January 2022 Update
Greetings,
The first newsletter of 2022. I am so excited about the upcoming year – and know it will be a busy one as there is much to think about. The official implementation of CSRS 4200, updating audit template files for CAS 315, implementing your system of quality management in accordance with CSQM 1. But don’t worry, I will be here for you every step of the way helping you save time and achieve peace of mind. It is best to take things one step at a time and break things down into manageable chunks. With that in mind, preparing for the upcoming season is the focus of this month’s update. Read on…
January Effective Dates
January 1, 2022 is a kick off date for many accounting and assurance standards. Make sure you are prepared and are addressing about the following over the next few months … these are a start, more to focus on in the coming months. Check out the topics that are relevant to you.
Assurance standards
- Compilation Engagements (CSRS 4200) (CSRS 4200 IMPLEMENTATION GUIDE)
- Agreed Upon Procedures CSRS 4400 (SEE NEXT TOPIC)
- Auditing Estimates (CAS 540 was actually effective last year but seems have been overlooked by many) (CPA CANADA CAS 540 FAQs)
Accounting standards
- ROMRS (Section 3856) (CPA CANADA ASPE BRIEFING ROMRS)
- Related party financial instrument transactions (CPA CANADA ASPE ALERT RPT)
- Investments (Section 3051) (CPA Canada ASPE BRIEFING INVESTMENTS)
Agreed Upon Procedures Engagements (CSRS 4400)
CSRS 4400 AUP Engagements is now effective – ensure you are following the new requirements. An AUP is a great way to meet your clients needs in a unique way as it involves a practitioner performing the procedures that have been agreed upon by the yourself and the engaging party.
Key features of an AUP engagement are:
- You and your client decide on the procedures to be performed. This is unlike an assurance agreement where you determines what is necessary to obtain assurance.
- The agreed-upon procedures performed and the related findings are communicated in a AUP report.
The report simply reports findings and exceptions, if any. No assurance is provided and neither is a conclusion nor opinion expressed.
It is the users themselves who consider the agreed-upon procedures and findings reported and draw their own conclusions from the work performed.
These types of engagements can be a great tool in servicing the needs of your client. There are many benefits to this type of engagement including the fact an AUP engagements offers flexibility, as the service can be tailored to different circumstances and focused on individual items of financial or non-financial subject matters. TO LEARN MORE READ IFAC ARTICLE ON AUP ENGAGEMENTS
PEG Update
I have no update. 🤣
We have not yet seen the updated PEG. The main changes we are expecting relate to Revised CAS 315 which has an effective date of periods beginning on or after December 15, 2021. That is basically December 31, 2022. There will be lots of planning this summer so stay tuned. I will send out a special update when released.
Focus on Practice Review Results
As a firm in public practice, you are subject to practice inspections. It is fact of life. This is the time of year when each province issues their summary report of all findings throughout the year. It is definitely worth your time to read the summary report as when you understand the challenges others face, you can strengthen your own files and avoid comments when it comes time to your practice inspection.
This link is to CPA ALBERTA’S FOCUS ON PRACTICE REVIEW report but I know that all the provinces collaborate in issuing the reports so one province is representative of the next. Not all provinces have issued their reports but they are expected in the coming days so feel free to read this one in the meantime.
Also, check out #ASKKSAProTips on minimizing practice inspection comments in your engagements. While you are there, follow the ASK KSA LinkedIn page for other #ASKKSAProTips.
Start the Year Off Right - Getting Organized
Every January I take the opportunity to kick things off and get organized. I find it a good way to start the year and helps me face the next few months with renewed energy. The management experts at Sling have very PRACTICAL, SIMPLE AND HELPFUL TIPS on streamlining your work life in no time.
Tips #2 on Avoiding Multitasking and #7 on Silencing my Phone really spoke to me. What tips help you?
The Art of Professional Skepticism
The exercise of professional skepticism in the current environment is now more important than ever. As you start performing engagements for the upcoming year, it is critical to ask the right questions, remain alert to matters that may indicate error and/or fraud and critically assess evidence.
I often get asked, I understand the concept but I do I actually incorporate professional skepticism into my engagements? How do I help my staff develop the questioning mindset?
Actions you can take to build professional skepticism include:
- Develop your self-confidence and have faith in yourself to be able to ask the right questions
- Be aware of judgment biases and do not let these influence your questions
- Consider all aspects of an issue, not just the first one you hear
- Resist the temptation to just accept the easy answer
- Never ignore contradictory evidence, rather follow up until you are satisfied with the answer, and you are not satisfied, ask more questions
CPA Australia and NZ has an excellent article on building your professional skepticism skills. They also include five guides that are excellent training tools for staff to help them have the right mindset. The guides include THE ART OF PROBLEM SOLVING AND THE ART OF INQUIRY .
Be Prepared: Effective and Efficient Engagements
Check out these ASK KSA PD course offerings that will not only help you be more effective and efficient but will also help you get a head start on your 2022 CPD requirements. Course topics will help you strengthen both your technical skills and soft skills.
January 31 is an important date as it is the the deadline for commenting on the IAASB exposure draft on the Audits of Less Complex Entities. Talk about exciting. I submitted my response yesterday (22 pages!!) to express my views on the proposed standard. If you are so inclined you can check out an OVERVIEW OF MY RESPONSE I posted on LinkedIn. There are many changes yet to be made before I would recommend adoption of the proposed standard. But . . . there is hope.
As I said in my opening remarks, this will be a busy year. I am ready, and looking forward to it. The alternative is being bored, and who wants that? Reach out at anytime with any questions you may have. I am here to help you save time and achieve peace of mind.
Best regards,
Kirsten S. Albo, FCPA, FCA