May 2019 Update
In this Update: Ethics; Rising Revenues for SMP; Succession Planning; Compliance Reporting
Greetings,
It is ironic the standard setters are so busy yet there is nothing new to report. Over the past few months, I provided you details about exposure drafts for auditing standards (CAS 315), compilation engagements (CSRS 4200) and quality management (CSQM 1 and CSQM 2) among other technical topics. But the standard setters are still deliberating on comments received so there is no new news on any of these fronts. I will continue to track status and let you know as soon as there are developments. So, in the meantime, I have highlighted other random topics of interest I have come across. Read on…
Ethics
With the new professional development requirement to have at least four hours of verifiable PD specifically related to ethics, this subject matter is a hot topic these days. In fact I am developing an Ethics Workshop to be delivered to firms to help meet this requirement in an interesting and unique way. Feel free to contact me about delivering “Putting Ethics into Practice” to the members of your firm. While preparing this workshop I came across an article that I think may be of interest to you. “Paying Professional Ethics More than Lip Service” provides guidance on building trust in business and how to be anchored by fundamental ethical principles.
Rising Revenues for Sole Practitioners and Small Firms
As a sole practitioner or a partner of a small to mid-sized firm, it can be challenging to gather competitive information on how you are doing compared to your peers. “Rising Revenues for Sole Practitioners and Small Firms” summarizes the results of the 2019 Accounting and Bookkeeping Operations and Technology. According to the survey, 36.2% of respondents earned more than $150,000 in revenue for 2018 compared to only 31.8% in 2017. How do you compare?
Succession Planning
This past month I led a practitioner forum on the topic of human resources. It was a very interesting session with a variety of topics discussed including recruiting, retaining, compensating and motivating staff. One topic we did not cover in detail but is very important is building your team is succession planning. To secure the future succession, and success, of your firm, it is important to start with what kind of team you must create. An article from Accounting Today provides an interesting perspective on building teams and how planning for such breaks down to two categories: composition and development.
Compliance Reporting
I have included Compliance Reporting as a topic in previous months but as I have received numerous questions on this topic over the past month I thought it worthwhile raising again. Often government (such as Manitoba Housing), and other oversight, agencies will include the type of report they want issued in the agreement. However these agencies are not the standard setters and do not understand our requirements as practitioners. It is important to educate these agencies on the types of reports that can be issued. The new standards 3530 Attestation Engagement to Report on Compliance or CSAE 3531 Direct Engagement to Report on Compliance are the reports to be issued related to compliance with lease, funding or other debt agreements. These standards are effective for compliance reports dated on or after April 1, 2019. If you want a pair of fresh eyes to read your report before you release it, just reach out.
As mentioned in the introduction, I will keep you updated on technical developments as they happen. In the meantime, if you have any questions on any topic or would like further information on the Ethics Workshop, please feel free to contact me. We are headed into the time where practice inspections are taking place and it is a good time to ensure you have the right processes in place to address quality and other matters. I am here to help as needed. Have a great weekend.
Best Regards,
Kirsten S. Albo, FCPA, FCA
President
April 2019 Update
In this Update: Exposure Drafts (Quality Management & Others); Other Information (CAS 720); auditing Less Complex Entities
Greetings,
April 30. Another tax season is officially passed. Knowing how busy this month can be, I wanted to keep this update light. There has been a lot recent activity by the standard setters therefore this month’s updates includes topics I will cover in more detail in the coming months as matters become more relevant but they are important enough to bring to your attention today. Read on…
Exposure Drafts on Quality Management
An exposure draft Canadian Standards for Quality Management (CSQM 1) was issued April 5, 2019. CSQM 1, along with the new Engagement Quality Reviews (CSQM 2), will replace the existing CSQC 1. Why do you care? While there are many changes in the exposure draft which I will provide details on in the next update, the biggest change is CSQM 1 will apply to all assurance and related services including compilation engagements and agreed-upon procedures engagements. CSQC 1 never applied to these types of engagements as CSQM 1 will now. CPA Canada issued an Audit and Assurance Alert further detailing these exposure drafts and the reasons for the changes.
Other Exposure Drafts
The Audit and Assurance Board is still deliberating feedback on comments received on the Exposure Drafts for Compilation Engagements (CSRS 4200), Reporting on Controls at a Service Organization (CSAE 3416) and Identifying and Assessing the Risks of Material Misstatement (CAS 315). Exposure Drafts for Group Audits and Agreed-Upon Procedures Engagements are being drafted. Why do you care? It is important to keep up-to-date on standards. I will provide updates and the impact as these Exposure Drafts are released, re-exposed or become effective the Handbook.
