Background
Following are the key milestones that lead to the creation of the Canadian Public Accountability Board (CPAB) and the commencement of CPAB’s operations.
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July 2002 |
Federal and provincial financial and securities regulators, as well as Canada's chartered accountants, announce the creation of the CPAB, a new independent public oversight system for accountants and accounting firms that audit reporting issuers |
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April 2003 |
CPAB is incorporated as a corporation without share capital under the Canada Corporations Act |
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June 2003 |
The Canadian Securities Administrators (CSA) release draft rule 52-108 that would require auditors of reporting issuers to be members in good standing with the CPAB |
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October 2003 |
CPAB begins operations |
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March 2004 |
CSA rule 52-108 takes effect; Auditors of reporting issuers must be registered with CPAB |
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April 2009 |
Governance changes approved to enhance CPAB’s accountability, effectiveness and collaboration with provincial regulators of public accounting |
Structure
CPAB was incorporated in April 2003 as a corporation without share capital under the Canada Corporations Act as part of a series of reforms designed to improve investor confidence.
Members
CPAB has two classes of members: the Council of Governors, and the Provincial Audit Regulator Members.
Council of Governors
In addition to voting on by-law amendments, the Council of Governors appoints the Directors, the Chair and the Vice Chair. The Council also has the power to remove the Chair and Board members. The six member Council of Governors includes:
- The Superintendent of Financial Institutions of Canada
- The Chair of the Ontario Securities Commission
- The Chair of the Québec Autorité des marchés financiers,
- The Chair of the Canadian Securities Administrators (CSA) or, if the Chair is from Ontario or Quebec, the CSA selects an alternative as a governor
- Another governor selected by the CSA
- The ‘Accountant Council of Governors Member’ who is selected by the other Governors and who is both a professional accountant and has audit oversight regulatory experience
Provincial Audit Regulator Members
In addition to voting on by-law amendments, Provincial Audit Regulator Members appoint the external auditor. Provincial Audit Regulator membership is available to provincial audit regulators who oversee audit firms whose aggregate Canadian audit fee revenue from reporting issuers in the province is at least $7 million and whose disciplinary process and code of ethics meet standards established by the Board of Directors. Former Industry Members have been grandparented in as Provincial Audit Regulator Members and include a representative of each of the 10 provincial Institutes/Ordre of Chartered Accountants, as well as the Certified General Accountants Associations of British Columbia and Alberta.
Board of Directors
The Board has 11 directors, all appointed by the Council of Governors. At least four, but no more than five, must be professional accountants in order to ensure the Board has directors with accounting expertise. At least two directors must have regulatory experience or regulatory/audit oversight experience. Individual directors are appointed for a term of up to 3 years and are eligible for reappointment, provided that their total tenure does not exceed 6 years.
Click Here for the list of Directors.
Mission & Mandate
Mission
The mission of CPAB is set out at section 3.1 of its Articles of Incorporation.
"CPAB's mission is to contribute to public confidence in the integrity of financial reporting of public companies in Canada by promoting high quality, independent auditing."
Mandates
The mandates to support the mission are:
- Paticipation Requirements - Establish and monitor participation requirements for firms that audit reporting issuers in Canada.
- Quality Inspections - Oversee the implementation and monitor the ongoing effectiveness of a program of practice inspection of firms that audit reporting issuers in Canada.
- Discipline - Develop and implement a program of disciplinary action against firms or individuals that CPAB has determined did not perform audits in accordance with professional standards.
- Professional Standards - Monitor and support the continuing development of Canadian and International accounting, auditing and independence standards
- Communications - Build CPAB's profile by informing participants in the Canadian and International Capital Markets of CPAB's role, activities, findings and opinions.
- Audit Quality Awareness - Establish a program of ongoing discussions among regulators, the accounting profession, business and academia about:
- Best practices in the auditing of reporting issuers; and
- Current issues relating to the auditing profession particularly those affecting audit quality.
- International - Coordinate with international counterparts in:
- The inspection of Canadian auditing firms that audit public companies that are registered in jurisdictions other than Canada.
- The inspection of audit firms based outside of Canada that audit all or part of a Canadian reporting issuer.