CSA – Changes to auditor oversight rules for audit firms re CPAB access to working papers (Amendments to National Instrument 52-108) [Completed]

Effective date:

Provided all necessary ministerial approvals are obtained, the amendments will come into force on March 30, 2022

Last up­dated:

January 2022

Overview

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.

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.

For further details, refer to the press release on the CSA's website and the Staff Notice on the participating jurisdictions' website. 

On January 13, 2022, the Canadian Securities Administrators (CSA) published final amendments intended to assist the Canadian Public Accountability Board (CPAB) with inspecting audit work performed in foreign jurisdictions.

The amendments respond to challenges CPAB has faced in accessing audit work performed by firms that are not subject to the regulator’s oversight, but complete a significant portion of the work for the audit of a Canadian reporting issuer. Audit firms performing such work are referred to as significant component auditors.

Once the changes take effect, if a significant component auditor does not provide access to CPAB voluntarily, and CPAB requests to inspect the work it performed, the significant component auditor will be requested to enter into an access agreement with CPAB to facilitate inspection of its work. Failure to do so will render that auditor ineligible to be a significant component auditor for future audit work.

Provided all necessary ministerial approvals are obtained, the amendments will come into force on March 30, 2022.

Review the following information:

Other developments

January 2022

On January 13, 2022, the CSA published final amendments intended to assist the CPAB with inspecting audit work performed in foreign jurisdictions. Provided all necessary ministerial approvals are obtained, the amendments will come into force on March 30, 2022.

October 2019

On October 3, 2019, the CSA published for comment proposed amendments to National Instrument 52-108 "Auditor Oversight" intended to provide the 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.

 

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