 Copyright
Notice to Readers  What's New
Guide to Accounting Pronouncements and Sources, Sixth Edition
Significant Differences in GAAP in Canada, Chile, Mexico and the United States
Accounting and Reporting for Enterprises in the Development Stage
Accounting Bases Used in Canadian Government Budgeting
Accounting Changes Background Information and Basis for Conclusions Section 1506
Accounting for Infrastructure in the Public Sector
Accounting for Tangible Capital Assets Accrual Budgeting Issues
Accrual Budgeting by Canadian Federal, Provincial and Territorial Governments
Aligning Investment in Information Technology with Business Strategy: What CFOs Need to Consider (June 2005)
Application of Computer-assisted Audit Techniques, Second Edition
Assessing Risks & Controls of Investment Funds
Asset Retirement Obligations - Background Information and Basis for Conclusions Section 3110
Assurance Engagement Working Papers
Audit & Control Implications of XBRL
Audit Enquiry - Seeking More Reliable Evidence From Audit Enquiry
Audit Implications of EDI
Audit Implications of Electronic Document Management
Audit of a Small Entity
Audits of Non-profit Organizations
Canadian Performance Reporting
Cash Distributions Amendments to Section 1540 Background Information and Basis for Conclusions (September 2007)
Cash Flow and Other Per Share Information - Background Information and Basis for Conclusions Sections 1540 and 3500
Cash Flow Statements - Background Information and Basis for Conclusions - Section 1540
Comprehensive Income and Equity - Background Information and Basis for Conclusions Sections 1530 and 3251
Confirmation of Accounts Payable
Confirmation of Accounts Receivable
Continuous Auditing
Corporate Reporting to Stakeholders
Costing Government Services for Improved Performance Measurement & Accountability
Data Level Assurance
Differential Reporting - Background Information and Basis for Conclusions - Section 1300
Differential Reporting Amendments to Section 3062 and AcG-15 Background Information and Basis for Conclusions
Disclosures by Entities Subject to Rate Regulation - Background Information and Basis for Conclusions AcG-19
Disposal of Long-Lived Assets and Discontinued Operations - Background Information and Basis for Conclusions - Section 3475
Electronic Audit Evidence
Electronic Filing and Reporting - Emerging Technologies and Their Implications
Electronic Filing of Information
Employee Future Benefits - Additional Disclosures - Background Information and Basis for Conclusions - Section 3461
Employee Future Benefits Implementation Guide, Second Edition (Updated November 2001)
Engagements to Audit Greenhouse Gas Emissions Information Practice Guide
Financial Instrument Disclosures and Capital Disclosures - Background Information and Basis for Conclusions Sections 1535, 3862 and 3863 (July 2007)
Financial Instruments - Recognition and Measurement - Background Information and Basis for Conclusions Section 3855
Financial Instruments Recognition and Measurement Background Information and Basis For Conclusions Amendments to Section 3855 (December 2009)
Financial Reporting by Canadian School Boards
Financial Reporting by Investment Funds, Second Edition
Financial Reporting by Rate-regulated Enterprises
Financial Reporting by Small Business Enterprises
Financial Reporting in North America - Highlights of a Joint Study
The First Audit Engagement
Full Cost Accounting from an Environmental Perspective
General Standards of Financial Statement Presentation - Background Information and Basis for Conclusions - Section 1400
Generally Accepted Accounting Principles - Background Information and Basis for Conclusions - Section 1100
Going Concern - Amendments to Section 1400 - Background Information and Basis for Conclusions (June 2007)
Guide for Developing Quality Control Systems in Public Accounting
Hedges - Background Information and Basis for Conclusions Section 3865
The Impact of Technology on Financial and Business Reporting
Impairment of Long-Lived Assets - Background Information and Basis for Conclusions - Section 3063
Improving Disclosures About Financial Instruments (Amendments to Financial Instruments Disclosures, Section 3862) (June 2009)
Income Taxes - Background Information and Basis for Conclusions - Section 3465
Indicators of Government Financial Condition
Intangible Assets Background Information and Basis for Conclusions Section 3064 (September 2008)
Interactive Data Building XBRL Into Accounting Information Systems
Interim Financial Statements - Background Information and Basis for Conclusions - CICA Handbook Accounting Section 1751
Inventories - Background Information and Basis for Conclusions Section 3031 (June 2007)
Investment Companies - Background Information and Basis for Conclusions - AcG-18
Investment Companies - Amendments to AcG-15 and AcG-18 - Background Information and Basis for Conclusions (June 2007)
Liabilities and Equity - Background Information and Basis for Conclusions - Section 3860
Links between the Budget and the Estimates Accrual budgeting Issues
Maintaining Quality Capital Markets Through Quality Information
Non-Monetary Transactions - Background Information and Basis for Conclusions Section 3831
