Disclosures
As a result of feedback received from our public consultations in 2021 and 2023, CPAB is evolving our approach to information disclosure. We are currently pursuing changes to our rules to allow for an increase in the information we share regarding the results of our regulatory assessments.
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.
Second phase changes, where amendments are required, will take additional time to implement as they will involve securing the agreement of multiple regulators and will involve changes by legislative authorities with oversight of CPAB’s Rules and legislation. 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.
In fall 2023, CPAB conducted a public consultation on proposed changes to our rules and legislation in order to implement our intended second phase changes.
After considering the feedback from our 2023 consultation, we believe there is broad support for CPAB to proceed with obtaining the approvals required to complete the amendments to our rules.
Next steps
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 rule amendments 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. Whether such amendments are made, and the timing of such changes, are subject to the discretion of the Ontario legislature.
If legislative amendments are passed by the end of 2024, CPAB intends to implement the planned disclosure related changes for the 2025 inspection cycle.
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
- Request for comment on CPAB proposed rule changes – September 2023
- CPAB proposed rule changes summary – September 2023
- CPAB proposed rule changes blackline – September 2023
- CPAB proposed Participation Agreement changes blackline – September 2023
2023 Rule change consultation written responses
- Comment letter (2023): Canadian Advocacy Council of CFA Societies Canada
- Comment letter (2023): Canadian Centre for Audit Quality
- Comment letter (2023): Canadian Coalition for Good Governance
- Comment letter (2023): Dale Matheson Carr-Hilton LaBonte LLP, McGovern Hurley LLP and Smythe LLP (joint response)
- Comment letter (2023): Deloitte LLP, Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopers LLP (Joint submission)
- Comment letter (2023): FAIR Canada
- Comment letter (2023): Investor Advisory Panel (Ontario Securities Commission)
- Comment letter (2023): MNP LLP
- Comment letter (2023): Office of the Superintendent of Financial Institutions Canada (OSFI)
- Comment letter (2023): Ordre des CPA du Québec (French only)
- Comment letter (2023): Steve Glover, FCPA
Disclosures consultation updates
- CPAB Disclosures project update - June 2023
- CPAB 2021 Disclosures Public Consultation - Update on feedback received and next steps
2021 Disclosures consultation documents and written responses
- CPAB's disclosure consultation document
- Comment Letter (2021): BDO
- Comment Letter (2021): Canadian Advocacy Council of CFA Societies Canada (CAC)
- Comment Letter (2021): Deloitte LLP, Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopers LLP (Joint submission)
- Comment Letter (2021): FAIR Canada
- Comment Letter (2021): Glenidan Consultancy Ltd.
- Comment Letter (2021): Grant Thornton, Raymond Chabot Grant Thornton
- Comment Letter (2021): Office of the Superintendent of Financial Institutions (OSFI)
- Comment Letter (2021): Ordre des CPA du Québec (French only)
- Comment Letter (2021): CPAB Disclosures Public Consultation Online Survey – Response Summary 2021