Assurance and Related Services

Updated: February 9, 2026

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Standards in Focus

The revised Canadian Auditing Standard (CAS) 570, Going Concern


Why has the Standard Changed?

Recent corporate failures, and increased expectations from investors and stakeholders have highlighted the need for more robust and transparent evaluations of an entity’s ability to continue as a going concern.

International Standard on Auditing (ISA) 570 (Revised 2024), Going Concern, strengthens the auditor’s responsibilities, enhances consistency in audit practices, and improves communication with stakeholders.

As part of Canada’s adoption of the ISAs as Canadian Auditing Standards (CASs), the Auditing and Assurance Standards Board (AASB) has issued revised CAS 570, Going Concern. This revised Canadian standard is fully aligned with ISA 570 (Revised 2024), with no Canadian amendments.

What do CPAs Need to Know?

Under the revised CAS 570, auditors shall perform more rigorous and timely risk assessments, consistently evaluate management’s going concern assessment in all cases, and place increased emphasis on considering potential management bias. The auditor shall also evaluate management’s going concern assessment for a period of at least 12 months from the date of approval of the financial statements.

Additionally, the standard enhances transparency by requiring clearer auditor reporting and improved communication with those charged with governance throughout the audit engagement for matters pertaining to going concern.

Acknowledgement and credit to CPA Ontario for providing this original content material.

Standards in Focus - The revised Canadian Auditing Standard (CAS) 570, Going Concern

 

 

High-quality audits support the smooth functioning of capital markets. The public interest is best served when everyone in the financial reporting system has confidence in audits. In recent years, high-profile international corporate failures and significant accounting restatements have put a spotlight on those involved in the preparation, approval, audit, analysis, and use of financial reports, particularly in the area of fraud.

The IAASB has now issued an Exposure Draft of International Standard on Auditing (ISA) 240 (Revised), The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements, and the related conforming and consequential amendments. In addition, the IAASB’s Exposure Draft also includes an Explanatory Memorandum, which provides background to, and an explanation for, the proposed revisions to extant ISA 240.

The AASB plans, subject to comments received following exposure, to adopt proposed ISA 240 (Revised) and the proposed conforming and consequential amendments to other ISAs. The result would be revised respective Canadian Auditing Standards (CASs).

Learn more: The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements.

The Auditing and Assurance Standards Board (AASB) developed this publication to address how the International Accounting Standards Board’s (IASB) narrow-scope amendments to International Accounting Standard (IAS) 1, Presentation of Financial Statements affect the Canadian Auditing Standards (CASs) and Canadian Standard on Review Engagements (CSRE) 2400, Engagements to Review Historical Financial Statements. This publication does not amend or override the CASs, the texts of which alone are authoritative. Reading this publication is not a substitute for reading the CASs.

Narrow-scope Amendments to IAS 1: The narrow-scope amendments to IAS 1 require entities to disclose their material accounting policy information, instead of significant accounting policies. The amendments are effective for annual reporting periods beginning on or after January 1, 2023, with early application permitted. The IASB has provided guidance on how to apply the concept of materiality to accounting policy disclosures.

Learn more: Amendments to IAS 1 and the Impact on the CASs: Disclosure of Material Accounting Policy Information

Issues Related to the Assessment of the Effectiveness of Management Review Controls: Roundtable Summary explores areas that create challenges in implementing effective design, precision and operation of management review controls, and in assessing their effectiveness. The report includes highlights of a recent roundtable held to identify and share leading practices for practitioners and auditors on how to address these often-highly subjective controls.

Learn more: Assessing Management Review Controls

 

For entities of all types and sizes, management has to make accounting estimates, which have estimation uncertainty and may also be complex. Making these estimates involves selecting and applying a method using assumptions and data, which requires judgment. The nature, timing and extent of the audit procedures will vary in relation to the estimation uncertainty and the assessment of the related risks of material misstatement.

Learn more: Auditing Accounting Estimates

 

The Canadian Securities Administrators published final disclosure requirements for issuers who voluntarily disclose non-GAAP and other financial measures. Also in May, the CSA proposed changes to the continuous disclosure requirements for non-investment fund reporting issuers.

Learn more: CSA Publishes Disclosure Rules for Non-GAAP and Other Financial Measures

 

This project will replace Assurance and Related Services Guideline (AuG) 16, Compilation of a Financial Forecast or Projection, with a new Canadian Standard on Related Services (CSRS). 

AuG-16 was first issued in 1993 and has not been updated since.  When the AASB issued a new CSRS 4200, Compilation Engagements, to replace Section 9200, Compilation Engagements, the AASB determined that it should conduct preliminary research. The purpose of the research was to understand the implications of CSRS 4200 on AuG-16 and challenges faced by practitioners when assisting entities in compiling FOFI or pro forma.

Learn more: Compilations of Future-oriented Financial Information (FOFI) and Pro Forma


The Auditing and Assurance Standards Board published three publications setting out guidance on Canada’s audit requirements for communicating key audit matters in auditors’ reports: Lessons Learned from Firms Implementing KAM Communications on Audits of TSX-Listed Entities: Identifying and Communicating KAMs in the Auditor’s Report; Roadmap to Developing a Successful KAM-Implementation Process and Frequently Asked Questions.

Learn more: Future of Audit: Communicating Key Audit Matters

The International Ethics Standards Board for Accountants released revisions to its international ethics code that “significantly strengthen the guardrails around auditor independence” in two areas that have the potential to create incentives influencing auditor behavior: non-assurance services provided to audit clients and fees.

Learn more: Revisions to the Non-Assurance Service Provisions of the Code

Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Extended External Reporting (EER) Assurance Engagements addresses challenges commonly encountered in applying the standard in assurance engagements on EER. The guidance provides advice on: applying appropriate competence and capabilities; exercising professional skepticism and judgment; the preconditions for an assurance engagement; and specific technical matters.

Learn more: Understanding International Standard on Sustainability Assurance 5000



 

 

 

 

 

 

 



 

 

 

 

 

 


 

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