Not-for-Profit Financial Reporting Guide
Not-for-Profit Organizations Background Information and Basis for Conclusions 4400 Series (November 2008)
Professional Judgment and the Auditor
Rate-Regulated Operations Amendments to Sections 1100 and 3465 and AcG-19 Background Information and Basis for Conclusions (December 2007)
Reporting on Environmental Performance
The Role of Information Technology in Achieving Sustained Regulatory Compliance
Secure IT Infrastructure for E-commerce
Security for Wireless Systems (revised)
Segment Disclosures - Background Information and Basis for Conclusions - CICA Handbook Section 1701
Stakeholder Relationships, Social Capital and Business Value Creation
Understanding Disclosure Controls and Procedures: Helping CEOs and CFOs Respond to the Need for Better Disclosure
 Use of Specialists in Assurance Engagements
Foreword Study Group Acknowledgments Executive Summary Introduction A Story From the Past Critical Terminology Background How to use this Report Research Methodology and Scope of the Report Research Methodology Scope of the Report Chapter 1 Current and Future Practice Current State Assurance Standards and Guidance Auditing Standards Concerning Use of Specialists Supplementary Auditing Guidance Published by Standard-setting Bodies Public Sector Guidance Assurance Standards and Guidance Beyond Financial Information Overview of Standards and Guidance Current State Practice in the Private and Public Sectors Private Sector Public Sector Use of Specialists in Assurance Future Directions Indicators and Current Initiatives Potential Future Use of Specialists Environmental audits Social responsibility audits Performance audits generally Conclusions Recommendation 1 Chapter 2 General Issues for Consideration Introduction to Issues Issue 1 Role and Competencies of an Assurance Provider Generic and Subject Matter Competencies Background Professionalism Generic Competencies Scepticism Evidence gathering and evaluation Judgment in assessing significance and risk A process and systems approach to obtaining assurance Rigorous documentation practices Report-writing skills Conclusion Recommendation 2 Issue 2 Limits on Acceptance of Assurance Engagements Are There Limits? Subject Matter Expertise in Audits of Financial Statements Subject Matter Expertise in Other Assurance Engagements Conclusion Recommendation 3 Issue 3 Business Risk and Legal Issues Concerning Use of Specialists Background Business Risk Legal Risk Mitigation of Risk Factors that Influence Legal Risk Some Cases Relating to Use of a Specialist Conclusions Issue 4 Level of Understanding Needed of the Specialty by the Assurance Provider Introduction Guidance and Practice Professional guidance Practice in the field Question 1 To What Extent Must the Assurance Provider Understand the Specialist's Specialty? Question 2 What Needs to be Understood to Evaluate the Specialist's Work and Findings? Question 3 How Can the Assurance Provider Obtain the Necessary Understanding? Conclusions Recommendation 4 Issue 5 Use of Specialists in Moderate Assurance Engagements Background When to Use a Specialist in a Moderate Assurance Engagement Conclusions Recommendation 5 Chapter 3 Engagement set-up and Planning Issue 6 When and where to use a specialist When to Use a Specialist Where to Use a Specialist Conclusions Recommendation 6 Issue 7 Selecting a Specialist When the Specialist Needs to be Independent How to Select a Specialist When the Specialist Needs to be Independent Conclusions Recommendation 7 Issue 8 The Specialist's Qualifications Background Assessing Qualifications Professional and other accreditations The specialist's experience The specialist's reputation for integrity and competence The specialist's objectivity and independence policies and practices Knowledge of the particular subject matter Resources available to the specialist Other Matters Client-employed specialists Assurance provider-employed specialists Conclusion Recommendation 8 Issue 9 Objectivity and Independence of Specialists Objectivity and Independence Assessing the Independence of an Independent Specialist Assessing the Independence of a Client-employed Specialist Conclusion Recommendation 9 Issue 10 Use of Specialists in Multidisciplinary Teams Definition Authoritative Guidance Practice Team Leadership the Role of the Assurance Provider Source of Specialist Team Members Practical Issues Relating to Successful Multidisciplinary Teams in Assurance Engagements Advantages and Disadvantages of Employing Specialists as Part of the Assurance Team Conclusions Recommendation 10 Issue 11 Confidentiality Confidentiality of Client Information Confidentiality of Assurance Provider Information Conclusions Recommendation 11 Issue 12 Documentation Issues and Ownership and Review of the Specialist's Working Papers Assurance Provider Documentation Specialist Documentation Ownership and Review of, and Access to, the Specialist's Working Papers Ownership of the specialist's working papers Review of the specialist's working papers Access to specialist's working papers Conclusions Recommendation 12 Issue 13 Use of Internal Auditors Background Use of Internal Auditors as Subject Matter Specialists Delegating