Fraud

Since 2019 CPAB has performed periodic fraud thematic reviews to enhance awareness of fraud risks and evaluate the quality of fraud-related procedures performed in audits of financial statements.

Fraud can have extremely negative consequences on impacted organizations and their stakeholders. 

In 2019, CPAB began its fraud thematic review, and has continued with each inspection cycle. Our reviews involve a deeper dive into the quality of work performed by auditors to identify, assess and respond to fraud risks. 

Many auditors are moving in the right direction in terms of improving their identification and assessment of fraud risk factors and associated procedures. While most of the audit work that we inspect complies with the existing fraud standard, to truly provide greater protection to the investing public a more questioning mindset is needed.

The reviews also provided insights about how international and Canadian auditing standards that deal with an auditor’s responsibilities relating to fraud could be strengthened, enhanced and clarified in the public interest. CPAB is actively engaged with the International Auditing and Assurance Standards Board (IAASB) and the Canadian Auditing and Assurance Standards Board (AASB) as they work toward revising those standards.

We’ve also been engaging with forensic specialists, investors and other regulators to better understand the public’s expectations of auditors relating to fraud detection and to inform our views about good audit practices. To facilitate these ongoing discussions CPAB hosted a fraud symposium in 2023, sharing our view that further awareness of the critical role auditors play in the prevention and detection of fraud and the protection of the capital markets is needed throughout the financial reporting ecosystem. 

Refer to the Resources section below for more information on our thematic reviews, engagement with standard setters, and recent audit quality symposium focused on the evolving fraud landscape.

Resources