News Release

“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.