Work to Internal Auditors Special Considerations Conclusions Recommendation 13 Issue 14 The Specialist's Understanding of the Assurance Provider's Objectives and Standards Background Importance of the Specialist's Understanding Conclusions Recommendation 14 Issue 15 Matters the Assurance Provider and the Specialist Need to Agree On (Terms of Engagement) Background Authoritative Guidance General audit guidance Guidance re use of actuaries Written vs. Oral Terms of Engagement Matters to be Agreed on with the Specialist (Content of a Specialist Engagement Letter, if Any) Conclusions Recommendation 15 Chapter 4 Engagement Performance Issues Issue 16 Use of a Specialist to Gain Knowledge of the Client's Business Background Range of Use of Specialists in Gathering Client and Industry Data Recommendation 16 Issue 17 Significance (Materiality) and Engagement Risk Considerations Background Specialist Application of the Concepts of Significance and Engagement Risk Significance Engagement risk Making a Combined Significance and Risk Assessment Associated with Use of a Specialist Assessment of significance of the specialist's involvement Assessment of the risk associated with the specialist's involvement The combined assessment of significance and risk as it relates to the use of a specialist Work Effort Required to Confirm the Combined Significance and Risk Assessment Conclusions Recommendation 17 Issue 18 Use of a Specialist When Assessing or Developing Suitable Criteria Background An Example Environmental Performance Criteria Conclusion and Recommendation 18 Issue 19 Testing Source Data for a Specialist's Work Background The Assurance Provider's Procedures Concerning a Specialist's Source Data The appropriateness of the source data Tests of data obtained by a specialist from the client Tests of data obtained by a specialist from outside the client Conclusions Recommendation 19 Issue 20 Procedures Performed on the Specialist's Work and Findings Background Overview of Extent of Work Necessary 1. Generally assess the appropriateness and reliability of the source data through enquiry 2. Test source data, particularly client-sourced data 3. Understand the specialist's methods, assumptions and criteria 4. Review and evaluate the specialist's report / findings 5. Test the specialist's application of methods, criteria and assumptions, and findings through intensive enquiry 6. Test the specialist's application of methods, and criteria and assumptions, through performance of corroborating procedures or reperformance on a test basis 7. Review relevant parts of the specialist's documentation 8. Test the specialist's findings with reference to the specialist's procedures 9. Engage a second specialist to corroborate work or findings of the specialist Conclude on the Specialist's Findings (and Report, if Any) and Relate to the Assurance Provider's Conclusion on the Subject Matter of the Assurance Engagement Special Considerations when the Specialist is Employed by the Client Recommendation 20 Chapter 5 Reporting Issues Issue 21 Reference to the Specialist in the Assurance Provider's Report Background Reference in the Absence of a Reservation of Conclusion Professional guidance Distinction between long and short-form reports Nature of disclosures concerning specialists Clearing report references to a specialist with such specialist An example Reference When There is a Reservation of Conclusion Reservation when the subject matter does not conform with the criteria Scope reservation Specialist employed by the assurance provider's firm Specialist employed by the client Appendix IV Recommendation 21 When there is no reservation: When there is a reservation that relates to use of a specialist: In all cases when the assurance provider refers to a specialist in the report: Issue 22 Joint and Divided Responsibility Reporting Background Joint Reporting Divided Responsibility Reporting Advantages and disadvantages of divided responsibility reports Legal ramifications of divided responsibility reports Effect on user credibility A variant of divided responsibility reporting dual reporting Conclusions and Recommendation 22 Issue 23 Standards for the Specialist's Report Background Professional Standards Contents of a Specialist's Report When the specialist issues a formal report When the specialist is a member of the assurance provider's team Recommendation 23 Chapter 6 Guidance for Assurance Providers Introduction Guidance Engagements to Provide a High Level of Assurance A. Define the Need for a Specialist, Identify Potential Specialists and Select One or More Who Are Suitable for the Objectives of the Assurance Engagement 1. Identify need in relation to the scope of the assurance engagement. 2. Obtain a general understanding of the specialty, the nature of any relevant professional bodies and any authoritative relevant standards. 3. Conclude whether the specialist needs to be independent of the client, whether such specialist has already been engaged by the client to report on the relevant subject matter, and whether an assurance provider-employed specialist is appropriate. 