Fall has officially arrived and I think it will be a busy one. There is a lot on the go from every aspect of running a practice. Planning engagements, practice management and professional development all seem to fall (pun intended) into this time of year. This month’s topics will help you get ready for everything that needs to get done. Read on…
The new Agreed Upon Procedures standard (CSRS 4400) has been approved and is effective for engagement terms agreed upon on or after January 1, 2022. There are many improvements to the new standard and it is consistent with other recent changes, therefore you may want to consider early adoption for upcoming AUP engagements I don’t believe the transition will be difficult in this case. A blog by CPA Canada will help you understand the new standard and its implications.
READ BLOG HERE
Last week the International Standards setters approved the new suite of quality management standards replacing ISQC1. Why do Canadian practitioners care about these new standards? We care as the AASB has exposed draft standards on the same topic to replace CSQC1. I wrote a LinkedIn article on the expected changes and the issues faced by the AASB as they consider the unique aspects of the Canadian market.
READ ARTICLE HERE
Phase one of the 2020 version of PEG released in August. Practice Aids and Volume 1 are now available on Knotia (soon to released in Jazz-it and Caseware). Changes are classified as Major, Moderate or Minor. Phase two which includes Volume 2, case studies and other content will be available in October. Highlights of the significant changes included the release of letter and practice aids related to CSRS 4200 Compilation Engagements practice aids related to CAS 540 Estimates. The What’s New Section has a good summary of all the changes.
LOG INTO KNOTIA HERE TO ACCESS THE PEG
Having a proper quality control system in place, especially with the upcoming changes, can help a firm be successful and grow. “Firms love to land new clients and keep their current clients happy. After all, acquiring new business and retaining it is the key to growth” says author Cheryl Meyer (Journal of Accountancy). Revenue growth can cause problems if a firm does not have the proper control system in place. The article includes a number of tips on implementing a solid system of quality management.
READ ARTICLE HERE
Auditors are required to obtain evidence related to the design and implementation of controls, whether or not controls are going to be relied up. This is an area where practitioners often struggle, especially in the audits of less complex entities. An article in the Journal of Accountancy outlines five missteps to avoid in the process of evaluating internal controls A good article to help you be effective and efficient.
READ ARTICLE HERE
COVID-19 related events and conditions have likely caused changes to entities’ operations and internal control further complicating design and implementation requirements. Changes in operations may result in new or changed risks, processes, and controls. Listen to this special, and practical, practitioner’s webinar from CPA Canada to learn more.
REGISTER FOR WEBINAR HERE
Professional Development Courses
Path to Implementation – CSRS 4200
October 16, 2020
October 28, 2020
November 12, 2020
November 23, 2020
Putting Ethics into Practice
November 19, 2020
December 18, 2020
Assurance and Accounting Updates
In-house offerings available. Contact me for details.
Online dates coming shortly.
How do you like the new monthly update format? I would love to hear your feedback. There are a number of new initiatives I have recently undertaken. In addition changing the format of my newsletter, I am now delivering professional development sessions online. ASK KSA PD courses are unique in nature as they are interactive and engaging and very practical. As always, I am here to help you save time and achieve peace of mind. Reach out anytime.
Kirsten S. Albo, FCPA, FCA
In this Update: Less Complex Entities; Technology; Dealing with Clients; COVID-19 Challenges
Slowly businesses are ramping up operations, but it seems that practitioners have been busy all along. Despite the extended deadlines, many challenges have been faced, and solved, over the past few months. Standard setters also continue to be busy with interesting discussions including the potential for a new standard for the audits of less complex entities. This month’s thought leadership covers important topics as we continue all to move forward. Read on…
AASB Decision Summary – New Standard for Audits of LCEs?
Exciting news. At their June meeting, the Audit and Assurance Standards Board (AASB) provided input on the IAASB Audits of Less Complex Entities (LCE) Working Group’s proposal to start developing a separate standard on this topic. Matter discussed included the overarching principles to be used when developing a separate set of standards. The IAASB is clearly headed in the direction of setting a separate standard for the audits of LCEs which will have a significant impact on the profession.
I previously communicated that I am a member of the AASB Working Group on the Audit of Less Complex Entities providing insights and recommending solutions to the challenges faced by SMPs in auditing these types of entities. There is a long way to go but I feel we are headed in the right direction. Do you agree with me? Feel free to reach out with your views directly so I can provide further input to the Working Group and the direction we should head.
The other topic of interest at the AASB meeting included discussions on Quality Management. The IAASB project to revise standard for quality management at the firm and engagement level continue. The IAASB expects to approve the final ISQM 1, ISQM 2 and ISA 220 at its September 2020 meeting. In turn, the AASB expects to approve the Canadian equivalent at its January 2021 meeting. However there are several Canadian issues yet to resolve, the main one being if the new standards apply to compilation engagements or not. Stay tuned.
Innovation in Audit: It is not Just About Technology
Auditors love JELLY. Just Exactly Like Last Year. And to hang out with SALY. Same As Last Year. However these can limit our ability to innovate in an audit. Innovation in an audit is more than just changing technology. It is about thinking differently about challenges faced, and thinking about them before you jump into a solution. While it is important to conduct high quality audits, conducting engagements efficiently is just as important. This article from Accounting Today was a thought-provoking read for ideas in how to innovate the audit. File efficiency reviews are another great way to make changes to your engagement process. I would be happy to assist you in performing such a file review to help you avoid JELLY and SALY.
Small and Mid-sized Enterprises (SMEs) Need Small- to Mid-Sized Practitioners (SMPs)
Businesses are ramping up operations however they continue to make hard decisions about their employees and payroll along with other operating decisions. They need the support of accountants whom they know and trust. With candid and empathetic discussions and a flexible approach, SMPs can enable SMEs with the right tools to bridge the gap between crises mode and action mode. An article in Accounting Today focuses on three guiding principles as practitioners help clients navigate disruption.
Reporting and Fraud Risk Arising from Covid-19 Pose Significant Challenges
In response to the current crisis, many organization have had to quickly change working practices and protocols to enable remote working, which present an increased risk of fraud of internal controls can by bypassed as a result. These changes can create challenges for practitioners in conducting engagements. An article published by IFAC highlights the need for auditors to have increased awareness and the importance of exercising professional skepticism. This is an excellent article and well worth the read.
Tomorrow is July 1 and no fireworks this year but I am okay with that. I would rather move forward at a steady pace then take two steps forward and one step back. So, move forward we do. Please feel free to reach out at anytime with any questions you may have to help you save time and achieve peace of mind. In the meantime, enjoy the upcoming month, it is summer you know.
Kirsten S. Albo, FCPA, FCA