The Canadian Public Accountability Board (CPAB) is seeking comments on potential changes to the type of information it discloses about the results of its assessments of accountants that audit Canadian reporting issuers. Currently, the rules governing CPAB restrict the sharing of inspection findings for individual firms to limited circumstances or with the consent of all impacted parties. The current Protocol for Audit Firm Communication of CPAB Inspection Findings with Audit Committees (Protocol) is voluntary in nature.

CPAB is considering certain disclosure principles, against which any changes are to be evaluated. The principles include improvements in audit quality, timeliness of CPAB reporting and remediation of audit deficiencies, public accountability and cost vs benefit considerations. The consultation seeks input with respect to communication of findings to an issuer’s audit committee, how much information should be included in CPAB’s public reports and whether CPAB should publicly report on its enforcement actions.

With respect to communication with audit committees, the current Protocol allows audit firms to choose to share the results of individual file inspections with the audit committee, although not all audit firms participate in the Protocol. The consultation asks whether the rules should be amended to mandate the sharing of the results of individual audit file inspections with the audit committee, and if such a requirement should apply to all reporting issuers. For public disclosure, CPAB currently publishes two reports a year, which provide a summary of inspection themes and recurring issues, but does not publish its findings individually by firm, and is seeking input on whether and how to do so. Lastly, CPAB seeks comment on whether it should make its enforcement actions public – to date, they have not done so – and with respect to the nature and breadth of such disclosure. CPAB has created a short survey as a potential alternative to comment letters, which are due by the end of September.

September 30, 2021