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Canadian securities regulators propose changes to auditor oversight rules

  • Securities - CSA Image

Oct 03, 2019

On October 3, 2019, the Canadian Securities Administrators (CSA) published for comment proposed amendments to National Instrument 52-108 "Auditor Oversight" (The Notice) intended to provide the Canadian Public Accountability Board (CPAB) with improved ability to perform audit inspections. Under the proposed changes, some reporting issuers and audit firms may be required to take steps to provide CPAB with enhanced access to audit working papers, particularly in foreign jurisdictions. Comments are requested by January 2, 2020.

Under the proposed new securities requirements, reporting issuers will be required to direct audit firms who are not subject to CPAB oversight, but complete a significant portion of audit work for a reporting issuer’s audit, to enter into an agreement with CPAB to access their files and inspect their work if such firms are not prepared to provide access to CPAB voluntarily upon request.

Known as component auditors, these audit firms complete some of the work that forms part of the evidence used to support an audit opinion. To assess whether sufficient audit evidence has been obtained to support an audit opinion, CPAB has determined it must be able to review all substantial audit work.

Review the press release on the CSA's website and the Staff Notice on the participating jurisdictions' website.

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