Will all the talking lead to meaningful change for auditing in Canada?

Thought leaders from Canada and around the world gathered in Toronto recently to discuss global developments underway to enhance the audit process.

Thought leaders from Canada and around the world gathered in Toronto recently to discuss global developments underway to enhance the audit process.  Among the key questions on the table were:  What is Canada’s view on the issues – and will our voice be heard?

Many of us have been through the economic downturn and the transition to new accounting and auditing frameworks such as IFRSs, ASPE and the CASs over the last few years. So we might be forgiven for not paying much attention to proposals to change the audit process coming out of Europe and the U.S. and how they might affect Canada. But a symposium organized by the Canadian Public Accountability Board in December 2011 did just that.

It must have been a bit overwhelming. Discussions focused on a broad range of topics: the role of the audit committee, the culture of audit firms, auditor reporting, interactions between regulators and auditors, and the adequacy of financial reporting – a complex interplay of economic, social, and regulatory factors that are enough to leave the head spinning.

But participants were not there just to discuss issues. During the symposium, they also gave their views on some key questions, such as:

  • 70 per cent agreed that the global financial crisis has eroded the level of trust investors place in the auditor’s opinion, and action needs to be taken now to restore it.
  • 88 per cent agreed that continuing to strengthen corporate governance and the audit committee’s supervision of the auditor will be more effective than structural reforms of audit firms.
  • Only 10 per cent said mandatory audit firm rotation would enhance auditor independence, objectivity and professional skepticism.

But perhaps most importantly, nearly 90 per cent of participants think that Canada needs a coordinated response, involving regulators, the auditing profession and the business community, to the various regulatory proposals that are being developed internationally in response to the global financial crisis. Easy to say – much harder to do. Anyone up for the job?

Keep the conversation going…are you up for the challenge of more change? Read CPAB’s “Audit Quality Symposium Summary” and give me your reactions. I would like to know if any of the responses to the questions in the summary surprised you and why! Email me directly.

Eric

Conversations about Audit Quality is designed to create an exchange of ideas on global audit quality developments and issues and their impact in Canada.

About the Author

Eric Turner, CPA, CA

Director, Auditing and Assurance Standards, CPA Canada

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