On October 26th, the Canadian the Public Accountability Board (CPAB), the Office of the Superintendent of Financial Institutions (OSFI) and the Canadian Securities Administrators (CSA) co-hosted the Canadian Audit Quality Roundtable in Toronto.
The annual Roundtable, brings together Canadian capital markets stakeholders, including regulators, standard-setters, and audit firms to share perspectives on the recent developments in audit quality in Canada. Now in its fifth year, the Roundtable provided a forum to discuss issues and priorities needed to support the integrity of financial reporting in Canada. Observations were also shared on the implementation of the Canadian Standard on Quality Management 1 (CSQM 1), the new Canadian auditing standard for quality management systems.
Roundtable attendees discussed topics, including risks impacting external audits; the role of governance and culture within an audit firm, particularly with regards to audit quality; fraud detection and prevention; developments in sustainability and climate disclosure reporting standards and practices; risks related to emerging technologies, including AI (Artificial Intelligence); and IFRS 17 (International Financial Reporting Standard) Insurance Contracts implementation.
Among the key points of discussion were:
- An important element of maintaining confidence in Canada’s capital markets is the consistent execution of high-quality audits that maintaining confidence in audited financial statements of Canadian reporting issuers;
- The fraud risk landscape continues to evolve. Many firms are implementing or piloting new approaches including the use of technology and the increased utilization of forensic specialists to address these evolving risks;
- Audit firms have begun to consider and address climate-related risks in their audit risk assessments of financial statements. There are opportunities to evolve the depth and consistency of these assessments;
- Increased use of emerging technologies have created new opportunities to enhance audit quality but conversely have introduced new risks; and,
- A continuing shift in the risk environment may lead to increased risk in credit, liquidity and going concern issues.
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
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