Leaders from Canada’s financial regulatory bodies and audit industry convened at the sixth annual “Canadian Audit Quality Roundtable” on Oct. 21 to discuss emerging risks and opportunities impacting audit quality in Canada. Co-hosted by the Canadian Securities Administrators (CSA), the Canadian Public Accountability Board (CPAB), and the Office of the Superintendent of Financial Institutions (OSFI), the event brought together senior representatives from regulatory bodies, audit firms, and key stakeholders.
This year’s roundtable covered various themes, a news release highlighted, including:
- Global trends and sustainability: Participants examined the influence of international developments on Canadian audit quality, including the need to attract new talent and meet the growing demand for sustainability assurance.
- The rise of AI: This technology presents possibilities for enhancing audit processes while introducing certain risks. Participants addressed the need for comprehensive oversight frameworks and internal controls to help manage these risks and ensure that AI is implemented to strengthen audit quality.
- Audit firm culture: With the recent adoption of the Canadian Standard on Quality Management, audit firms are refining their quality management systems, aiming to establish practices essential to maintaining audit quality. A strong internal culture was noted as a key component of quality assurance within firms.
- Climate-related financial risks: The roundtable examined methods auditors can use to assess financial impacts from climate-related factors, given the broader economic and operational implications. This consideration reflects a shift toward including non-financial uncertainties in audits, such as business stability and resilience risks.
“Financial reporting is vital for maintaining fair and efficient capital markets and promoting investor confidence,” said Stan Magidson, CSA chair and chair and CEO of the Alberta Securities Commission said in a CSA press release. “The CSA continues to collaborate with regulators, industry, and investors to enhance reliable financial reporting and access to quality information.”
Carol Paradine, CEO of CPAB, emphasized the role of auditors in the market. “Auditors play a foundational role in our capital markets and reporting of financial results. The Canadian Public Accountability Board is encouraged by the commitment made by participants to support a strong financial reporting ecosystem in Canada, and to the protection of the investing public,” she stated.
OSFI superintendent Peter Routledge affirmed the importance of high-quality external audits for the integrity of the Canadian financial system. “Prudential supervision of financial institutions and the stability and integrity of the Canadian financial system are supported by high-quality external audits. We welcome opportunities like this roundtable to discuss significant risks to the financial system and foster productive relationships with external audit firms and regulators,” he remarked.