Overview

One of the goals of the Canadian Public Accountability Board (CPAB) is to enhance audit quality and investor protection by providing content to help stakeholders improve audit quality and perform their roles more effectively. On November 27, 2017, CPAB announced that it plans to launch a new project to advance this effort relating to Audit Committee Communications in 2017/2018.

CPAB notes that the quality of communications between the audit committee and auditor influences both audit quality and the value the audit committee extracts from the audit. There is increased interest in understanding best practices in this area. For this project, audit committee communications includes all aspects of ongoing communications between the audit committee and auditor such as formal written communications, one-on-one meetings, ad hoc discussions, the use of in-camera sessions and others

The pro­ject’s ob­jec­tives in­clude: (i) to bet­ter un­der­stand the qual­ity and ef­fi­cacy of com­mu­ni­ca­tions be­tween au­di­tors and au­dit com­mit­tees through multi-stake­holder di­a­logue and case study analy­sis; and (ii) to iden­tify best prac­tices that can be broadly shared with au­dit firms, au­dit com­mit­tees and pre­par­ers.

On May 7, 2019, the CPAB issued an Exchange Bulletin entitled “Communications between auditors and audit committees - Effective communications that support audit quality.” The Bulletin summarizes the results of CPAB’s discussions during 2018 with audit committee chairs, audit partners and executive management of public companies of different sizes and in a variety of industries.

The most significant practices that emerged from CPAB’s discussions with broad applicability to enhance the effectiveness of auditor-audit committee communications were as follows: (i) communication protocols reinforce the auditor’s direct reporting relationship to the audit committee; (ii) communications extend beyond the lead partner; and (iii) audit quality indicators enhance the effectiveness of communications.

Other insights include: (i) written auditor communications are targeted, relevant and timely; (ii) auditors attend all audit committee meetings for the entire length of the meeting.

For further details of CPAB’s findings, refer to the Exchange Bulletin.

Other de­vel­op­ments

May 2019

On May 7, 2019, the CPAB issued an Exchange Bulletin summarizing the results of their discussions during 2018 with audit committee chairs, audit partners and executive management of public companies of different sizes and in a variety of industries.

November 2017

On November 27, 2017, CPAB announced that it plans to launch a new project relating to Audit Committee Communications in 2017/2018.