July 2021 Update

Greetings,
The theme of this month’s update is change. Whether that be standards, your clients, your firm or the general economic environment, nothing stays the same. Summer is a time to reflect on where you have been but more importantly, where you are headed. Seth Godin said “Change almost never fails because it is too early, it almost fails because it is too late”. What should change for your business? Read on…

Exposure Draft – Auditing Less Complex Entities

Talk about change!!! This is truly an exciting time in our profession. This month, the IAASB issued an exposure draft related to auditing the financial statements of less complex entities (LCEs). One auditing standard for these audits!! Incredible. Or is it? I have read the exposure draft in detail and provided comments before it was issued through my participation on the AASB Advisory Group on Audits of LCEs.

My opinion that while this exposure draft is a great start, it does not go far enough in minimizing the pain points auditors encounter when auditing their smaller, less complex clients. For example, journal entry testing, the bane of my existence, is still required. I believe there is more we can do to help SMPs be efficient and save time while still performing a quality audit that provides reasonable assurance.

The AASB will be issuing a discussion paper in September to obtain more input from stakeholders. Our AG believes we need more input before making a decision from a Canadian perspective. I will be hosting a number of webinars once the discussion paper has been issued to provide more information about the exposure draft and what is means to our profession. I will also be gathering your views to bring them back to the Advisory Group. As the discussion paper will refer to the exposure draft, it may be helpful to read it now and start forming your views.

Stay tuned for details on the discussion paper and ASK KSA information webinars; in the meantime, check out the exposure draft. What do you think of it? What is good? What needs to change? Has it gone far enough? I would love to hear from you on this very important topic.

READ THE IAASB LCE EXPOSURE DRAFT ON THE AUDIT OF LCEs HERE

Reminder: CSRS 4200 Effective Soon

There are many upcoming standard changes but none more imminent, or potentially impactful, than the new Canadian Standard on Related Services (CSRS) 4200, Compilation Engagements. It is effective for period beginning on or after December 14, 2021. If you haven’t started your implementation process, the time to start is now as there are many business decisions to be made. The earlier you start your process, the more efficient you will be.

CPA Canada has a number of resources to help you understand the changes.

ACCESS CPA CANADA RESOURCES HERE

Canadian Standards on Quality Management

The International Auditing and Assurance Standards Board (IAASB) released two guides to help practitioners implement their suite of quality management standards. The guides are a good start in implementing the standard. You may also want to take the ASK KSA free PD session on the same topic to help you gain an overall understanding of the requirements.

ACCESS IMPLEMENTATION GUIDE HERE

SIGN UP FOR ASK KSA PD CSQM1 FREE SESSION HERE

The Importance of the “Right” Client Base

Running a firm is a business and like any business, you want to spend time where it will pay off. These days, practitioners are busier than ever and having the “right” client list is critical. After another crazy year, where clients are demanding more and more of your time, it is a good time to review your client list and seize the opportunity to filter out client relationships that are not working for one reason or another. It may seem counterintuitive to grow your business by letting go of clients however studies have shown the opposite. Refining your client base is a great way to re-establish focus as a firm leaving more time to serve the clients you do have and gain more than are in line with shared values.

There are two recent articles that I came across on this topic that are both the read. They provide insights to reflect upon as you reflect on your client base. Definitely worth the read. And now is the right time of year to take action.

READ AW ARTICLE ON CULLING CLIENTS HERE

READ ACCOUNTING TODAY ARTICLE ON DROPPING CLIENTS HERE

Practice Transformation Action Plan

IFAC issues many amazing publications specifically focused on SMPS and the Practice Transformation Plan – A Road Map to the Future is one of them. The current environment offer SMPs significant opportunities to adapt. Along with reviewing your client list, what are other changes that will have an impact on your firm. The Transformation Action Plan highlights key areas and initiatives for SMPs as trusted advisers to their clients. They state that in the current environment it is essential for small firms to:

  • Prioritize the health and safety of employees, facilitate virtual operations and support staff’s flexible working.
  • Ensure there is regular communication with clients to identify their needs and demands.
  • Maximize their close client relationships and in-depth knowledge to provide relevant services, demonstrating the ability to diversify service offerings.
  • Utilize technology to provide insights and enable clients to understand their financial circumstances and take informed and appropriate actions and decisions.
  • The publication also references many other great tools and resources for SMPs.

DOWNLOAD THE ACTION PLAN HERE

How Can Your Firm Harness the Potential of Gen Z

There are key issues to address as Generation Z (presently 18-25 years of age) joins the working world. ACCA and IFAC undertook research in this area and surveyed 9,000 Gen Z’s around the world about their career aspirations, needs, worries and perceptions of business and employers. The resulting report offers recommendations and provides insights for employers seeking to hire, develop and retain this generation of talent.

READ REPORT HERE

ASK KSA Professional Development

To help support you with all this change, you may want to consider taking one of the many ASK KSA PD courses available. They cover topics including the assurance standards, preparing for CSRS 4200, practice management, the new Quality management standards and ethics. All of these courses will help you with keeping up-to-date on changes.

CHECK OUT ASK KSA PD COURSES HERE

Other upcoming standard changes include the Quality Management Standards and CAS 315 both of which will have an impact on the activities of your firm. As the months progress, I will send you information on available resources and tools to help keep you up-to-date and be prepared. In the meantime, continue to enjoy our beautiful summer weather. I am off to a friend’s cabin for the long weekend and hope you have some fun events planned as well. When you return to work, I will be here to support you as needed to help you save time and achieve peace of mind.

Best regards,

Kirsten S. Albo, FCPA, FCA
President
1.204.228.2529
www.ksaconsultinginc.com