CPAB climate thematic review


CPAB is interested in how climate-related matters are addressed by auditors, given climate-related risks can have a material impact on a reporting issuer's financial results.

Our goal is to understand the current state of how climate matters are captured within audit activity today to inform our future inspections and other activities, including contributing to the development of sustainability reporting and assurance standards by international standard setters.

With this in mind, since 2022 CPAB has been conducting a climate thematic review concurrently with our file inspections to understand how auditors evaluate the impact of climate-related risks in their financial statement audits:

  1. How audit firms are preparing engagement teams to consider the impact of climate-related risks in financial statement audits of public companies, and
  2. the extent to which engagement teams are currently doing so.


What we are seeing

  1. Canada’s four largest audit firms each have specific guidance and training materials to support auditors in considering and addressing climate-related risks in their financial statement audits.
  2. The quality of resources provided to the audit practice varies across all firms. There is a range of guidance and training seen at the other annually inspected firms, with many firms at the early stage of developing their approach in this emerging area.
  3. In most files we inspected to date, there was no change to the audit approach to respond to the climate-related audit risks.
  4. In instances where climate-related factors are considered by auditors as part of their risk assessment, the extent and quality of work performed varies significantly.

Click here to learn more about CPAB’s observations stemming from our climate thematic review.


Looking forward

CPAB encourages audit firms to continue to prepare their teams to consider and address climate-related risks in their financial statement audits.

Firms should also increase their monitoring of this area to ensure that audit teams, particularly those auditing reporting issuers in industries more likely to be impacted by climate-related risks, are using their existing guidance and resources.

CPAB continues to monitor how auditors are identifying and assessing climate-related risks through our inspections and share our observations through various communications. 

CPAB also continues to monitor, and where appropriate, share perspectives on standard setting activities related to the development of sustainability reporting and assurance standards.