Audit oversight board issues draft registration process

The Canadian Public Accountability Board (CPAB) has released a draft registration process for auditors of public companies. The draft, which is posted on the CPAB website at www.cpab-ccrc.ca, will be open for comment until November 10, 2003.

"The release of this draft was a very important step," says Gordon Thiessen, chair of the CPAB. "We want to start the registration process in mid-November, and complete it by the end of February."

For the CPAB, an independent oversight board that was established in 2002, this is a major milestone on its way to fulfilling its mandate of promoting high-quality, independent auditing of public companies in Canada. In June, the Canadian Securities Administrators proposed a new rule (Multilateral Instrument 52-108, "Auditor oversight"), which will require auditors of reporting issuers to be participants in good standing with the CPAB when they issue an auditor's report with respect to their clients' financial statements. The comment period ended September 25, and the rule is expected to take effect in the new year.

"CPAB must first identify all the firms that audit public companies in Canada," says Thiessen. "We need basic information on the firms, as well as their intention to participate. Then, after the registration period ends, the CPAB will focus first on the 11 largest auditing firms. These will be inspected directly by the CPAB."

The draft notes that for smaller audit firms, inspections will ordinarily be performed on the CPAB's behalf by inspectors of the provincial institutes/Ordre concurrently with their regularly scheduled inspections and will be based on a program developed by the CPAB.

In the development of the inspection process, Thiessen emphasizes that there will be a lot of involvement with the provincial institutes and Ordre. "They have been doing these inspections for a long time, and we hope to take full advantage of their experience," he says.

Related articles:
Audit oversight board proposes registration process for auditors of public companies (Sept. 11, 2003)
http://64.26.145.90/cpab-ccrc.ca/dynamic.php?first=3f54f5c0b3040&second=3f54f71ab6d76&third=3f60e3d2f033d&fourth=&language=English

Gordon Thiessen to chair Canadian public accountability board (Nov. 4, 2002)
http://www.camagazine.com/index.cfm/ci_id/11063/la_id/1.htm

New public oversight board for audit firms (July 18, 2002)
http://www.camagazine.com/index.cfm/ci_id/7378/la_id/1.htm