Methodology Update—Fall 2022 Accounting Update
Nov-2022

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 2022 (IFRS) and 1 April 2022 (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

  • Deleted “Understand and evaluate accounting policies” procedures as these have been replaced with procedure “Understand business process and accounting policies - [Business process]” found in the Annual Audit cabinet

PSAS

  • New procedure on the adoption of new standard PS 3280—Asset Retirement Obligations

Annual Audit Procedures Cabinet

  • Two procedures “Update preliminary risk assessments” and “Assess impact of interest rate benchmark reform” have been updated to reflect the revised CAS 315 Identifying and Assessing the Risks of Material Misstatement (CAS 315R)

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 IFRS and PSAS Cabinets

The procedures in the IFRS and PSAS Cabinets have been updated as follows:

PSAS

The PSAS procedures included in TeamMate library cabinets and on your C Drive have not been updated. The complete list of impacted procedures and FSLIs related to this methodology update, including PROxI links to impacted procedures, can be found in the PSAS Inventory of Procedures report.

IFRS

Revision not a result of changes in standards:

The IFRS procedures included in TeamMate library cabinets and on your C Drive have not been updated. The complete list of impacted procedures and FSLIs related to this methodology update, including PROxI links to impacted procedures, can be found in the IFRS Inventory of Procedures report.

Annual Audit Procedures

The procedures included in TeamMate library cabinets and on your C Drive have not been updated. The new and updated procedures related to this methodology update can be found in PROxI document 2077926. It is important that teams make sure they have updated their file with procedures found in the PROxI document in order to be CAS 315R compliant.

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 updated to reflect the new and revised procedures in the PSAS and IFRS cabinets and new and revised risks relative to each FSLI. The risk matrix is intended to be a quick reference tool which lists the procedures available and aligns them to the typical risks for each FSLI by assertion.

Accounting Standards Compliance Checklists

The IFRS Presentation and Disclosure Checklists have been updated to provide links to the latest checklists published by the audit firms.

The PSAS and GNFPO Presentation and Disclosure and Recognition and Measurement Checklists have also been updated to reflect upcoming changes in standards.

The latest checklists can be found on the Templates and Checklists page.

Management Representation Letters

The Management Representation Letter – IFRS and Management Representation letter – PSAS have been updated to include a new section for the military conflict between Russia and Ukraine.

The Management Representation Letter – IFRS has been updated for an amendment to onerous contracts in IAS 37—Provisions, Contingent Liabilities and Contingent Assets

The Management Representation letter – PSAS has been updated to remove wording if the entity has not adopted PS 3450 Financial Instruments.

Report to the Audit Committee—User Guide for Completing the Annual Audit Plan

The Report to the Audit Committee—User Guide for Completing the Annual Audit Plan has been updated. The main changes are:

  • New significant audit risk for Climate-related risks has been added;
  • Existing COVID-19 wording has been updated to the current environment

Sub-Account Scoping Template

A new optional sub-account scoping template has been added for audit teams to document their conclusions with respect to the selection of populations to test.

New Accounting Standards or Amendments

The New Accounting Standards or Amendments page has been updated for Entity Preparedness Dashboards and new reference material.

Updates to INTRAnet

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