August 2020 Update
In this Update: Professional Development; Standards Update; AUP Engagements; PEG Updates
Greetings,
This has been a busy month; despite the fact it is August. From my discussions with many of you, it seems we are all still catching up from the past few months and trying to get organized for the upcoming months. There has been a lot of activity related to Handbook updates along with related tools and practice aids, so much so I sent out two special updates earlier this month. I included the information again in this month-end update as they are so important I don’t want you to overlook them. Other topics this month are to help you get ready for fall and beyond. Read on…
Path to Implementation – CSRS 4200 (ASK KSA Professional Development Course)
You have been reading information about the new standard for months now and it is time to act. The standard is effective periods ending on or December 14, 2021 – that is only 18 months from now!! What are you doing to get ready? I will be leading a Professional Development Course to help you understand the requirements and develop an implementation action plan between now and the effective date. The course is unique as it is practical in its approach and focuses on application, not technical.
You will leave the course with a solid understanding of the standard and an implementation action plan. Tools and templates will be provided including a draft action plan, a scoping spreadsheet, basis for accounting template notes and documentation guidance.
Registration will go live later this week but in the meantime, mark your calendars for the date that works best for you. The following sessions are currently available:
- September 17: 9 am – 12 pm CST
- September 23: 9 am – 12 pm CST
- September 24: 1:30 pm – 4:30 CST
Each session will be live via Zoom and limited to 10 participants to allow for interactive discussions. As these sessions fill up, more will be added. Cost for the 3-hour verifiable CPD session is $600 plus GST. If you would like to arrange a separate session for your firm only (either in-person or on-line), contact me directly and we can arrange.
READ COURSE DETAILS AND REGISTER HERE
Handbook Updates
The first special update of the month covered the CPA Canada Standards and Guidance Collection. There were many significant amendments and revisions in both the accounting and assurance sections of the Handbook. The accounting updates were for changes in standards for both ASPE and ASNPO. The assurance updates were revisions to certain CASs and the new standard CSRS 4400, related to Agreed-upon Procedures.
READ ASK KSA DETAILED SUMMARY HERE
New Agreed-Upon Procedures Standard
Speaking of the new Agreed-Upon Procedures standard, CPA Canada published an article about this new standard which opens the door to a broader range of agree-up procedures (AUP) engagements. The new standard is effective for engagements for which the terms are agreed on or after January 1, 2022. In this case I believe early adoption is a good thing. The article covers the key differences between the existing standards (Sections 9100 and 9110) as well as things to watch out for when performing AUP engagements. Implementation tools will be coming but in the meantime, take a moment to understand the implications of the new standard.
Knotia PEG Release
The second special update related to the 2020 PEG release. This year, the release will be in two phases. Practice Aids and Volume 1 are now available on Knotia. Volume 2, case studies and other content will be available in October. Highlights of the significant changes included the release of the new CSRS 4200 Compilation Engagements and CSRS 4400 Agreed Upon Procedures letters and practice aids and practice aids related to CAS 540. There were other changes that were classified as Major, Moderate or Minor. Read the What’s New Section to understand the updates or give me a call.
READ ASK KSA DETAILED SUMMARY HERE
While we are busy these days, please take a moment to breathe and enjoy these last few dog days of summer (where did that saying come from anyway?). Remember, things will get done. I promise. I am here to help as needed. Have a great week.
Best Regards,
Kirsten S. Albo, FCPA, FCA
President
August 2020 – Special Update
Greetings,
The CPA Canada Standards and Guidance Collection (the “Handbook”) was updated this month. Unlike many previous releases which did not include noteworthy changes, this time there were many significant amendments and revisions.
CPA Canada Handbook – Accounting
Part I – IFRS
- Mainly editorial changes only.
- For further details, refer to Highlight Summary No. I. 59.
Part II – ASPE
- Amendments to:
- Subsidiaries, Section 1591
- Agriculture, Section 3041
- Investment, Section 3051
- Equity, Section 3251
- Income Taxes, Section 3465
- Financial Instruments, Section 3856
- The amendments related to the deferral of effective dates, discussed in my May 2020 Update. Ensure you stay up top of when the new standards are effective as certain revisions have significant impact, the most being Financial Instruments and the classification of Redeemable Shares. This could have a substantial impact on your client’s financial statements. It is a good thing this has been deferred a year as gives more time to consider the impact and discuss such with your clients and their bankers.
