TORONTO, Feb. 5, 2013 /CNW/ - The role of audit committees is the focus
of a third discussion paper produced for a consultation process seeking
Canadian input on international discussions that could affect our
The Canadian Public Accountability Board (CPAB) and the Canadian
Institute of Chartered Accountants (CICA) launched the Enhancing Audit
Quality (EAQ) initiative to gain broad Canadian stakeholder input on
international audit proposals.
Regulators, policy makers, and standard setters in Europe, the United
States and other jurisdictions are considering changes to improve
confidence in the financial system. Audit quality is among the topics
under review and audit committees are recognized as being integral to
the audit process.
"Leveraging the existing strengths of Canadian audit committees provides
significant opportunities to improve the quality of the audit process
and, as a result, the reliability of financial reporting," explains
David Brown, chair of the EAQ Steering Group. "It is essential that we
hear from Canadians with a stake in our sound financial system."
Brown, a Canadian lawyer and former chair of the Ontario Securities
Commission, heads the independent steering group overseeing the EAQ
consultation process. The steering body, made up of senior financial
leaders, provides direction to three working groups focusing on the
role of the audit committee, auditor reporting and auditor
"We are interested in hearing from stakeholders on whether they endorse
or reject the views and recommendations contained in the discussion
paper," says Brown.
Recommendations include having audit committees conduct and publicly
report on periodic comprehensive reviews of the auditor engaged. This
would address concerns about familiarity between audit firms and
companies they audit. There is a perception that audit firms could
develop an overly close relationship with clients over time, which may
create a threat to independence and impede the auditor from exercising
an appropriate level of professional skepticism.
Another recommendation is for such reviews to assess the effectiveness
of the external auditors in fulfilling their responsibilities as a
basis for recommending to the board of directors whether the auditor
should be put forward for reappointment.
The comprehensive reviews would be considerably more rigorous than
annual assessments of the auditor's work and carried out every five
years. To facilitate the process, it is recommended that CPAB, and the
audit firms it regulates, develop a protocol for increasing the
information made available to audit committees about CPAB inspection
Previous discussion papers on auditor reporting and auditor independence
were issued in 2012. A final report reflecting the results of the
consultation process will be produced and made public later this year.
More information about the consultation process can be found online at www.cica.ca/enhancingauditquality
The Canadian Public Accountability Board (CPAB) is Canada's audit regulator, dedicated to protecting the investing
public's interests. CPAB regulates the auditors of Canadian public
companies through its national inspection program. CPAB's risk-based
inspection process focuses on key audit risks that could have the
greatest impact on audit quality. By promoting high-quality,
independent auditing, CPAB contributes to public confidence in the
integrity of financial reporting, which supports our capital markets.
Chartered Accountants (CAs) are Canada's most valued, internationally recognized profession of
leaders in senior management, advisory, financial, tax and assurance
roles. Through their integrity, expertise, and internationally
recognized qualification standards, Canada's 83,000 CAs sustain their
influence and leadership position both in Canada and globally. As
trusted business advisors to Canadian organizations of all sizes,
Canada's CAs foster confidence in Canadian business and contribute to
the health and sustainability of Canada's capital markets and economy.
The Canadian Institute of Chartered Accountants (CICA) represents
Canada's CA profession both nationally and internationally. The CICA
is a founding member of the International Federation of Accountants
(IFAC) and the Global Accounting Alliance (GAA).
Image with caption: "A third discussion paper has been issued as part of the Enhancing Audit Quality initiative launched by the Canadian Public Accountability Board and the Canadian Institute of Chartered Accountants. Perspectives gained through consultation will provide a clearer picture of Canadian stakeholder views on international audit reform proposals. (CNW Group/Canadian Institute of Chartered Accountants)". Image available at: http://photos.newswire.ca/images/download/20130205_C2960_PHOTO_EN_23303.jpg
SOURCE: Canadian Institute of Chartered Accountants
For further information:
Tobin Lambie, Manager, Media
Rachel Dao, Manager