New year, new standards and new baby. What a great start to the year. My son and daughter-in-law just had a little baby girl so I am now a grandma and I can’t be more excited. The excitement of new standards pale in comparison but we can’t lose sight of these many upcoming changes. Read on…
At their meeting on January 21, 2021, the AASB approved the new Quality Management standards consisting of CSQM1, CSQM 2 and CAS 220. The final standards will be published in a Handbook update in May 2021. The standards will be effective as follows:
These new Quality Management standards were approved by the IAASB in September 2020. Rest assured I will be providing updates and links to guidance on these standards as they are made available. In the meantime, a video from the Chair of the ISQM Task Force provides a clear and concise overview of the new requirements. Very worth the half hour of your time. WATCH THE VIDEO HERE
With all of the upcoming assurance and accounting changes, I thought it worthwhile to summarize these for you so you have all in one place. I created a simple document that you can print and keep handy. The key thing to remember is the standards in effect for years ending December 31, 2020 which are CAS 540 Auditing Estimates and Section 3465 Leases. There are many more standards for years ending December 31, 2021 but for now focus on what you need to know. ACCESS ASK KSA SUMMARY PDF HERE
CPA Canada published two good guidance tools on various accounting issues related to Covid back in May 2020. However, as you start to perform engagements in this upcoming year, many of the factors still exist and therefore I wanted to bring these publications to your attention once again. They include specific guidance on the many accounting issues that may have to be addressed along with practical consideration and the applicable handbook section. READ ASPE GUIDANCE HERE READ ASNPO GUIDANCE HERE
Being a trusted advisor is more than the audit or review or tax return. It is about providing guidance and support to your clients. CPAs are asking for insights on how to deal with emerging business issues resulting from COVID-19. Learn about these issues and the guidance available to help your client deal with issues such as enforceability of commercial contracts, business interruption insurance coverage and authentication of documents among other topics. READ RESOURCES HERE
What does the upcoming year have in store for firms? What are your plans? How do you compare to others. In November Accounting Today conducted its annual survey of firms of all sizes polling practitioners on everything from the growth expectations to their plans for tech spending their use of social idea, the new services they are offering and what they expect to happen with the pandemic. The stats are very interesting. How do you compare? READ SURVEY RESULTS HERE
A key initiative I will be undertaking over the next few months is developing online, on demand professional development courses. Courses will be about one hour in length and cover many topics such as the new Quality Management Standards, practical application of the auditing standards such as performing substantive analytical procedures and journal entry testing, and other soft skills topics such as ethics, coaching and feedback and communicating with clients. As I develop my online course curriculum, I would be very interested in feedback from you as to what topics you would like me to include. I am open to all ideas and would love to hear from you.
What topics are of importance to you? What courses would you like to participate in? What thoughts do you have on what should be included in my online courses? Send me an email.
Don’t forget provincial PD reporting requirements. Reporting due at the end of this month (NOW!).
It is going to be an exciting year on all fronts. While I will be busy with my new baby granddaughter, I will also be very busy with the many new standards and helping you keep up to date as you implement them to ensure you conduct efficient and effective engagements. I look forward to working with you as needed. 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: Ethics; Rising Revenues for SMP; Succession Planning; Compliance Reporting
It is ironic the standard setters are so busy yet there is nothing new to report. Over the past few months, I provided you details about exposure drafts for auditing standards (CAS 315), compilation engagements (CSRS 4200) and quality management (CSQM 1 and CSQM 2) among other technical topics. But the standard setters are still deliberating on comments received so there is no new news on any of these fronts. I will continue to track status and let you know as soon as there are developments. So, in the meantime, I have highlighted other random topics of interest I have come across. Read on…
With the new professional development requirement to have at least four hours of verifiable PD specifically related to ethics, this subject matter is a hot topic these days. In fact I am developing an Ethics Workshop to be delivered to firms to help meet this requirement in an interesting and unique way. Feel free to contact me about delivering “Putting Ethics into Practice” to the members of your firm. While preparing this workshop I came across an article that I think may be of interest to you. “Paying Professional Ethics More than Lip Service” provides guidance on building trust in business and how to be anchored by fundamental ethical principles.
Rising Revenues for Sole Practitioners and Small Firms
As a sole practitioner or a partner of a small to mid-sized firm, it can be challenging to gather competitive information on how you are doing compared to your peers. “Rising Revenues for Sole Practitioners and Small Firms” summarizes the results of the 2019 Accounting and Bookkeeping Operations and Technology. According to the survey, 36.2% of respondents earned more than $150,000 in revenue for 2018 compared to only 31.8% in 2017. How do you compare?
This past month I led a practitioner forum on the topic of human resources. It was a very interesting session with a variety of topics discussed including recruiting, retaining, compensating and motivating staff. One topic we did not cover in detail but is very important is building your team is succession planning. To secure the future succession, and success, of your firm, it is important to start with what kind of team you must create. An article from Accounting Today provides an interesting perspective on building teams and how planning for such breaks down to two categories: composition and development.
I have included Compliance Reporting as a topic in previous months but as I have received numerous questions on this topic over the past month I thought it worthwhile raising again. Often government (such as Manitoba Housing), and other oversight, agencies will include the type of report they want issued in the agreement. However these agencies are not the standard setters and do not understand our requirements as practitioners. It is important to educate these agencies on the types of reports that can be issued. The new standards 3530 Attestation Engagement to Report on Compliance or CSAE 3531 Direct Engagement to Report on Compliance are the reports to be issued related to compliance with lease, funding or other debt agreements. These standards are effective for compliance reports dated on or after April 1, 2019. If you want a pair of fresh eyes to read your report before you release it, just reach out.
As mentioned in the introduction, I will keep you updated on technical developments as they happen. In the meantime, if you have any questions on any topic or would like further information on the Ethics Workshop, please feel free to contact me. We are headed into the time where practice inspections are taking place and it is a good time to ensure you have the right processes in place to address quality and other matters. I am here to help as needed. Have a great weekend.
Kirsten S. Albo, FCPA, FCA