In this Update: CSRS 4200; Professional Development; Firm Risk Management; ASPE Standards; PSAS Standards;
Here it is already at the end of July. It seems that only last week I was waiting for March to end. Where does time go? And why does it go so quickly? Unfortunately, I don’t have the answers to these questions so have decided to focus on the future and what needs to be done to manage a practice in an efficient and effective manner. The theme for this month is being prepared. Read on…
CSRS 4200 Compilation Engagements (CSRS 4200)
The new compilation standard is effective for periods ending on or after December 14, 2021. While that may seem like a long time away, in fact, it is only 18 months from now. Talk about time moving quickly, the effective date will be here quicker than you think but there are many things you can start now to get ready. CPA Canada recently hosted a Practitioners Pulse Webinar on CSRS 4200 and the real-life experiences of three practitioners who have implemented the standard and their experiences in doing so. They had very practical responses to the questions posed on implementation. It is worth spending an hour of your time listening to this one.
I believe it is critical to develop a project management plan over the next 18 months as the new standard could have a significant impact on your practice. I will be delivering an online training course to help practitioners learn how to implement the new standard in an effective and efficient manner through recognizing where business decisions are required, determining the approach to meeting requirements and developing an action plan between now and the effective date. There will be several sessions available starting mid-September. Stay tuned for details. In the meantime, you can check out a detailed description of the course on my website. I will let you know when dates have been finalized and registration is open.
Risk Management (Firm Risk Management)
Another area to be prepared relates to practice liability. Even though we may prefer not to think of it, it is important to think of risk as we continue to serve clients through these time. As much as we don’t like to think about it, unfortunately claims are a part of business. CPA Professional Liability Plan Inc. believes there will be increased and unique claims risks that will arise over the next months and years. They have a unique perspective in their recent article on this topic which includes issues to consider as you perform engagements.
Withdrawing from an Engagement (Firm Risk Management)
Speaking of business risk and being prepared, no matter how perfect the partnership between a firm and its client may seem, as with all things in business, sometimes the partnership does not work out. This can leave both parties questioning whether a practitioner can withdraw from the engagement. An article from Accounting Today explores several scenarios in which an auditor might withdraw from an audit and the implications of doing so. While the article focuses on audit engagements, the principles are similar for other types of engagement.
Public Sector Accounting Standards Deferral (ASPE Standards, PSAS Standards)
Finally, you have a longer period of time get prepared on certain public sector accounting standards. The Public Sector Accounting Standards Board met late in June/early July to discuss several upcoming changes to accounting standards. Among other topics discussed, they decided to defer the effective date of all upcoming accounting standards by one year. These include:
As a reminder, the May update highlighted the deferral of effective dates for ASPE standards including 3051 Investments, 3465 Income Taxes and 3856 Financial Instruments.
Enjoy your August. There a lot of things to look forward to in the upcoming month, the most exciting of which is the 2020 release of the PEG checklists. Along with the typical revisions and updates, the important documents will be the new checklists related to CSRS 4200 Compilation Engagements and CAS 540 Accounting Estimates. I look forward to reviewing all of the updates in detail and providing my views to you to help you make the business decision on implementation. In the meantime, feel free to reach out any time with any questions. I am here to help save you time and provide peace of mind. Have a great long weekend. I look forward to enjoying the sunny warm days, watering my flowers and golfing, a lot.
Kirsten S. Albo, FCPA, FCA
In this Update: ASPE Standards, CSRS 4200; SME Accounting; Auditor Considerations
This month flew by for me and I am not quite sure why. Maybe it is because the new routines have become familiar, maybe it is because I am busy with a few special projects or maybe it is just because it has been nice out and I have taken time to enjoy the backyard and my flowers. In the end it doesn’t matter, all I know is I have started focussing on the future once again instead of trying to get by day by day. This month’s updates are also mainly about the future. Read on…
Deferral of Effective Dates for ASPE Standards
At its meeting on April 15, 2020, the Accounting Standards Board (AcSB) made the decision to defer the effective dates of the following amendments effective for years beginning on or after January 1, 2020 by one year to January 1, 2021:
The biggest takeaway from list above is the postponement of the effective date for financial instruments related to the amendments on Redeemable Preferred Shares Issued in a Tax Planning Arrangement. Due to the amendments, it was expected many preferred shares may now have to be classified as liability versus equity. The postponement allows practitioners more time to perform the analysis of classification and clients more time to discuss the impact on covenants with their lenders. Good news all around.
The AcSB is also deferring the effects dates of the new Section 3041, Agriculture and amendments to Section 3400, Revenue, effective for year beginning on or after January 1, 2021 by one year to January 1, 2022. Early adoption of each of the amendments and the new Section continues to be permitted.
CSRS 4200 Guidance
Unlike the accounting standards, there has been no discussion on deferring the effective date for this standard. CPA Canada is hosting a special Practitioner’s Pulse on the new compilation standard. The webinar, to be held in July, will help you learn about the new compilation standard, CSRS 4200 and cover implementation guidance available. Listen to practitioners share practical tips and answer questions on how to implement the new standard. I already have been working with a number of practitioners on implementation as there are many activities you can undertake well in advance of the effective date (periods ending on or after December 14, 2021).
Small Businesses Need Small Accounting Firms
In times like these small businesses turn to their advisors for assistance. It is important to be there for your clients as that is what keeps your firm growing. Business owners are making hard decision about their employees, struggling to maintain ongoing expenses despite losses in revenue and deciphering confusing information about which government programs might be able to help them. With candid and empathetic discussion and a flexible approach, practitioners can enable their clients with the right tools to bridge the gap between crisis mode and action mode. In this article from Accounting Today there are three guiding principles to focus on as you help clients navigate disruption.
Okay, one topic that is back to the current environment but included as it helpful as you complete current engagements. It is hard to keep track of all the guidance, articles and resources to help auditors address the risks in performing their engagements in relation to the impact of COVID-19 operations, financial results, operations and cash flows of organizations. However, CPA Canada’s latest resource does a good job in bringing it all together. This publication covers most of the topics auditors should be thinking about and links to other resources available. Almost a one-stop shop, almost.
This was also a big month in that Revised CAS 315 (Identifying and Assessing the Risk of Material Misstatement) was formally released in the Handbook. The Revised CAS 315 is effective for audits of financial statements for periods beginning on or after December 31, 2021. I will provide you more guidance on this CAS in the coming months but I wanted to bring this to your attention as it is indicative that standards are still changing and it is important to keep up and not fall behind so you do not have to scramble at the last minute to keep up. As they say, slow and steady wins the race. Feel free to reach out any time. I am here to help save you time and provide peace of mind. In the meantime, have a great weekend.
Kirsten S. Albo, FCPA, FCA