Update to Assurance and Accounting Standards and Resources

A recent update to the assurance and accounting standards and resources is now available on CPA Ontario’s knowledge hub and resources web page:

• The Centre for Audit Quality in the United States issued a publication titled Auditing in the Age of Generative AI, that explores the audit implications of risks associated with the use of generative artificial intelligence (AI) in financial reporting processes and internal control over financial reporting (ICFR). In addition to summarizing key aspects of generative AI technology and explaining how companies are using it, the publication discusses government regulations that may affect generative AI, outlines specific risk areas for auditors to consider, and includes example use cases of how auditors may encounter generative AI in a company’s financial reporting processes and ICFR.
• Subsidiaries without Public Accountability: Disclosures – A new standard, International Financial Reporting Standards (IFRS) 19, has been issued that permits eligible subsidiaries, on a voluntary basis, to use IFRS Accounting Standards with reduced disclosures. The new standard is effective for annual reporting periods beginning on or after January 1, 2027, with early application permitted.
• Classification and Measurement of Financial Instruments – Amendments to IFRS 9, Financial Instruments has been issued that (a) clarify the classification of financial assets with environment, social and corporate governance and similar features and (b) clarify how to account for the settlement of financial liabilities using electronic pay systems. Additional disclosure requirements regarding investments in equity instruments designated at fair value through other comprehensive income and financial instruments with contingent features (for example features tied to ESG-linked targets) has been introduced. The amendments are effective for annual reporting periods beginning on or after January 1, 2026, with early application of either all the amendments at the same time or only the amendments to the classification of financial assets.
• Annual Improvements to IFRS Accounting Standards - Volume 11 – Narrow-scope amendments have been issued to five IFRS Accounting Standards and to the accompanying Guidance on implementing IFRS 7, Financial Instruments: Disclosures. The amendments are effective for annual reporting periods beginning on or after January 1, 2026, with early application permitted.
• The Accounting Standards Board (AcSB) issued a resource, Effects of Climate-related Risks and Opportunities on ASPE Financial Statements: Awareness Document. The AcSB is releasing a series of awareness documents, developed to help organizations in navigating climate-related matters using ASPE standards. The first awareness document published is Impairment of inventories.

Check out CPA Ontario’s knowledge hub and resources web page regularly to stay up to date on the latest developments.