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Feature cases and potentially jeopardize solicitor-client privilege. “It’s going to be fascinating to see how lawyers and accountants will interpret these rules,” remarked Stephen Kerr, a partner with Fasken Martineau Dumoulin LLP in Toronto, who practises general corporate and commercial law.“Historically audit letters have been a relatively efficient and inexpensive exercise. But as the disclosure becomes more extensive, as the job becomes more difficult in trying to estimate liability, as the timing becomes shortened, I can’t believe it’s not going to add complexity and costs to our clients.” Interim guidance rules To help Canadian lawyers navigate the changeover to IFRS,the Canadian Bar Association and the Auditing and Assurance Standards Board (AASB), the Canadian authority that sets generally accepted auditing standards (GAAS) for financial statement audits, collaborated to adapt the Joint Policy Statement on Audit Enquiries (JPS) that was developed in 1978. It turned out that the exercise was a bit more com- plicated than initially expected. The CBA/AASB task team intended to conduct a full-blown revision of the JPS but that project was put to rest after it came to light in January 2010 that the International Accounting Standards Board (IASB) proposed amendments to IAS 37 that would changed reporting standards for contin- gencies. The proposed revision, however, was delayed. With the planned reporting changes facing an uncer- tain future, the task team decided to issue Interim Guidance (Assurance and Related Services Guidance AuG-46) to assist lawyers with audit-related inquiries about unresolved legal claims instead of revamping the JPS twice in short succession, saidWilliam Scott, a partner with Stikeman Elliott LLP inToronto who is a member of the task team. Since the Interim Guidance applies only for financial statements pre- pared in accordance with IFRS, communications with law firms continue to be governed by the existing JPS in all other circumstances. But members of the task team acknowledge that questions still linger in spite of the Interim Guidance. Though the Interim Guidance is intended to be a temporary stop-gap measure until the issue surrounding IAS 37 is resolved, there are nevertheless grey areas that will likely remain Bruce Winter unanswered until either lawyers, accountants and Chair auditors see eye-to-eye over how the new stan- Auditing and Assurance dards should be interpreted or, in the worst case Standards Board scenario, the courts step in to provide guidance. Toronto 38 CCCA Canadian Corporate Counsel Association FALL 2011