The Canadian Bar Association and Auditing and Assurance Standards Board (AASB) are working together to adapt the Joint Policy Statement on Audit Enquiries (JPS), in light of pending new International Financial Reporting Standards (IFRS).
IFRS are scheduled to come into effect in Canada, starting in December 2010. IFRSs will affect the JPS in two ways. First, different accounting frameworks will be available for entities to use depending on whether they are publicly accountable enterprises, private enterprises, not for profit organizations or governments. Second, the reporting standard for contingencies will change.
In January 2010, International Accounting Standards Board proposed amendments to IAS 37 that would change the reporting standards for contingencies. With the reporting standards in the air, the CBA/AASB task team is issuing this Interim Guidance on how to deal with audit inquiries under IFRS, rather than changing the JPS twice in short succession. Once IAS 37 is settled, negotiations will continue to update JPS, to reflect the reporting standards on contingencies while maintaining solicitor-client privilege.
This Interim Guidance applies only for financial statements prepared in accordance with IFRS and in the limited circumstances described under Scope and Purpose in the Interim Guidance. In these circumstances, communications with law firms continue to be governed by the JPS, taking into account the additional matters discussed in the Interim Guidance. In all other circumstances, communications with law firms continue to be governed by the JPS in its current form. Inquiry letters to law firms and responses from law firms should continue to reference the JPS and indicate whether or not this Guideline applies.
AASB and CICA Resources
