Draft Strategic Plan 2022-2025 - Responses to Consultation Paper January 2021 - FRAS Canada
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Draft Strategic Plan 2022-2025 Responses to Consultation Paper January 2021
Draft Strategic Plan 2022-2025
Responses to Consultation Paper
Table of Contents
Response
Number Organization
1 BDO Canada LLP
2 OAG Alberta
3 OAG Canada [French]BDO Canada LLP
Tel: 416 865 0111 BDO Canada LLP
Fax: 416 367 3912 20 Wellington Street East
Toll-free: 888 505 7993 Suite 500
www.bdo.ca Toronto Ontario M5E 1C5
Eric Turner, CPA, CA
Director, Auditing and Assurance Standards
Auditing and Assurance Standards Board
277 Wellington Street West
Toronto, ON
M5V 3H2
April 12, 2021
Re: Discussion Paper on the AASB Draft Strategic Plan 2022-2025
Dear Mr. Turner,
We have read the above-mentioned discussion paper issued in January 2021 by the Auditing and
Assurance Standards Board. Overall, we are in favour of the draft strategic plan as set out in the
discussion paper and the following are our views on the specific questions outlined in the
discussion paper:
1. Do you agree with our mission? If not, how would you recommend we change it?
Yes.
2. Do you agree that the AASB has identified the appropriate strategic directions? If not,
what additional or different strategic directions would you suggest?
Yes. The strategic directions are all pertinent issues facing the profession today. Although we
agree with the remote working environment strategic direction, it was already a key growth area
as technology and culture shifted in the last couple of years. It was escalated by COVID-19 and
will continue to be very relevant even after COVID-19.
We believe that the advancement in technology is a priority to be addressed by the standard-
setters. In the spirit of timely standards (Goal #4), some technologies, such as cryptocurrency and
its basis in blockchain technology are not new or recent and will continue to impact financial and
non-financial reporting, resulting in an urgency of standards/guidance.
3. Do you agree with the proposed goals and objectives? If not, what additional or different
goals or objectives would you suggest?
While we agree with the proposed goals and objectives, we have concerns regarding Goal #1
“monitor and understand emerging issues in the changing environment to better anticipate
standard-setting issues”. The desired result from the “monitoring and understanding” activities is
not clear. If it leads to timely standard-setting and guidance, then it will be effective, however,
if it does not, then the goal would not be achieved. This goal should describe the measurable
deliverable it aims to achieve.
BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the
international BDO network of independent member firms.4. Are there additional developments in the environment not reflected in the Draft
Strategic Plan that may need to be considered in finalizing the Strategic Plan? If so,
please provide us with details and the impact you expect such developments to have on
Canadian stakeholders.
No.
5. Are there any other topics that we should consider in finalizing our strategic plan?
No.
Thank you for your consideration of the above-noted responses. If you have any further
questions, please contact me at 416-369-3088.
Yours sincerely,
Nazia Lakhani, CPA, CA
National Assurance Standards Partner
BDO Canada LLPOAG Alberta
Colin Semotiuk CPA, CA
Ian Sneddon CPA, CA
Office of the Auditor General of Alberta
Edmonton, Alberta
April 14, 2021
Eric Turner, FCPA, FCA
Director, Auditing and Assurance Standards Board
277 Wellington Street West
Toronto, Ontario
Dear Mr. Turner:
Thank you for the opportunity to provide comments on the ‘Draft Strategic Plan 2022-2025’
Consultation Paper. Our comments are as follows:
1. Do you agree with the mission? If not, how would you recommend we change it?
Yes – we agree with the draft Auditing and Assurance Standards Boards 2022-2025
mission.
2. Do you agree that the AASB has identified the appropriate strategic directions? If
not, what additional or different strategic directions would you suggest?
We agree that the AASB has identified three importance strategic areas. We would
categorize the three areas as emerging issues (goal #1), setting high quality
standards (goals #3 & #4) and collaborating and supporting stakeholders (goals #2
& #5). Based on these three categories and the descriptions provided in the
consultation paper, we believe a key area is missing: the maintenance of quality and
execution by users. We recognize that this issue expands beyond the AASB, however
as the standard setter, how is the AASB facilitating that the standards they develop
are followed? This principle can be applied throughout the draft goals provided,
however in the current consultation paper no reference is made in any of the five
goals to involvement with quality reviewers or inspectors, such as the provincial
institutes or CPAB. Per CPAB’s 2019 Annual Inspection Results (see attached), CPAB
has a target of 90% of reviewed audits with no significant findings for 2021. Since
2011, only in 2017 were over 85% of reviewed audit files with no significant
findings. Over this time period, approximately 25% of CPAB files have significant
findings. Is a 75% compliance rate acceptable? We recognize that no single
stakeholder is responsible to ensure compliance. Given the 75% compliance rate, we
believe a change in approach is required. We propose a change that includes the
AASB working with users, CPAB and provincial institutes to increase compliance.The AASB should include a goal that includes specific actions to improve the
compliance rates while working with CPAB, provincial institutes and others.
3. Do you agree with the proposed goals and objectives? If not, what additional or
different goals or objectives would you suggest?
Overall the goals stated provide a high level overview of the objectives AASB has for
the next three years, however the goals do not provide sufficient details, such as
when the goal is to be completed, specific actions, resources required, etc. These are
critical when developing a strategic plan. We have identified the following
improvements for the following goals:
• Goal #1 – the goal requires a specific timeline. Responding to emerging
issues cannot wait until 2025 to be completed under the current economic
environment and COVID-19. The goal should be refined to have specific
timeline and actions for 2022 or 2023.
• Goal #3 – AASB should clarify if the goal is to “set high-quality standards” or
“maintain high-quality standards.” Our position is the AASB has already “set
high-quality standards” and the goal, as mentioned above in our response to
question #2, is to focus on compliance with AASB’s high quality standards.
