As I kick off the first newsletter of 2024, I extend my warmest greetings to each one of you. And there are a lot of you… this monthly update goes out to +1500 recipients. I never dreamed back in 2016 that this update would grow so big. I am grateful to be able to do what I do and I thank you.
There is a lot on the horizon with the advent of the new year. Public practice continues to be a very dynamic landscape to operate in. Some standards are now effective, with imminent updates to existing standards and forthcoming changes to others. My steadfast commitment remains to provide you with timely insights and practical strategies to navigate through it all and to help you conduct effective and efficient engagements. Read on…
LCE Standard Update
Perhaps the biggest auditing news, for some, is that the IAASB Standard on Audits of Less Complex Entities (LCEs) was approved on December 6, 2023. The IAASB believes this highly anticipated standard, built on the foundation of the International Standards on Auditing (ISAs) is proportionate and tailored to the specific needs of an audit of less complex entities.
The reason that I say, for some, is that while for some jurisdictions in the world, the LCE standard will make a difference, here in Canada I am not so sure… And that has been the ongoing story for some time. The Exposure Draft was issued back in 2021 and from that time many respondents raised concerns the ED did not go far enough in easing the challenges faced by SMPs in auditing LCEs. ASK KSA (me, lol) sent in a 15-page response that outlined how, in my opinion, the ED left many pain points faced by auditors unaddressed. While some things changed between the ED and the final standard, they were minor.
As the LCE standard is not an ISA, it does not have to be adopted in Canada. Now that we have the final standard, the big question is what is the path forward in Canada? Our AASB Advisory Group on LCE continues to raise concerns about the standard and its approach. My personal opinion is that Canada should not adopt the LCE Standard. The reason for this is the pain points in auditing still exist as the standard includes substantially all the CAS requirements and there are too many challenges for auditors to keep up with the existing standards let alone adding a new separate standard. The other reason is that while the LCE standard is based on current auditing standards there will be divergence in the future which creates even more disparity in the market.
The goal of the AASB is to decide in spring 2024 as to the next steps. I fully believe there is a right path forward in Canada. The new IAASB LCE Standard is just not it. Stay tuned as the story unfolds.
Here are two links that may be of interest to you in learning more…
Accounting for Life Insurance Contracts with Cash Surrender Value
In November 2023, the Accounting Standards Board (AcSB) issued the Exposure Draft new Accounting Accounting for Life Insurance Contracts with Cash Surrender Value, which would address accounting for life insurance contracts that contain a cash surrender value component from the policy owner’s point of view. This new standard would replace AcG-21 and apply to both ASPE and ASNPO accounting frameworks. The comment period closes January 31, 2023… today!!!
CSQM 1 Implementation
The effective date for the design and implementation of your firm’s system of quality management has come and gone for both firms that provide assurance services and those that provide compilation services only (December 15, 2022, and December 15, 2023, respectively). By now, your firm should have designed and implemented its system of quality management. The evaluation of your system of quality management is to be performed within a year, that is by December 15, 2023, and December 15, 2024.
Many firms are still navigating the CSQM 1 journey. They are not alone, firms are still working on becoming compliant. In November 2023 I wrote two articles for the Canadian Accountant digital online magazine which may help you if you are still trying to figure it all out. The first provided a detailed overview of the risk assessment process and the second provided information on the monitoring and remediation process. If you are feeling overwhelmed and need help, I have another Path to Implementation Workshop on February 20… details below.
ARTICLE ONE: RISK ASSESSMENT PROCESS
ARTICLE TWO: MONITORING AND REMEDIATION PROCESS
Can Socializing Really be your Career Secret Weapon?
Whether you’re a social butterfly or consider chit-chat a necessary evil, social connections with colleagues can help you build relationships. While the shift to hybrid work has had many benefits, it has also reduced everyday social interactions between colleagues. There are fewer opportunities for casual corridor chats, grabbing a coffee or a bite to eat, or attending after-work events. This helpful article addresses why socializing is good for a career. And, while the focus in the article is connecting with colleagues, many of the tips provided also apply to connecting with clients. A critical aspect of being in public practice.
READ ARTICLE HERE
Baseline Cyber Security Controls for Small to Mid-Sized Organizations
Revised CAS 315 enhances the auditor’s requirements to understand the client’s IT environment. And while we need to meet the requirements of the standard, it is an excellent opportunity to have business conversations with our clients and build relationships. Often, small to mid-sized organizations don’t think about cyber security but in today’s environment, they should.
The Canadian Centre for Cyber Security has an excellent report in which they present the baseline cyber security controls and apply the 80/20 rule (achieve 80% of the benefit from 20% of the effort) to the cyber security practices of small and medium organizations in Canada.
Your Quest for CSQM 1 Implementation Guidance Ends Here!!!
If you haven’t implemented the requirements of CSQM 1 and are stilll searching for next steps to implement the standard, look no further. I’ve got you.
Implementing CSQM 1 is much more than drafting a new manual. Missed the deadline? It is not too late to get back on track.
I have one more CSQM 1 Path to Implementation Workshop scheduled for February 20, 2024. A completely “done with you” approach to get your Firm in compliance with CSQM 1 requirements easily and quickly.
You’ll get done what would have taken you 100+ hours to accomplish. Using SQMT, you are able to design and implement your system of quality management in ONE DAY. And… I am there with you every step of the way. No need to figure it all out on your own.
CHECK OUT WORKSHOP DETAILS AND REGISTER HERE
CPD Reporting Deadlines
A reminder to gather your CPD information from 2023 as each provincial reporting deadlines are drawing close. If you haven’t already, you can expect an email from your provincial body outlining details of the CPD reporting requirements.
And… if you want to get a jump on your 2024 CPD hours, CHECK OUT ASK KSA CURRENT ONLINE ON-DEMAND CDP OFFERINGS HERE
As we embark on this new year, I am excited about enthusiasm for the journey ahead. It promises to be an exhilarating year filled with growth, changes and accomplishments. As your dedicated partner, I am committed to keeping you informed and empowered every step of the way. Through my monthly newsletters, I will provide valuable insights and updates to ensure you remain well-informed, saving you time and helping you achieve peace of mind.
Remember, I am always here to support you in any way I can. Whether you have questions, need assistance, or simply want to brainstorm ideas, please don’t hesitate to reach out. Your success is my priority, and I am here to ensure that you have the guidance and resources you need to thrive. Together, let’s make this year a resounding success.
Kirsten S. Albo, FCPA, FCA