CM Autumn Template - Institute of Chartered Accountants of Ontario

(From page 19)
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ADVISORY NEWS
Update of PEM and QAM for new
Canadian Auditing Standards
The adoption of Canadian Auditing Standards (CAS), which
are effective for audits of financial statements for periods
ending on or after December 14, 2010, requires changes to
guidance material to ensure that it remains relevant and
helpful. The following provides a brief update on the progress
of updating and revising the CICA’s Quality Assurance
Manual (QAM) and Professional Engagement Manual (PEM).
QAM
Update #3 to QAM will address the new Canadian
Standard on Quality Control release entitled Quality Control
for Firms That Perform Audits and Reviews of Financial
Statements and Other Assurance Engagements (CSQC 1).
The effective date of this standard is December 15, 2009.
The development of revised material for this update is well
underway. The revised guidance will address several
important aspects of the CSQC 1, including:
• Timing of the file quality review
• Monitoring process
• Division of the monitoring process into two parts:
ongoing and the cyclical inspection of a selection of
completed engagement files
• Span of the monitoring cycle
• Documentation of the monitoring
This update is expected to be finalized and released to
QAM subscribers by early December.
PEM
The news on PEM is much the same, except the challenge
is significantly greater. Not only does the guidance need to
address all of the changes made to the standards, but the
forms, worksheets and other tools provided also need to
be reviewed and modified to ensure that they remain
appropriate and relevant.
The initial process in the development of the revised
material has been completed. A draft of the updated and
revised manual is going through our review and quality
control processes, which should be completed by the end
of November. The results of the review process will
determine the timing of the release to PEM subscribers, but
we currently expect it will be available in the spring of
2010. We will provide further updates as we proceed
through the review process.
We will also keep you updated regarding significant
changes being made to the manual. One change that has
been made is to rename PEM. To reflect the fact that the
new manual is based on the CAS, and to differentiate it
from the existing guidance material, the name of the new
edition of PEM is the Canadian Professional Engagement
Manual (C*PEM). Watch for it in 2010!
Update from Small Practices
Advisory Committee
The Institute’s Small Practices Advisory Committee met in
late September. The key items on the agenda included
private enterprise GAAP and licensing.
The Committee is pleased to report that the private enterprise
GAAP standards will be finalized by the Accounting Standards
Board (AcSB) in the very near future. During the Exposure
Draft (ED) period in the summer of 2009, the Committee
undertook an awareness and informational campaign through
a series of e-mails to their fellow small practitioners, which
included the content of the Committee’s submission to the ED
for their reference. It is likely no coincidence that many of the
responses to the ED submitted by Ontario members contained
some or all of the Committee’s recommendations. More
importantly, the final standards included all of the Committee’s
significant recommendations. The Committee would like to
thank their fellow small practitioners for their participation. To
facilitate the transition, the Committee has recently
recommended that the Institute provide professional
development courses on the new standards.
Regarding licensing, the Committee expressed concerns
over the current public accountancy licence renewal
process. They believe that the current hour-based
requirements are too narrowly focused given the practical
realities of the profession, and place too much emphasis
on quantity rather than quality. They believe this will
adversely affect the ability and interest of many small
practitioners, who are otherwise qualified, to renew their
licence. The Committee developed a number of
recommendations and will continue to work with the
Institute on this issue.
In other matters, the Committee consulted with the
Institute’s Government Affairs area to advance the issue of
allowing non-members to become shareholders of a
member’s professional corporation. As well, staff from the
Institute’s CA Training Offices area briefed the Committee
on changes to the practical experience requirements as
they relate to sole practitioners and small CA firms. The
Committee will closely monitor developments on these
matters.
CheckMark • Autumn 2009
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