Canadian Public Accountability Board Publishes 2022 Annual Report

April 3, 2023

TORONTO, April 3, 2022 – In its 2022 annual report published today, the Canadian Public Accountability Board (CPAB) provides an update on its strategic initiatives and insights into its regulatory oversight of audit firms that audit Canadian reporting issuers.  

Inspection results for all categories of firms showed mixed results. Some firms demonstrated strong improvements while others received significant inspection findings at a rate higher than CPAB’s target of 10 per cent.

“This inconsistency is an unacceptable trend,” said Carol Paradine, CPAB’s chief executive officer. “CPAB is taking regulatory action to deal with specific concerns on a firm-by-firm basis.”

CPAB conducts inspections of all audit firms that audit Canadian reporting issuers. Eleven firms audit more than 100 Canadian reporting issuers a year and represent 91% of all audits conducted in Canada. These 11 firms are inspected annually, while firms that inspect fewer than 100 firms are inspected less frequently. 

Consistent with the inspection insights it published last fall, CPAB continues to observe that firms with strong systems of quality management are more likely to meet the target of fewer than 10 per cent of files with significant inspection findings. Audit firms and their leadership are expected to implement systems of quality management to foster a quality-driven culture. 

“High-profile ethical breaches in Canada and internationally underscore the importance of ensuring audit firms have a culture that prioritizes and supports ethical behaviour and decision-making at all levels,” said Paradine. 

In 2022, CPAB published recommendations on intended changes to the information it will disclose about the results of its oversight of participating audit firms that audit Canadian reporting issuers. Significant planned changes to the information disclosed are being introduced in a phased approach. In the first phase, which was effective January 2023, CPAB started to disclose all significant enforcement actions arising from regulatory assessments. This approach differs from the past practice whereby information disclosed was limited to instances where public sanctions were imposed. Interested parties can receive CPAB enforcement action updates by subscribing to the CPAB Bulletin on CPAB’s website. For more information on planned changes, see CPAB’s disclosure recommendations document published in September, 2022.

CPAB engages with other audit regulators and standard setters in Canada and abroad to help shape discussions and outcomes relating to the evolution of the audit. In 2022, CPAB contributed to the conversation through the publication of thematic reviews on fraud and going concern, engaging with standards setters on revising and drafting new standards, as well as a report on the use of custodians to safeguard crypto assets  . CPAB is also assessing how auditors are considering climate-related factors in their audits.

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About CPAB

The Canadian Public Accountability Board (CPAB) is Canada’s independent, public company audit regulator. Charged with overseeing audits performed by registered public accounting firms, CPAB contributes to public confidence in the integrity of financial reporting. CPAB promotes audit quality through proactive regulation, dialogue with domestic and international stakeholders, and practicable insights to inform capital market participants. CPAB has offices in Montreal, Toronto and Vancouver.

For more information, contact:

Susan Schutta, Chief Corporate Affairs Officer
Canadian Public Accountability Board