Disclosures

Over the last several years, CPAB has made significant progress in our efforts to increase the information that we disclose about the results of our regulatory assessments. 

In January 2023, we began disclosing a list of participating audit firms subject to significant enforcement actions arising from inspection findings. We have recently secured CPAB Rule changes designed to improve operational efficiency and administrative processes and are progressing toward rule changes related to enhanced disclosures. 

Together, these changes are designed to provide greater transparency for the investing public, audit committee chairs and other stakeholders, and support CPAB’s oversight of public accounting firms that audit Canadian reporting issuers.

Background

In 2021, CPAB consulted stakeholders to gather input on changes to the information that we disclose about the results of our regulatory assessments. CPAB took this feedback into account, and in 2022 published intended changes, including near-term changes and changes that would be implemented in a second phase. 

Near-term changes that did not require amendments to CPAB’s Rules or legislation were implemented beginning in January 2023. As a result of these changes, CPAB now discloses:

  • Significant enforcement actions imposed on a firm
  • Recommendations which were included in a firm report but not addressed by the firm.

Changes requiring amendments to CPAB’s Rules and legislation 

Changes requiring amendments to CPAB’s Rules and legislation take additional time to implement as they involve securing the agreement of multiple regulators and involve changes by legislative authorities. 

These changes will be rolled out in two stages, as outlined below.

Stage 1: Changes to improve operational effectiveness and administrative processes

As of November 2024, changes to improve operational effectiveness and administrative practices have been approved by the relevant government and securities regulators and are now in effect. More information on these changes can be found here.

Stage 2: Changes to implement CPAB’s enhanced disclosures

We are in the process of obtaining final approvals to implement our enhanced disclosures. These changes will result in CPAB:

  • Introducing mandatory disclosure of reporting issuer-specific significant inspection findings to the reporting issuer’s audit committee.
  • Issuing a condensed individual public inspection report for each audit firm inspected by CPAB in a given year.

The planned rule changes will be effective once CPAB has obtained all approvals from the relevant provincial government and securities regulators. This approach ensures a uniform implementation of the disclosure changes across all provinces and territories in Canada, subject to local legal frameworks.

The final implementation of the disclosure-related rule changes in Ontario (mandatory audit committee reporting, individual audit firm public reports) will be dependent on amendments to the Ontario CPAB Act. These changes are subject to the discretion of the Ontario legislature.

 

Additional information

CPAB has published a summary of the feedback received in response to both our 2021 and 2023 consultations as well as details on next steps in the rule change process. That document can be found here. 

For more details on our planned changes, refer to our recommendations document here.

2023 Rule change consultation documents

2023 Rule change consultation written responses

Disclosures consultation updates

2021 Disclosures consultation documents and written responses