53. How will communications with those charged with governance and management be different under the CASs?

The nature and extent of differences in communications with management and the audit committee from prior years will depend on the circumstances of the entity. The CASs contain several new or significantly changed auditing standards that may have implications for management and the audit committee to the extent they are relevant to the audit of that entity, for example:

Canadian Auditing Standard (CAS) 550, Related Parties, is more explicit in how the auditor communicates matters concerning related parties. The level of communication with the audit committee is beyond what is required by current standards. For example, the auditor is required to communicate with the audit committee nondisclosure by management to the auditor of related parties or significant related-party transactions. The auditor is also required to obtain written representations from management, and where appropriate, the audit committee with respect to related party relationships and transactions and their accounting and disclosure in the financial statements.

CAS 600, Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors), has broader application than current standards and contains more extensive requirements. There are specific requirements for the group auditor to communicate with the group audit committee and management regarding such things as deficiencies in internal control that are group wide or specific to components of the entity, and fraud.

CAS 570, Going Concern, requires the auditor to evaluate management’s assessment of the entity’s ability to continue as a going concern and perform specific procedures if events or conditions have been identified that may cast significant doubt about the entity’s ability to continue as a going concern, including evaluating management’s plans for future actions and communicating with the audit committee.

It is important to understand how the new CASs will change the audit in an entity’s specific circumstances as this will affect the assistance the auditor requires from management in conducting an efficient audit. It will also affect the nature and extent of communication between the auditor and the audit committee relating to specific aspects of the audit.