Other Information (CAS 720)
As you turn your attention back to your audit engagements, it is a good time to remind yourself of the new reporting requirements related to Other Information (CAS 720). This topic is getting a lot of attention as it is not always clear what constitutes “other information”. CPA Canada issued further guidance on other information considerations as it is not always just a formal, glossy annual report put out by the organization. Why do you care? It is a subjective area which requires discussions with management and Those Charged with Governance.
Audits of Less Complex Entities (LCE)
The audit of Less Complex Entities has been a topic for discussion for both the IAASB and Canada’s AASB over the past several years; we are finally seeing results from those discussions. This past November, I participated in an outreach session hosted by the AASB to discuss the barriers to effective and efficient audits of less complex entities. I have heard many comments of the challenges faced by small to mid-sized practitioners and was able to pass these on to the AASB directly. The results of this session will be released in a Discussion Paper shortly.
In the meantime, the IAASB has released their Discussion Paper exploring how the IAASB and others could further support auditors working in increasingly evolving environments. The IAASB is asking for feedback on their paper and I plan to respond by the deadline of September 12, 2019. Why do you care? This is an important topic for practitioners who audit smaller (or less complex) clients and more efficient and effective engagements may be the final result of these discussions. It will be interesting to see what comes next.
READ IAASB DISCUSSION PAPER HERE
Lots to think about in the coming months but for now, take a breathe. Rest assured there is time to deal with all of these matters in the coming months and I am here to assist you as needed. In the meantime, enjoy the upcoming weekend.
Best Regards,
Kirsten S. Albo, FCPA, FCA
President
March 2019 Update
In this Update: CRA Tax HelpLine; Compliance Reporting Standards; CPA Manitoba’s Practitioner Forum; Standards Updates
Greetings,
The March update is being sent this first day of April, but I promise, no April Fool’s jokes within, only a few focused topics this month. For most, April is a time for heads down to work as it is a very busy month. A few critical items to be aware are included below. Read on…
Dedicated Telephone Service – CRA Tax Help for Income Tax Service Providers
CRA is continuing their Dedicated Telephone Service (DTS) for the 2018 filing season. The DTS was a three-year pilot project started last year which offers free technical help for small or medium income tax service providers. There is a very simple registration process after which you receive a telephone number and a personal telephone access code to connect with DTS. The definition of a small to medium sized firm has expanded from the prior year. This is a good service that may help you save time.
New Compliance Reporting Standards Effective Today
In addition to an audit or review report, you may be requested to report on compliance with lease agreements, funding or debt agreements or other agreements. The new standards CSAE 3530 Attestation Engagement to Report on Compliance and CSAE 3531 Direct Engagement to Report on Compliance are effective for compliance reports dated on or after April 1, 2019. CPA Canada issued an Audit and Assurance Alert about the new requirements including understanding the difference between the two types of engagements. The report has changed so it is important to ensure you have the right processes in place to ensure the right report goes out the door.
CPA Manitoba Practitioner’s Forum
CPA Manitoba’s Practitioner Forum on May 15 (5 pm-7pm) will be facilitated by none other than yours truly. This round table event series brings together CPAs in public practice to learn and discuss relevant topics. This month’s topic is related to HR. I will be leading a discussion on attracting, retaining, developing and motivating staff. The results of a provincial salary survey will also be presented to better help you understand the competitive market. Please join me if you can.
Other Standards Updates
In researching topics for this month’s update, I perused the Financial Reporting & Assurance Canada website as I always do. Nothing of significance to report back to you as of yet. The AASB boards are still deliberating comments on the various exposure drafts including Compilation Engagements, Agreed Upon Procedures, Reporting on Controls at a Service Organization and CAS 315 Identifying and Assessing the Risk of Material Misstatement. I will provide further update on all of these when issued. The only other matter of significance was information on the fact that the International Standards Board is developing an exposure draft on standards on quality control, now being referred to as Quality Management. This means the Canadian Exposure draft is to follow shortly. When issued I will provide you a summary of the impact this may have on your practice.
One last item. Don’t forget CPA dues are payable as of today and if paid after April 15, late charges will apply. You should have received a notice from your provincial CPA body as applicable. I hope the month is a good one and not too chaotic. As you work through the month, please feel free to call with any questions you may have. I am here to help you as needed. In the meantime, happy spring!!
Best Regards,
Kirsten S. Albo, FCPA, FCA
President
February 2019 Update
In this Update: Auditor Reporting Guide; Enhancing Documentation; New Review Engagement Standards; Technology
Greetings,
February is a month where work ramps up as we get busier and busier with clients. At times, it may seem easier to let things slide in order to just get things done and out the door but that approach has its cost in the end. This month topics will help you to ensure that you are meeting standards in an efficient and effective way. The links below provide you a number of resources to help you along the way, including how you may want to consider using technology in your practice. Read on…
Auditor Reporting Guide: Reporting Implications of Canadian Auditing Standards
Have you issued your first auditor’s report under the new standards yet? From a few I have talked to, it is not quite as straightforward as before and takes some time to get it right. CPA Canada has issued the 3rd edition of the Auditor Reporting Guide. This is a very good tool which provides guidance with respect to commonly occurring reporting circumstances. There are many illustrative reports for such things as going concern, qualifications to the opinion, emphasis and other matter paragraphs. I would be happy to consult with you if needed to ensure you get it right.