This goal will need to balance scalability with consistent application.
• Goal #4 – resource needs, what additional resources are necessary to
achieve the draft goal? Does the AASB currently have sufficient resources to
achieve this goal? Secondly, when planning to meet this goal it is critical that
the AASB maintains its consultation process, which has minimum time
requirements.
• Goal #5 – the goal should include more detail, specifically post-
implementation reviews for both CAS 540 and CAS 315. These two revised
standards are two of the largest changes to the CAS since it was adopted. A
detailed post-implementation review should be completed of both. This
review should likely include a two phased approach, the first with users and
a second to include inspectors so that the AASB can understand what
compliance rates with the revised standards occurred in the year or two
years following implementation.
4. Are there additional developments in the environment not reflected in the Draft
Strategic Plan that may need to be considered in finalizing the Strategic Plan? If so,
please provide us with the details and the impact you expect such developments to
have on Canadian stakeholders.
We recognize that the AASB has an on-going project covering fraud, going concern
and the expectation gap. We believe this is an important project and encourage theAASB to continue to analyze the issue(s) of fraud and perceived quality within the
assurance profession. From our perspective the first question when a fraud
becomes public remains, “why didn’t the auditor’s find it?” We recognized that fraud
prevention and detection is the responsibility of management and those charged
with governance, however we encourage the AASB to continue to analyze what it
can do to help the public understand management’s role, educate users of the
auditor’s role and if more can or should be done during a financial statement audit.
If the auditor’s role is to serve the general public, would it increase the ‘service to
the public’ to have more required fraud procedures given the negative effects when
fraud occurs? We believe this should continue to be analyzed.
5. Are there any other topics that we should consider in finalizing our strategic plan?
We have included the following topics in our response to questions 1-4:
• Public confidence in the profession
o Working with reviewers, such as CPAB, Provincial Institutes, etc.
o Target compliance rates
o Fraud risk and required fraud procedures
Thank you for the opportunity to comment.
Sincerely,
Colin Semotiuk
Ian SneddonOAG Canada [French] Le 15 avril 2021 M. Eric Turner, FCPA, FCA Directeur, Conseil des normes d’audit et de certification 227, rue Wellington Ouest Toronto (Ontario) M5V 3H2 Objet : Document de consultation - Projet de plan stratégique 2022-2025 Monsieur Turner, Nous vous remercions de l’opportunité de pouvoir commenter le plan stratégique du Conseil des normes d’audit et de certification (CNAC). Je réponds pour le Bureau du Vérificateur Générale du Canada. Nos réponses aux diverses questions demandées dans le document de consultation sont incluses ci-dessous. Veuillez agréer, Monsieur, mes sincères salutations. Lissa Lamarche Vérificatrice générale adjointe 240, rue Sparks Ottawa (Ontario) K1A 0G6
-2-
1. Approuvez-vous la mission du CNAC? Dans la négative, quels changements
devrions-nous y apporter?
Nous approuvons et supportons la mission du CNAC.
2. Êtes-vous d’accord que les orientations stratégiques définies par le CNAC sont
appropriées? Si non, quels ajouts ou changements suggérez-vous d’apporter à
ces orientations?
Nous sommes d’avis que les orientations stratégiques définies par le CNAC sont en grande
partie appropriées. Nous aimerions cependant suggérer les modifications suivantes :
Le thème ambiant « La complexité croissante et ses répercussions » met l’emphase sur le
rythme rapide des changements et de l’importance de réagir en temps opportun. Or l’énoncé
stratégique; « tenir compte dans les normes et indications de la complexité croissante de
l’environnement » ne fait aucunement mention de l’importance d’être en temps opportun. Nous
sommes d’avis que la publication des normes en temps opportun est cruciale et suggérons
d’ajouter cet élément dans l’énoncé d’orientation stratégique.
De plus, nous sommes d’avis que l’orientation stratégique « étudier l’effet du travail à distance
sur l’application des normes et indications » (Understand and assess the impact of a remote
working environment on our standards and guidance) est passif et ne démontre pas que le
CNAC réagi activement à l’environnement actuel. Ainsi, l’utilisation de terminologie plus active
telle que « continuer l’analyse des impacts du travail à distance ou bien comprendre les défis de
l’application des normes dans un environnement de travail virtuel» démontrerait un rôle plus
actif.
3. Approuvez-vous les buts et objectifs proposés? Si non, quels ajouts ou
changements suggérez-vous d’apporter à ces buts ou objectifs?
Nous approuvons les buts et objectifs proposés. Nous aimerions cependant porter à votre
attention l’élément suivant :
Le but #4 : améliorer les processus et capacités de normalisation du CNAC afin d’élaborer des
solutions plus rapidement. Le CNAC est dépendant de l’IAASB pour une grande partie de ses
activités de normalisation. Les projets de normalisation de l’IAASB peuvent parfois prendre
plusieurs années à être finalisés. Nous croyons qu’il serait pertinent d’inclure le lien de
dépendance dans le but numéro 4 et comment le CNAC compte aborder la rapidité des
activités de normalisation compte tenu de ce lien.
4. 4. Y a-t-il des faits nouveaux, autres que ceux mentionnés dans le présent
document, qu’il faudrait peut-être prendre en compte avant de finaliser le plan
stratégique? Dans l’affirmative, veuillez fournir des précisions et indiquer
l’incidence attendue de ces faits nouveaux sur les parties prenantes canadiennes.
Nous n’avons aucuns autres faits nouveaux à suggérer.-3-
5. Y a-t-il d’autres sujets que nous devrions examiner avant de finaliser notre plan
stratégique?
Nous n’avons pas d’autres sujets à suggérerYou can also read
