CPAB 2015 Annual Inspections Report and Highlights for Audit Committees

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Mar 31, 2016

On March 31, 2016, the Canadian Public Accountability Board (CPAB) issued its 2015 Annual Inspections Report and Highlights for Audit Committees and notes that, overall, audit quality was inconsistent across all firms. Inspections at nine of those firms resulted in more significant inspection findings compared to the previous year.

The majority of CPAB's total significant inspection findings in 2015 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. The remaining findings required the audit firms to add considerable 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.

The following audit quality themes noted in CPAB's November 2015 inspections report on the Big Four accounting firms also apply to the other firms inspected this year:

  • Executing audit fundamentals
  • Understanding business processes relevant to financial reporting
  • Complex accounting estimates
  • Internal controls
  • Professional judgment and skepticism
  • Identification of accounting issues

Review the press release, the Annual Inspections Report and the Highlights for Audit Committees on the CPAB's Web site.

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