The study’s purpose was to better understand the Canadian KAM reporting experience of Toronto Stock Exchange (TSX)-listed entities and communicate relevant insights to auditors and other stakeholders to assist in future KAM communications.

The overview summarizes:

• the study’s key findings;
• the hints and tips from the study for the next implementation wave; and
• non-authoritative guidance to assist auditors in future KAM communications, including those who are implementing KAM reporting for the first time.

Review the press release and publication.

The interim report also highlights CPAB's observations related to progress on the implementation of the new quality management standards, auditor independence and objectivity. It provides insight into their activities on firm culture and the results of thematic reviews on climate, fraud and going concern.

Overall considerations for audit committees are also included as year-end audit preparations begin.

CPAB encourages public accounting firms to provide this report to their reporting issuers’ audit committees. Audit committees should discuss this report, any file-specific findings and any remediation action taken, if applicable, with their external auditor.

Review the report on the CPAB's website.

In this publication, CPAB emphasizes the importance of culture to a firm’s system of quality management and provides preliminary observations on the implementation of the new quality management standards.

Review the publication on the CPAB's website.

Other Auditors Project Completed

In June 2022, the Board adopted amendments to its auditing standards to strengthen requirements that apply to audits involving multiple audit firms, thus completing a project initiated in 2016. With the SEC’s August 2022 approval of the Board’s action, the Other Auditors project has been removed from the standard-setting agenda.  

Three New Projects Added

The PCAOB further expanded its standard-setting and research agendas with three new projects.

Two of the new projects have been added to the short-term standard-setting agenda: Interim Standards – AS 1000 and Amendments Related to Certain Aspects of Designing and Performing Audit Procedures That Involve Technology-Assisted Data Analysis. The amendments related to certain aspects of the designing and performing technology-assisted data analysis project resulted from the successfully completed research project on Audit Evidence, which has now been removed.

One project has been added to the PCAOB’s research agenda: Firm and Engagement Performance Metrics.

Three Project Timelines Updated

The anticipated timing for the Confirmations project has moved up to 2022 from 2023, with the Board expected to issue a re-proposal before year’s end. 

For two projects — Noncompliance with Laws and Regulations and Attestation Standards Update — the anticipated timing for action is now 2023. Board action on these projects continues to be expected in the next 12 months.

Review the standard-setting and research agendas on the PCAOB's website.

In her speech, she described how the PCAOB released their five-year strategic plan, outlining four key goals:

• One, modernizing our standards,
• Two, enhancing our inspections, 
• Three, strengthening our enforcement, and 
• Four, improving organizational effectiveness.

Review the speech on the PCAOB's website.

Modernizing standards is one of the four key goals the Board identified in its draft strategic plan. To meet that goal, earlier this year, the Board announced one of the most ambitious standard-setting agendas in PCAOB history, including plans to modernize interim standards that have not been updated since they were initially adopted decades ago.

Registered public accounting firms are sometimes engaged to examine and report on matters outside of an audit of financial statements. PCAOB attestation standards apply to attest engagements, which generally involve issuing a report on subject matter, or an assertion about subject matter, that is the responsibility of another party. For example, attest engagements may concern a company’s compliance with laws and regulations, or a company’s historical data or measures that are evaluated against certain criteria.

In April 2003, the Board adopted on an interim basis certain attestation standards from the American Institute of Certified Public Accountants. These standards have continued in effect substantially as they were adopted.

Review the press release and request for information on the PCAOB's website.

Based on a comprehensive consultation process and a review of approaches in other jurisdictions, the changes outlined in the document are driven by a desire to provide more information and align with disclosure approaches in similar jurisdictions while respecting Canada’s unique regulatory environment.

Given continued high levels of inspection findings, and changes in audit and regulatory practices and stakeholder expectations, it is appropriate to evolve our current disclosures approach. This evolution is consistent with CPAB’s role as Canada’s public company audit firm regulator charged with protecting the investing public’s interests.

CPAB's recommendations include both near-term changes to be implemented in 2023 and longer-term modifications which require changes to legislation or to our rules. These longer-term changes are expected to take a minimum of two to three years because changes to CPAB’s Rules and its governing legislation require the involvement of provincial governments and securities regulators.

In the near-term, beginning in 2023, CPAB, where possible, will disclose:

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

Over the longer term, CPAB will work to secure rule or legislative changes which will allow the following:

• Mandatory disclosure of issuer-specific significant inspection findings to that issuer’s audit committee
• Individual public inspection reports for each audit firm

Review the recommendations on the CPAB's website.

This update includes:

• overview of Discussion Paper respondents;
• what you told us;
• what we are doing now; and
• what assistance is available now

Review the report on the AASB's website.

Specifically, the publication discusses the Division’s observations, as well as the auditor’s responsibilities and good practices, related to four key topics: (1) fraud, (2) interim reviews of special-purpose acquisition companies (SPACs) and de-SPACs, (3) going concern, and (4) cash and cash equivalents.

Review the publication on the PCAOB's website.

The agreement grants the PCAOB complete access to the audit work papers, audit personnel, and other information its needs to inspect and investigate any firm it chooses, with no loopholes and no exceptions.

The PCAOB Is currently finalizing preparations to be on the ground by mid-September so it can put this agreement to the test.

The Statement of Protocol specifically grants the PCAOB complete access in three important ways:

• The PCAOB has sole discretion to select the firms, audit engagements and potential violations it inspects and investigates – without consultation with, nor input from, Chinese authorities;
• Procedures are in place for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; and
• The PCAOB has direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates.

Re­view the press release on the PCAOB’s web­site.