4. Select a specialist and discuss willingness to be involved, and availability. B. Set up the Engagement 1. Ensure that the client agrees with the assurance provider using a specialist and will be willing to permit the specialist access to confidential information. 2. Assess the qualifications of the specialist, including licences, accreditations and testimonials, reputation for competence and integrity, independence and objectivity, knowledge of the subject matter and resources available. 3. Agree on the nature and timing of the specialist's involvement. 4. Determine any involvement of the client's internal auditors. 5. Finalize the terms of engagement between the assurance provider and the specialist and assess whether they need to be in writing. 6. Agree on the specialist's work plan. C. Make a Combined Risk Assessment Relating to the Specialist's Involvement in the Engagement D. Determine the Work Effort Required to Confirm the Risk Assessment E. Determine the Work Effort Required Concerning the Specialist's Work and Findings F. Conclude on the Specialist's Findings (and Report, if Any) and Relate to the Assurance Provider's Conclusion on the Subject Matter of the Assurance Engagement G. Wrap up the Engagement Guidance Engagements to Provide a Moderate Level of Assurance Chapter 7 Recommendations Introduction Recommendations Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 4 Recommendation 5 Recommendation 6 Recommendation 7 Recommendation 8 Recommendation 9 Recommendation 10 Recommendation 11 Recommendation 12 Recommendation 13 Recommendation 14 Recommendation 15 Recommendation 16 Recommendation 17 Recommendation 18 Recommendation 19 Recommendation 20 Recommendation 21 When there is no reservation: When there is a reservation that relates to use of a specialist: In all cases when the assurance provider refers to a specialist in the report: Recommendation 22 Recommendation 23 Appendix I Typical Circumstances for Using Specialists 1. Client-Employed Specialists A Informal Use in Non-critical Areas, such as Obtaining Knowledge of the Client's Business B Substantive Use in Important Areas such as Inventory Valuation or Interpretation of Emissions Tests in an Environmental Audit C Client-employed Actuaries a Special Case of B D Client-employed Internal Auditors another Special Case of B 2. Client-Hired Specialists A The Specialist is Hired for the Purposes of the Engagement, or an Ongoing Series of Engagements B The Specialist is Hired to Meet Client Needs and (usually) Issues a Report for the Client 3. Assurance-Provider-Hired Specialists 4. Assurance Provider-Employed Specialist Appendix II Examples of Written Terms of Engagement with a Specialist Background to examples Example A An Assurance Provider-Hired Specialist is Part of the Assurance Provider's Team Background and Applicable Standards Confidentiality Objectivity, Independence and Due Care Access to Information Source Data Significance (materiality) Working Papers Subsequent Events XYZ's Findings and Conclusions S&R's Report Use of a Second Specialist in Environmental Matters Fees Administrative matters Mediation and arbitration Insurance Example B An Assurance Provider-Hired Specialist Works at Arm's Length from the Assurance Provider and Issues a Report that the Assurance Provider Uses as Evidence Background and Applicable Standards Work Plan, Personnel and Findings Confidentiality Objectivity, Independence and Due Care Access to Information Source Data Significance (materiality) Working Papers Subsequent Events XYZ's Findings and Conclusions S&R's Report Use of a Second Specialist in Environmental Matters Fees Administrative matters Mediation and arbitration Insurance Example C Specialist Terms of Engagement (or Letter of Understanding) when a Client-Hired Specialist Issues a Report for the Client and the Assurance Provider Plans to Use the Report as Evidence Appendix III Examples of Client Letters Permitting Exchange of Confidential Information Background Example A Assurance provider-hired specialist; there is no engagement between Plastics and XYZ Example B Client-hired Specialist; XYZ has its own Engagement with Plastics Appendix IV Examples of Report References to Use of a Specialist List of Examples (High Level of Assurance Except Where Indicated) Unqualified Conclusions Reservations when Reference to a Specialist is Deemed Necessary A Moderate Assurance Engagement Divided Responsibility Engagements Caution Example A An Unqualified Conclusion in a Long-form Report Example B A Scope Qualification in a Short-form Report Example C A Denial of Opinion Example D A Qualification Due to Lack of Conformity of the Subject Matter with the Criteria (Short-form Report) Example E An Adverse Opinion (Long-form Report) Example F An Unqualified Conclusion in an Engagement to Provide Moderate Assurance Example G A Short-form Divided Responsibility Report in the Form of a Single Report Example H Divided Responsibility Using Two Separate, but Linked, Short-form Reports Report of Smith Co. Report of ACA (immediately following the above) Appendix V Selected Authoritative & Semi-authoritative Guidance, by Topic Glossary of Defined Terms and Abbreviations Bibliography Using Graphics in Corporate Reporting
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