Candian Auditing Standard
1. Executive Summary
The new Canadian Auditing Standards (CASs) are adopted for audits of financial statements in Canada and becomes effective for periods ending on or after December 14, 2010. The structure of audit remains the same under CASs. However, some requirements are differently from before. The purpose of this report is to evaluation the changes of CASs. This paper compares the standards between Canadian General Accepted Auditing Standards (GAAS) and Canadian Auditing Standards (CASs). The report discusses the five changed standards and analysis the implication for auditing and accounting, including CAS 210, CAS 260, CAS 550, CAS600 and CAS 700. The new standard permits auditors to express opinions on the financial statements that are prepared in accordance with any acceptable financial reporting framework. It increases conversation between auditors, those charged with governance and related parties. And the form of the audit report under CASs is consistent with many global jurisdictions and provides increased clarity as to the roles of management and auditor in the audit of the financial statements. After analyzing the differences between the two standards, there are more requirements under CASs that need auditors to improve the quality and timing of the audit procedures. Auditors should take time to read and understand standards and figure out which standards and requirements are relevant to your audit. Accordance on analysis, it is recommended that CASs because of it provides more appropriate guidance to assist auditors to perform audit work. Adoption of CASs reduces audit risk, improves audit efficient and better satisfies the needs of users. 2. Introduction
Auditors across Canada have been following new auditing standards for audits of financial statements. The new auditing standards have been adopted by the Canadian Auditing and Assurance Standards Board (AASB) and are based on International Standards on Auditing (ISAs) as Canadian Auditing Standards (CASs). The new auditing standards apply to audits of all entities, including publicly accountable entities, private enterprises and not-for-profit organizations. The purpose of this report is to evaluation the changes of CASs. This paper is to identify the adoption of ISAs as CASs for the financial statement auditing in Canada. This report will compare the standards between Canadian General Accepted Auditing Standards (GAAS) and Canadian Auditing Standards (CASs). To discuss the five changed standards, analysis the implication for auditing and accounting. This paper is significant because in any organization whose financial statements are subject to audit, the board of directors is responsible for overseeing the audit process. The audit process in Canada changed. The directors should to have an understanding of the changes and work with their auditors to ensure a smooth transition. The limitation is the new Canadian Auditing Standards is effect for audit of financial statements for periods ending on or after December 14, 2010. The potentially benefit from this paper is all financial statements auditors in Canada. The audited financial statements are prepared by management with oversight from the audit committee. So the preparers also beneficiaries from this paper who should know about the new Canadian Auditing Standards.
With the trend of countries working towards convergence with International Financial Reporting Standards, there is inevitable trend towards convergence with International Standards on Auditing issued by International Auditing and Assurance Standards Board (IAASB). Today more than 100 countries have already adopted ISAs or are in the process of doing it. In Canada, The AASB believes that convergence with ISAs is the best option for the future of standard setting in Canada. In November 2005, the AASB issued an Invitation to Comment which proposed that Canada adopt ISAs issued by...
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