CPAB 2017 Annual Inspections Report

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Mar 27, 2018

On March 27, 2018, the Canadian Public Accountability Board (CPAB) released its 2017 Annual Inspections Report, which discusses CPAB's findings for participating in firms inspected in 2017.

CPAB’s 2017 inspections of the 14 public accounting firms reviewed annually (those with 100 or more reporting issuers) indicate that – despite an overall decrease in significant inspection findings compared  to last year – audit quality continues to be inconsistent.

They inspected 128 (2016:135) annual firm audit files and identified significant findings in 15 (2016:24). The majority of their significant findings in 2017 required the audit firm to carry out additional audit procedures to determine the need, if any, to restate the financial statements due to material error. There were three restatements. The remaining findings required firms to add evidence to the audit file to show they had obtained sufficient and appropriate audit evidence with respect to a major balance sheet item or transaction stream.

Firms generally have sound audit methodologies and in most cases meet standards. However, recurring inspection findings indicate the need to manage audit quality through robust and effective quality management processes, embedding quality along the full audit cycle, not just assessing it at the end through internal and external inspections. The variability of results, combined with persistent deficiencies year over year, makes it clear the firms need to review their approach to audit quality and enhance their focus on consistent execution across the firm.

Review the report on the CPAB's website.

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