Methodology Update—Fall 2020 Accounting Update
Nov-2020

Target Audience: All Attest Auditors

Effective Date: The revised methodology is effective upon release.

Standards: This update reflects changes in standards effective for fiscal years beginning on or after 1 January 2020 (IFRS) and 1 April 2020 (PSAS).

Copyright: CPA Canada Handbook sections and excerpts are reproduced herein for your non-commercial use with the permission of The Chartered Professional Accountants of Canada (“CPA Canada”). These may not be modified, copied or distributed in any form as this would infringe CPA Canada’s copyright.

Description of subject: The update includes changes to TeamMate procedures, templates, checklists and INTRAnet pages. Significant changes to the methodology are summarized below.

Key changes are:

PSAS and IFRS

  • For existing procedures that included a step on auditing accounting estimates, updated the reference to refer to the new CAS 540 procedures “Test accounting estimate” and “Accounting estimates-Understanding and risk assessment”; and
  • New format for the risk matrices.

PSAS

  • Reinstatement of a procedure for contaminated sites.

 IFRS

  • Improvements to better align with the requirements in IFRS 15,
  • Updated procedures related to interest rate benchmark reform,
  • Removal of the IFRS 16 adoption procedures and related guidance.

IMPORTANT—Remember to update the Substantive Procedure Library in the Audit Planning Template in order to ensure you are using the most up to date IFRS and PSAS substantive procedure libraries.

Updates to TeamMate

The procedures in the TeamMate Cabinets have been updated as follows:

PSAS

  • Reinstatement of the procedure “Understand and evaluate accounting policies—Liability for contaminated sites”.

For a complete list of impacted procedures and FSLIs, please refer to the PSAS Inventory of Procedures report.

IFRS

  • Revision of procedures affected by new and amended accounting standards effective for fiscal years beginning on or after 1 January 2020:
    • Updated procedures related to interest rate benchmark reform (amendments to IFRS 9, IAS 39 and IFRS 7).
  • Other revisions not a result of changes in standards:
    • Improvements made to certain IFRS 15 procedures (updated steps to better reflect the specific requirements in IFRS 15); and
    • Updates to align with the new OAG Audit Manual section on Inventory (OAG Audit 7069).

For a complete list of impacted procedures and FSLIs, please refer to the IFRS Inventory of Procedures report.

Annual Audit Procedures—Supplement

  • Addition of a program and audit procedures related to COVID-19. These procedures were previously published on the INTRAnet.
  • The procedure “Evaluation of and Audit Response to Impact of Coronavirus Pandemic” published in October 2020 replaces the April 2020 version “Revised Risk Assessment or Assessing the Impact of COVID 19”.

Updates to Templates and Checklists

The following “Templates and Checklists” have been updated. They can also be obtained on the Templates and Checklists page on the INTRAnet.

FSLI risk matrices

The PSAS and IFRS FSLI risk matrices have been redesigned and presented in a new user friendly format. Key changes include:

  • Instead of a tab for each FSLI, all FSLIs appear on one tab with the ability to filter by various fields;
  • A series of standard pivot tables are provided to help filter the data in various ways;
  • Auditors can create custom pivot tables to meet their needs.

The risk matrix is intended to be a quick reference tool which lists the procedures available in the TeamStore cabinet and aligns them to the typical risks for each FSLI by assertion.

Accounting Standards Compliance Checklists

There were no changes to the PSAS and GNFPO Presentation and Disclosure checklists and Recognition and Measurement checklists.  The latest IFRS checklists can be found on the Templates and Checklists page.

Updates to INTRAnet

The Financial Audit INTRAnet pages reflect the changes included in this Methodology Update.