December 2020 Update

January 5, 2021 / Monthly Newsletter

Greetings,

The end of the year is upon us. My original intention was to send a holiday greeting only. However, there was such an exciting announcement this week that I could not help but to send one technical update – one audit standard for the audits of less complex entities?!?! Crazy. It is an exciting time to be in public practice with so many changes on the horizon. Read on…

Separate Audit Standard?!?!?!

As previously mentioned, I am a member of the Advisory Group to the AASB on the Audits of Less Complex Entities (LCE). A huge announcement was just that has significant implications on the audits of these types of clients. On December 15, 2020 the IAASB announced the approval of the project to develop a draft of a separate standard for the audits of LCEs. The IAASB is developing the the standard on the following basis:

    • Using similar concepts as the International Standards on Auditing (ISAs)
    • Containing all requirements relevant to an audit of an LCE with a “stand alone” standard
    • Divided into “Parts” following the flow of an audit and setting our the relevant requirements for the various components within the audit

The Audit and Assurance Standards Board (AASB) is a part of the discussion and has had input into the approach. I can share with you first hand that our review of the existing standards and where “pain points” exist, the discussion of what the new standard might look like, and concepts to follow have been extensive and in-depth. It is so exiting to be a part of Canadian standard setting. The target date for the exposure draft on the new standard is mid-2021. That is incredibly fast in the standard setting world but there is a recognition that this project needs to move forward at an advanced pace. Our Advisory Group will be reviewing the draft exposure draft in January with the objective of providing further insights on the challenges faced by auditors in the audits of these types of entities. I am honored to be a part of the conversation. If you have any strong views on the separate standard and its basis, I would love to hear them and pass them on in our Advisory Group discussions. You can read more here about the details of the proposed project. Two very good short summaries of what is ahead.

COMMUNIQUE: DEVELOPING A SEPARATE STANDARD FOR THE AUDITS OF LCE

COMMUNIQUE: ADDRESSING UNDERSTANDABILITY, SCALABILITY AND PROPORTIONALITY

Happy Holidays and Happy New Year

The year 2020 has been like no other in so many ways. I read an article earlier this week that spoke to me as it had two important concepts that sum up 2020:

  • ADAPTABILITY. The definition of adaptability is the quality of being able to adjust to new conditions. Throughout the year we have definitely had new conditions and I have seen so many of you adapt with grace and speed. Keep up the great work as I have no doubt more new conditions are to come.
  • BRICOLAGE (had to look this one up). Bricolage is connected with resilience and loosely translated it means to build something with whatever you have at hand, even if it is not everything you need. It is about creation with a diverse range of available things, something to always keep in mind.

If we keep these these two important concepts top of mind, 2021 should be a breeze, no matter what it holds. I want to take this opportunity to wish you all the best in 2021.

From my family to yours, happy holidays. I hope you have a chance to relax and enjoy some time off and for a moment, just sit in peace. The work will be there tomorrow, so focus on what is important to you. As always, I am here 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