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CPAB Exchange: Mandatory Rotation and Tendering Part 2 - The Two Envelope Approach

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Mar 31, 2014

On March 31, 2014 the Canadian Public Accountability Board (CPAB) issued a bulletin stating that it recommends a two envelope approach to audit committees for reviewing audit firm proposals.

In this approach, audit firms would separate the proposed audit fee from the rest of their proposal. Audit committees would first review the auditors’ proposals without knowledge of the audit fees, and select the auditor based solely on their qualifications and ability to deliver a high quality audit. Once a selection has been made, the audit committee should then open and review the fee envelopes and negotiate the final fee with the selected auditor.

Review the bulletin on the CPAB's Web site.

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