Enhancing audit quality final report: Canadian perspectives, conclusions and recommendations

Learn about the conclusions and final positions of Chartered Professional Accountants of Canada (CPA Canada) and the Canadian Public Accountability Board (CPAB) on their collaborative and comprehensive Enhancing Audit Quality (EAQ) initiative.

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In response to the fallout of the financial crisis, CPA Canada and CPAB collaborated on the comprehensive EAQ initiative to gain stakeholder input on emerging issues with respect to enhancing audit quality globally, and the impact on Canada.

Three working groups conducted extensive consultation with diverse groups of stakeholders and developed consultation papers.

The groups were:

  • The Role of the Audit Committee Working Group (ACWG)
  • The Audit Reporting Working Group (ARWG)
  • The Auditor Independence Working Group (IWG)

The EAQ Steering Group synthesized the analyses and conclusions from the three groups’ discussion papers and conclusions, and arrived at final positions on these areas of focus:

  • the role of audit committees in external auditor oversight
  • the auditor reporting model
  • auditor independence

Enhancing Audit Quality: Canadian Perspectives, Conclusions and Recommendations, the final report of the EAQ initiative, focuses on the contentious issues that achieved little global consensus and provides the reasoning behind how conclusions were reached. The report also summarizes many other conclusions that were not disputed.

You will learn about EAQ examinations of these questions:

  • Will the final remedies be global in nature or jurisdiction specific? Can Canadian authorities tolerate domestic remedies that differ from those introduced elsewhere?
  • Does long-term engagement of an audit firm pose an institutional familiarity threat to auditor independence? If so, what are the relative benefits of the alternatives proposed to address this issue?
  • What is the current role and responsibility of audit committees in overseeing the work of external auditors? Could or should that be enhanced? If so, what challenges, in terms of resources and expertise, will audit committees need to address?
  • For assessing audit quality, should audit committees receive information about the findings and conclusions emanating from auditor inspections by independent audit oversight bodies, e.g. CPAB for Canadian reporting issuers?
  • What improvements does the auditor-reporting model require to deal with acknowledged information and expectation gaps between what reports say and what readers need? Do audit committees have a responsibility to report information received to investors?