ACCT*4440 W23

IAP substitute #2:

Due at the beginning of class on Monday, January 18, 2023
(Copy and paste your answers below and submit to IAP 2 Drop Box)

1. Why are the assurance standards split into “Canadian Auditing

Standards” and “Other Canadian Standards”?
- The difference between ‘Canadian Auditing Standards’ and ‘Other Canadian
Standards’ is that the first one relates to financial statements audits, and on
the other hand, the second one is related with other things rather than audit

2. Scan down the list of the Canadian Auditing Standards. Are they
organized in a particular way? Describe it.
- The designations for the Canadian Auditing Standards range from CAS 200
up to CAS 810.

3. Find the standard which includes the description of the audit report.
List the section number and copy the report subheadings
- The audit report's description can be found in CAS 700, Forming an Opinion
and Reporting on Financial Statements.

- Auditor's Report
20. The auditor's report shall be in writing. (Ref: Para. A18-A19)
Auditor's Report for Audits Conducted in Accordance with Canadian
Auditing Standards
Title

21. The auditor's report shall have a title that clearly indicates that it is the
report of an independent auditor. (Ref: Para. A20)
Addressee

22. The auditor's report shall be addressed, as appropriate, based on the

circumstances of the engagement. (Ref: Para. A21)
Auditor's Opinion
23. The first section of the auditor's report shall include the auditor's
opinion and shall have the heading "Opinion."

24. The Opinion section of the auditor's report shall also:

(a) Identify the entity whose financial statements have been audited;
(b) State that the financial statements have been audited;
(c) Identify the title of each statement comprising the financial statements;
(d) Refer to the notes, including the summary of significant accounting
policies; and
(e) Specify the date of, or period covered by, each financial statement
comprising the financial statements. (Ref: Para. A22-A23)

25. When expressing an unmodified opinion on financial statements

prepared in accordance with a fair presentation framework, the auditor's
opinion shall, unless otherwise required by law or regulation, use one of the
following phrases, which are regarded as being equivalent:
(a) In our opinion, the accompanying financial statements present fairly,
in all material respects, [...] in accordance with [the applicable financial
reporting framework]; or
(b) In our opinion, the accompanying financial statements give a true and
fair view of [...] in accordance with [the applicable financial reporting
framework]. (Ref: Para. A24-A31)

26. When expressing an unmodified opinion on financial statements

prepared in accordance with a compliance framework, the auditor's opinion
shall be that the accompanying financial statements are prepared, in all
material respects, in accordance with [the applicable financial reporting
framework]. (Ref: Para. A26-A31)

27. If the reference to the applicable financial reporting framework in the

auditor's opinion is not to IFRSs issued by the International Accounting
Standards Board or IPSASs issued by the International Public Sector
Accounting Standards Board, the auditor's opinion shall identify the
jurisdiction of origin of the framework.
4. Which standards give guidance on setting performance materiality.
Copy the guidance and the related benchmark, if applicable
- Setting performance materiality is explained in detail in the CAS 320
Materiality in Planning and Performing an Audit.

- Performance Materiality (Ref: Para. 11)

A13. Planning the audit solely to detect individually material misstatements
overlooks the fact that the aggregate of individually immaterial
misstatements may cause the financial statements to be materially misstated
and leaves no margin for possible undetected misstatements. Performance
materiality (which, as defined, is one or more amounts) is set at less than
materiality for the financial statements as a whole to reduce aggregation risk
to an appropriately low level. Similarly, performance materiality relating to
a materiality level determined for a particular class of transactions, account
balance or disclosure is set to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
in that particular class of transactions, account balance or disclosure exceeds
the materiality level for that particular class of transactions, account balance
or disclosure. The determination of performance materiality is not a simple
mechanical calculation and involves the exercise of professional judgment.
It is affected by the auditor’s understanding of the entity, updated during the
performance of the risk assessment procedures; and the nature and extent of
misstatements identified in previous audits and thereby the auditor’s
expectations in relation to misstatements in the current period. [Former
paragraph 320.A13 retained in Archived Pronouncements.]

5. Where does one find guidance on “special reports” that require

reasonable assurance (find two standards)? Negative assurance (find
one standards)? No assurance (find one standard)?
- Canadian Auditing Standard (CAS) 800, Special Considerations — Audits
of Financial Statements Prepared in Accordance with Special Purpose
Frameworks
o 2. CSAE 3531, Direct Engagements to Report on Compliance

- Negative assurance:
o Other Canadian Standards > Specialized Areas (section 7060-
7600)>7200 Auditor Assistance to Underwriters and others
- No assurance
o Other Canadian Standards>Specialized Areas (section 7060-
7600)>7200 Auditor Assistance to Underwriters and Others
 the scope and nature of the audit by the auditor

6. Check the consent document by PWC (posted on CourseLink under

CL3). What is the authoritative standard/pronouncement that this
consent is subject to?

- According to the CPA Canada Handbook – Assurance, this approval is

headed by Canadian Generally Accepted Standards for the use of audit
reports in offering documents and does not count as an audit or review of
disclosure documents.