately?
  3. Do you agree that TSX-listed entities are the appropriate cut-off point for the staged implementation?
  4. Are there any types of entities not listed on a recognized stock exchange that you believe should be considered to be listed entities within the definition in the new auditor reporting standards?
  5. Are there any unintended consequences of the AASB’s interpretation of the definition of listed entity?

The deadline for providing your comments to the AASB on the above is October 30, 2015.

The AASB expects that the final standards will be issued in the first half of 2016 to permit their use for 2017 calendar year-end audits.

Visit the project page at the Financial Reporting & Assurance Standards Canada site for further details and to comment. Stay informed with my Audit Quality Blog, designed to create an exchange of ideas on global audit quality developments and issues, and their impact in Canada.

Follow me @erturner241 and follow us @FRASCanada.

About the Author

Eric Turner, CPA, CA

Director, Auditing and Assurance Standards, CPA Canada

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