Canadian Securities Regulators Adopt Changes to Auditor Oversight Rules

A press release dated January 13, 2022, the Canadian Securities Administrators (CSA) said it had published final amendments intended to assist the Canadian Public Accountability Board (CPAB) with inspecting audit work performed in foreign jurisdictions.

According to the press release, “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.”

“Auditors play a central role in fostering confidence in our capital markets,” says Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “These new rules will improve audit quality through enhanced oversight, reducing the potential for errors in the audits of Canadian public companies.”

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.

“We are pleased with the CSA changes which enhance our ability to access audit work and are the result of a great deal of thoughtful collaboration among the various regulatory parties,” said Carol Paradine, CEO, CPAB.

The Amendments to National Instrument 52-108 Auditor Oversight and its Companion Policy can be found on CSA members’ websites. Provided all necessary ministerial approvals are obtained, the amendments will come into force on March 30, 2022.

CPAB has published guidance (52-108-guidance-en.pdf ( on how it will implement the amendments.

CSA Publish Guidance on ESG-Related Investment Fund Disclosure
In another press release, this one issued January 19, 2022, the Canadian Securities Administrators published guidance for investment funds on their disclosure practices that relate to environmental, social and governance (ESG) considerations, particularly funds whose investment objectives reference ESG factors and other funds that use ESG strategies (ESG-Related Funds).

The guidance is based on existing regulatory requirements and addresses areas of disclosure, including investment objectives, fund names, investment strategies, risk disclosure, continuous disclosure and sales communications.

According to the press release, “as the investment fund industry creates new funds and incorporates ESG considerations into existing funds to meet demand, there is an increased potential for “greenwashing” – where a fund’s disclosure or marketing intentionally or inadvertently misleads investors about the ESG-related aspects of the fund.”

“Interest in ESG investing is on the rise and this enhanced and practical guidance will play an important role in helping investors make informed decisions about ESG products, as well as preventing potential greenwashing,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers.

The new guidance is intended to help investment funds and their fund managers enhance the ESG-related aspects of the funds’ regulatory disclosure documents and ensure that sales communications of ESG-Related Funds are not untrue or misleading and are consistent with the funds’ regulatory offering documents.

As part of its ongoing continuous disclosure review program, the CSA will continue to monitor the ESG-related disclosure of funds.

For the more detailed release, go to Canadian securities regulators publish guidance on ESG-related investment fund disclosure - Canadian Securities Administrators (