- For further details, refer to Highlight Summary No. II. 24.
Part III – ASNPO
- Amendments to:
- First-time Adoption by NPOs, Section 1501
- Inventories Held by NPOs, Section 3032
- Tangible Capital Assets Held by NPOs, Section 4433
- Disclosure of Related Party Transactions by NPOs, Section 4460
- For further details, refer to Highlight Summary No. III. 13.
CPA Canada Handbook – Assurance
- Conforming changes to Canadian standards (CAS 220, CSAE 3000, CSRE 2400) as a result of the Revised International Ethics Code. These were not significant changes.
- New standard for CSRS 4400, Agreed Upon Procedures and a new Guideline, AuG 50, Conducting a Performance Audit in the Public Sector in Accordance with CSAE 3001.
- Amendments to CSRS 4460 Reports on Supplementary Matters Arising from an Audit or a Review Engagement.
- A number of other standards were withdrawn.
- For further details, refer to Highlight Summary No. 31.
Lots of changes taking place. To access each of the links above, you will need to log onto Knotia. The details are worth reading. The other release that will be occurring is the 2020 PEG updates. This will also be an important release as the updates will checklists for the new compilation standard 7CSRS 4200 and CAS 540 Accounting Estimates among other editorial updates. Once the new checklists are released, I will be reviewing them in detail and sending out another special update on critical changes I think you should be aware of. Call me with any questions you may have. This definitely is a busy summer but I am here to help you save time and achieve peace of mind.
Best Regards,
Kirsten S. Albo, FCPA, FCA
President
April 2020 Update
In this Update: Dealing with Clients, COVID-19 Support; Standards Update; Reminder
Greetings,
Life continues to change. With the announcements of the province opening, we will slowly move into a “new normal”. I recently read that phrase is in competition for being the highest used phrase of the year – right up there with “flattening the curve”. It will be interesting to watch in the coming months what the new normal entails and how we adapt. Working remotely, social distancing, conducting client meetings, delivering training will all evolve as we settle in. In the meantime, the focus is, and always will be, the client and how we work with them in completing engagements and providing support. This month’s update includes information on things to think about as we move into our new normal. Read on…
5 Steps for Advising Clients
There is so much information to weed through these days, emergency funding options, new working environments, government guidelines, the list goes on. After dealing with the immediacy of your own operations, supporting clients is most likely one of your top priorities. An article from the Journal of Accountancy explores five strategies to navigate advisory, and sometimes difficult, conversations with your clients to help them cope. If there is ever a time when clients needed your guidance, expertise and care, it is now. The strategies are straightforward and may give you useful ideas to help manage through this time.
Areas of Focus Due to COVID-19
Global developments relating to the current situation have impacted the work of auditors. Uncertainty and unpredictability may create risks of material misstatement that are new or heightened. Auditors have to adjust how they obtain sufficient appropriate audit evidence on which to base the audit opinion amid the many challenges they are facing. IFAC has published an Alert that highlights many of the items that auditors need to focus on in a clear and concise manner. The publication refers to ISAs but Canadian auditing standards (CAS) are substantially the same so this is particularly good tool to help you assess risk and document your conclusions.
COVID-19 and Going Concern Impacts
Even though business may now be able to open, COVID-19 related event may cause a deterioration in an entity’s operating results and financial position, affecting its ability to continue as a going concern. An article from CPA Canada provides guidance on learning how to address the challenges that arise from these conditions. Whether the engagement is an audit or a review the issues are the same and must be considered.
Coping with Standards Changes
There have been some delays in the effective date for some US GAAP and IFRS standards. However, for all my research, I have seen no discussion on delays for any Canadian standards. That means throughout all this we still must be cognizant of upcoming new standards. Nothing is imminent but throughout this time we cannot forget about the future. It is a challenge to keep up. The Journal of Accountancy has tips on how to “stay the course” and deliver high quality engagements.
Reminder
CPA Canada’s COVID-19 information page CPA CANADA COVID RESOURCE PAGE is a good resource for guidance on financial reporting and other issues. FRAS Canada also has an information page FRAS CANADA COVID RESOURCE PAGE although this one is a little more IFRS focussed.
