Frequently Asked Questions - Registration

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1. Is the On-Line, Web-based registration system the only way to become a participant?

   Yes, CPAB will not accept hard-copy registration documents, except for the signed Participation Agreement and Waivers/Consents.

2. Who is eligible to register with CPAB and participate in CPAB's oversight program?

   Any audit firm that wishes to audit Canadian reporting issuers may apply to participate in CPAB's oversight program.

3. Do foreign audit firms that are auditing companies that are reporting issuers in Canada need to register with CPAB if they already subject to independent oversight in their domestic jurisdiction?

   Yes. While foreign firms will be subject to CPAB oversight, CPAB will consider entering into reciprocal arrangements with independent oversight bodies in other jurisdictions.

4. My firm uses different names in different parts of Canada. Do we register as one firm or more than one?

   The answer depends on the legal structure of the firm. If the firm is a single national partnership that carries out its auditing practice using different names in different markets, it will register as a single firm. On the other hand, if the firm is a national or international association of firms with more than one partnership in Canada that audits the financial statements of reporting issuers, each partnership auditing the financial statements of reporting issuers should register separately with CPAB. Note that firms using more than one legal name should register each name under which they can sign audit reports for reporting issuer clients.

5. My firm is not sure whether a particular audit client is a reporting issuer. How can we find out?

   'Reporting issuer' is a term defined in the provincial securities acts, and there may be slight differences in the definition from one Act to another. However, a reporting issuer is generally an entity that has raised capital from the public and that must file annual audited financial statements with a securities commission. This includes mutual funds. Several securities commissions publish a list of reporting issuers on their websites. If you are in doubt about whether a particular client is a reporting issuer, you may wish to contact the relevant securities commission.

6. My firm has no reporting issuer clients, but wishes to register anyway so that we will be in a position to audit reporting issuer clients in future. Can we register with CPAB?

   Yes, but you will be subject to CPAB fees at the minimum level, as established by CPAB from time to time, and will be subject to quality inspections by or on behalf of CPAB.

7. My firm does not issue audit reports on the financial statements of any reporting issuer. However, we do some audit work on a subsidiary of a reporting issuer, and that work is relied upon by the firm that issues the auditor’s report on the issuer’s consolidated financial statements that are filed with a securities commission. Does my firm need to register with CPAB?

   Only a firm that issues an auditor’s report on financial statements filed with a securities commission must register.

8. How long does it take to get registered?

   Within 30 days of receipt of a firm’s Intent to Participate form, Quality Control Report and the required fee, CPAB will review the Intent to Participate form and Quality Control Report, and advise the firm whether further information or explanations are required. In the meantime, the firm will be able to prepare its Initial Registration form, but it will not be able to submit it until CPAB has all the information it requires with respect to the Intent to Participate form and Quality Control Report.

9. How does CPAB decide whether to approve my registration?

   CPAB is not using the registration process with the objective of screening out firms from becoming participants. CPAB hopes that every applicant firm will gain status as a participant. However, if the information submitted as part of registration appears to be inaccurate or incomplete, CPAB will delay registration until the firm rectifies the information deficiencies. If, exceptionally, CPAB proposes to disallow a firm from registering, CPAB will provide the applicant firm with written reasons for the proposed disallowance and an opportunity for a hearing where it may present its case for being allowed to register.
   

10. How much will it cost for registration and when will payments be due?

    The fee to be remitted with the Intent to Participate form is a fixed fee determined by the number of reporting issuer clients that a firm has as reported by the firm. The fee structure is set out in CPAB Rule 802 and in a fee notice posted on CPAB's website.

11. Will registration information be made public by CPAB?

    Except for the fees charged by participating audit firms to individual clients, as reported by the firm to CPAB, CPAB intends to make the firms' profiles available to the public through its website.

12. How detailed should we be in describing our quality control policies and procedures?

    The purpose of the Quality Control Report is to obtain information about the quality controls in place, or planned in the immediate future, for all firms intending to be participants in CPAB’s Oversight Program. To assist firms in organizing their responses, CPAB has developed a form organized around the major elements of quality control, based on standards that have been proposed for use in Canada by the national and provincial institutes of Chartered Accountants. For each sub-element of quality control, firms should submit a summary description in clear and concise language, of their relevant policies and practices. The last sub-element in each element is a dialogue box that allows firms to provide any additional information or commentary they believe would assist CPAB in evaluating their responses for that element.
     
    CPAB recognizes that the nature of policies and procedures may differ between large and smaller firms, and that for smaller firms, policy development and documentation may be less formal. However, the basic principles of quality control and independence apply to all firms that intend to participate in audits of reporting issuers.

13. Instead of completing the Quality Control Report, can we provide CPAB with the report we have drafted for filing with the PCAOB in the United States or another audit regulator?

    The quality control report prepared for other bodies is not sufficient for CPAB purposes. CPAB wishes to understand how the firm controls quality with respect to each element of quality set out in the Canadian standards, and the Quality Control Report template reflects that structure. A quality control report already drafted for the purposes of other regulators would not be organized in the same way, nor would it necessarily cover all of the elements of quality.

14. The Intent to Participate form requires information about each of the firm’s practice offices and the Initial Registration form is expected to require the names of individuals authorized to sign audit reports on the financial statements of reporting issuers, and the names of reporting issuer audit clients. How current does this information have to be?

    CPAB expects that the information will be as current as possible and in any event current as of a date not more than 90 days prior to the date when it is submitted to CPAB.

    Foreign firms need only provide details of offices and partners responsible for the audits of entities that are reporting issuers in Canada.

15. What are the required procedures when there is a merger between two or more audit firms when one or more of the firms are participating audit firms?

    a)    Since a merger is a material change per Rule 216 (a), the participating audit firms should notify CPAB within 15 days of the merger.

    b)    For CPAB registration purposes the continuing firm is considered to be the participating audit firm. The firms which are not continuing are considered to be predecessor firms.

    c)    If the firm name changes, a new Participation Agreement should be submitted.  PCAOB registrants should also submit a Consent and Agreement – Section 7.

    d)    The continuing firm should update the firm information on the website.

    e)    If the continuing firm is already a participating audit firm and the firm name is unchanged, the procedures outlined in points f) through h) below only apply to predecessor firms.

    f)     Reporting issuer clients and individuals authorized to sign audit reports that were previously associated with predecessor firms should be added to the continuing firm’s information on the website.

    g)    Predecessor firms should complete an online withdrawal form and also submit a written notification in accordance with Rule 250.

    h)    Former partners/officers or designated professionals of predecessor firms who are involved in the audit of a Canadian reporting issuer should sign the Consent & Agreement (Rule 213) and Agreement & Release (Rule 214) on behalf of the continuing firm.

    i)      The continuing firm should submit a letter certifying compliance with Rules 213 & 214.

     

16. What are the required procedures when a participating audit firm changes its legal name?

    a)    Update firm information on CPAB's website to reflect the new firm name and the former name in brackets.
    b)    Submit a new Participation Agreement under the new firm name.
    c)    Submit a new certificate of compliance with Rules 213 and 214 under new firm name.  
    d)    PCAOB registrants should submit a Consent and Agreement – Section 7.