Enhancing Documentation
Documentation is critical in all assurance engagements. The mantra “if not documented, not done” comes up over and over again. There are simple things to keep in mind as you work through your assurance engagements files over the next few months. This short two-minute video from the Global Head of Audit Quality at Grant Thornton provides recommendations on strengthening audit quality. You may want to share this video with you staff.
Observations Regarding the New Review Engagement Standard
CSRE 2400 has been in place for a year and practitioners are now entering their second season performing engagements in accordance with the standard. CPA Canada worked with a task force of practitioners to build resources to support the effective application of the standard. In addition, they gathered observations from practice inspectors from across the country and provide reminders for practitioners in applying the standard.
Technically, Your Practice Could be Better
These days it seems that technology is top of mind whether in your personal life or in business. As practitioners it is important to keep up as the world changes. Knowing which technologies are best for your practice can be complicated, but ignoring the value technology can add to your practice carriers a heavy price in lost efficiency and opportunity. An article from AICPA addresses these issues from a financial planning practice but many of the fundamental ideas apply to practitioners.
Before sending out this monthly update, I did a quick check on the status of a number of exposure drafts including the Compilation Standard (CSRS 4200) and Assessing Risk (CAS 315). Right now the Standards Boards are deliberating feedback received so no updates as of yet. I will continue to keep you abreast of changes as they become known. In the meantime, if you have any questions on existing standards or need support, please feel free to give me a call at anytime. I am here to provide you peace of mind and save you time.
Best Regards,
Kirsten S. Albo, FCPA, FCA
President
January 2019 Update
In this Update: Managing Fee Pressures; Better Client Meetings; Learning Mindfulness
Greetings,
The start of a new year brings many things to think about. I am excited to head into 2019 and have spent the last month thinking about what I hope to accomplish over the upcoming year. With the ever changing standards, working with clients, dealing with staff, there is never a shortage of things to think about. The last few updates have been very focused on standards and while I plan to keep you updated over the coming months as things evolve, this month I thought I would pass on a few tips about managing client relationships, including fee discussions – topics that are always top of mind for those in public practice. Read on…
Three Ways to Effectively Manage Fee Pressure
As you head into busy season, the focus can sometimes be “just get the work done” but it is important to not to lose sight of fee discussions with your clients – earlier rather than later. Pressure to lower fees has consistently appeared as one of the top challenges facing small to mid-sized practices (SMPs). Members of the IFAC SMP Committee discussed fee pressures with practitioners from around the world who in turn shared their experiences, tips and best practices.
Communicating Value and Quality with Price
Another good article on addressing fee pressures. Clients often seek a better price, even when they are deeply interested in the services offered. This presents a great dilemma on which the Chairman of IFAC SMP Committee addresses. Key tips are provided to use when setting fee levels and engaging in price discussions with clients.
Five Tips for Better Client Meetings
With the ever-changing standards (including the new auditor’s report) and the requirement to have in-depth discussions with your clients, it is important that you hold meetings to provide value and gain information and not just hold a meeting for the sake of meeting. Boomer Consulting has five tips for holding better client meetings and ensuring these meetings are operating at an optimal level. They state: “You want to make sure that your team and your client understand what the purpose of each meeting is and ensure that everyone is on the same page before and after the meeting takes place”.
Why Accountants Need to Learn Mindfulness
With the upcoming busy season, it is easy to get caught up in doing the work and letting other things slip away. I enjoyed reading this article highlighting the ability of mindfulness is essential for time management, productivity and the development of the soft skills needed to succeed. The AICPA CPA Insider reminds us that as accountants we learn technology and technical skills but do not necessarily take the same amount of time improving how we communicate, how we collaborate and how we deliver our services. To grow as an advisor, we need to dedicate as much time to soft skills as we do to technical skills.
A few final short snappers. Today is the reporting deadline for CPD requirements. Don’t forget to submit your hours. As well, as you head into the next few months, remember to issue the correct auditor’s report – and ensure the wording is correct if it is the new report you are issuing. And finally, anytime you encounter an assurance or accounting issue, remember I am here to assist you as needed. But most importantly, try and stay warm!! The weather has to break soon.
Best Regards,
Kirsten S. Albo, FCPA, FCA
President