CPAB’s 2022 Disclosure Recommendations

Over the past decade, the Canadian Public Accountability Board (CPAB ) has been taking steps to increase public transparency and accountability related to its regulatory assessments. This includes introducing the voluntary Protocol for Audit Firm Communication of CPAB Inspection Findings in 2014, as well as increased disclosure of enforcement actions in recent years.

Now, as a result of feedback received from a public consultation on its approach to disclosures in 2021, CPAB intends to make significant changes to the information it discloses about the results of its oversight of participating audit firms

The majority of stakeholders involved in the consultations said that CPAB should significantly increase or make targeted improvements to how it discloses its regulatory assessments. Specifically, audit committee members expressed that additional information on the results of CPAB’s oversight would be beneficial in supporting their oversight of auditors. Investors and other commentators said that increased disclosures would increase public accountability and pressure on firms to improve audit quality.

Stakeholders also indicated that, in addition to the disclosure principles outlined in the consultation paper, consideration should be given to whether planned disclosures:

  • Enhance CPAB’s protection of the investing public.
  • Are transparent, meaningful and relevant.
  • Are consistent with disclosures made by other regulators internationally.
  • Protect the confidentiality of reporting issuers.

As a result of all this, CPAB has planned the following changes:

  • Publish information about significant enforcement actions imposed on participating audit firms.
  • Make the disclosure of the results of CPAB audit file inspections to audit committees mandatory.
  • Provide additional firm-specific information about the results of its inspections.
  • Make public the details of CPAB recommendations where firms have not addressed concerns to CPAB’s satisfaction.

CPAB plans to implement near-term changes to how it discloses information in January 2023. Changes that require amendments to its rules and legislation require CPAB to consult with, and engage, several stakeholders. As a result, these changes will take place over a multi-year period.

For the details on the proposed changes, see 2022-cpab-disclosure-recommendations-en.pdf (cpab-ccrc.ca).