I promise there will come a day when we are not talking about the pandemic and flattening the curve (although in my case, I am eating so much baking I feel like I am “fattening the curve”). In the meantime, whatever challenges you face, remember that I am here as a resource as needed. Feel free to reach out at any time. Take care and stay healthy.
Best Regards,
Kirsten S. Albo, FCPA, FCA
President
September 2019 Update
In this Update: Standards Update; Public Sector Disclosures; Credit Controls & Fee Collections; Enhancing Culture
Greetings,
This month marked a change in both weather and standards. One can feel a bit of a nip in the air and things are finally starting to move on the standards front. Decisions have been made over this past month, and we can expect a few more next month. While most changes are not imminent, they will come quicker than we think and it will be important to plan so you can keep your practice running effectively and efficiently. Read on…
Standards Update – AASB Decisions
As noted above, decisions were made on standards over the past month. Exposure drafts were finalized, timing was discussed and next steps are under way. The following are highlights from the AASB’s (the Board) September meeting:
- On September 20, 2019 the IAASB approved the final draft of ISA 315 (Revised) Identifying and Assessing the Risks of Material Misstatement. The AASB provided input on the draft before it was released and has stated Canada will follow suit very shortly. Expect to see further updates in next month’s newsletter.
- The Board discussed key issues related to the project to revise compilation standards, CSRS 4200 Compilation Standard. They expect to approve the final standard at their October 2019 meeting. Key topics discussed included the description of the basis of accounting, subsequent discovery of facts, amendments to the glossary and the effective date. Stay tuned for further updates on this one too.
- The AASB provided input to the IAASB on feedback from the Exposure Drafts for quality management at the firm and engagement level. This topic is still under discussion and will appear again on their October agenda. This Exposure Draft will have a significant impact on a firm’s system of quality management, including policies and procedures documented in their QAM and engagements impacted.
- The Board unanimously approved amendments to CAS 700 Forming an Opinion and Reporting on Financial Statements. This change only impacts auditors of listed entities; these auditors will be required to communicate Key Audit Matters for periods ending on or after December 15, 2022.
READ THE AASB’S SEPTEMBER SUMMARY OF DISCUSSIONS HERE
Public Sector Compensation Disclosure Amendment Act
A reminder to those who issue these reports. A notice went out mid-year to all publicly-funded bodies reminding these organizations that the threshold for salary disclosures increased from $50,000 to $75,000 effective January 1, 2019. In addition, the notice stated that the publicly-funded bodies are no longer required to have the compensation reports audited. One matter of interest, while the notice says the audit is no longer required, the Act still has this requirement (I am trying to follow up on this discrepancy). Make sure you talk to your clients about the new requirements and the timing of implementation.
NO LINK AS THE LETTER WENT DIRECTLY TO ORGANIZATIONS, NOT THE FIRMS – ASK FOR IT FROM YOUR CLIENTS
Enhancing Firm Credit Control and Fee Collection
- This is the third (the second was in last month’s update) of a three-part series from IFAC addressing challenges small to mid-sized practitioners (SMPs) face in dealing with increased fee pressures. This article covers credit controls, collection techniques and dealing with conflict. There are very good tips in this article which is very worth the quick read.
Enhancing Culture
- Building strong relationships with your clients and motivating your staff starts with the attitude within your firm. Creating a strong culture is important, especially as you prepare for the many changes to come. An interesting article by Jean-Guy Talbot of ReveNew outlines crucial things to think about as you strengthen or improve your firm’s culture. You also may want to check out details of his upcoming conference in Ottawa this November. Rev Up Your Practice is a unique event which will cover this and many other important topics related to practice management. A conference like no other.
READ ARTICLE AND CONFERENCE DETAILS HERE
I have a sense it is going to be a very busy fall. Changes in standards, fee discussions with clients, updates to quality, meeting professional development requirements – the list goes on. If you are interested in a professional development course tailored to specifically to your firm, let me know. I have a course curriculum that covers everything from standards update, performing efficient and effective engagements and ethics. My fall schedule is starting to feel up so please reach out. I am here as needed to help you save time and provide peace of mind.
Best Regards,
Kirsten S. Albo, FCPA, FCA
President