Along with ever-changing accounting standards, there are now new auditing standards for all organizations with year ends after December 14, 2010. The existing auditing standards have now been replaced with international auditing standards, implemented in Canada as the new Canadian Auditing Standards (CASs).
Along with ever-changing accounting standards, there are now new auditing standards for all organizations with year ends after December 14, 2010. The existing auditing standards have now been replaced with international auditing standards, implemented in Canada as the new Canadian Auditing Standards (CASs). The move to CASs helps auditors perform consistent audits that are recognized worldwide.
What will this mean to my organization?
The extent of the changes will depend on your organization and its circumstances. For the majority of organizations the main things that you'll notice are that the auditors report has changed, the date of the audit report has been extended, there is increased communication with the board, plus some additional requirements to increase the comparability of audits between countries.
Audit Report Changes
The new CAS audit report has been extended to give more information to the reader about what some of the fundamental notes to the financial statements are, as well as additional information on the different roles between management and the auditors. The standard 'clean' three paragraph audit report will now be a minimum of six paragraphs.
Under the previous Generally Accepted Auditing Standards (GAAS) the auditor would date the audit report as the date when the audit was substantially complete, which would typically be the date that the auditor completes fieldwork. In the past, this could mean that the report could be dated, but the auditors could still be waiting on audit evidence to support their opinion. Now as auditors, we are not able to date the statements until all the supporting evidence has been obtained (not just requested) and the board has approved the financial statements. As a result of this, the date of the audit report will usually be dated later than it has been in the past.
Communications
A key area where the board of directors will likely notice a change in the auditing standards is with the level of communication between the board and the auditor. The new CASs have increased the reporting requirements between the board and the auditors to ensure that the board understands the scope of the audit as well as the proposed audit approach.
How RLB can help
Rest assured that your RLB team is on top of the change to the new Canadian Auditing Standards. We understand the impact that this change will have on your organization and would be glad to meet to discuss this with you. While we take our professional obligation to perform high-quality audits seriously, we also aim to make our audits as simple as possible for our clients. Our commitment to this goal will not change.
Please do not hesitate to contact us if you have any questions about these new auditing requirements.
For additional information about how the new auditing standards will affect your audit, we've included the link to an article prepared by the Canadian Institute of Chartered Accountants.
