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  1. Home
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  3. Role of the Audit Committee

Role of the Audit Committee

Audit committees play a pivotal role in enhancing audit quality.
 

Investors want and expect a quality audit and effective audit committees and auditors build confidence in the integrity of financial reporting.

Audit committees are responsible for creating an environment that accommodates an open discussion in a culture of integrity, respect and transparency between management and auditors. Audit committees also oversee auditor work and need to understand the audit strategy, be satisfied that it addresses the major risks, and make sure auditors exercise appropriate professional skepticism. They must also ensure that the auditor has an appropriately independent mindset from management and is truly objective. This enables the audit committee to draw conclusions about the effectiveness of the audit.

Audit committees should ask their auditors what they are doing to promote consistency of audit execution, whether additional resources are available if needed to do the audit, and who in the audit firm is accountable for the quality of the work done.

CPAB believes audit committees should have frank discussions with their auditors about what is a reasonable fee for audit services. However, if the quality of the audit is affected by a fee that is less than reasonable, the audit committee is doing a disservice to shareholders. Audit committees need to ensure that audit fees are fair and that they are obtaining a quality audit.

CPAB regularly meets with audit committee chairs to discuss audit quality insights through one on one meetings and audit quality roundtables.

For updates on CPAB’s activities related to our regulatory oversight during the pandemic, visit our COVID-19 page.

CPAB Protocol

In 2013 CPAB consulted with key stakeholders including corporate directors, audit firms and securities regulators to develop a Protocol for Audit Firm Communication of CPAB Inspection Findings with Audit Committees (Protocol). Audit firms who voluntarily participate in the Protocol share significant file-specific inspection findings with their clients’ audit committees.

RESOURCES


> Inspections Reports
30/03/2021
Audit Quality Insights Report: 2020 Annual Audit Quality Assessments
> Event Highlights
10/12/2020
CPAB 2020 Audit Committee Highlights – A Year-end Review
> Event Highlights
06/08/2020
2020 Audit Committee Forums Highlights
> Event Highlights
25/03/2020
2019 Financial Institutions Forum Highlights
> Event Highlights
06/12/2019
2019 Oil and Gas Industry Forum Highlights

THE CANADIAN PUBLIC ACCOUNTABILITY BOARD

The Canadian Public Accountability Board (CPAB) is Canada’s independent, public accounting firm regulator. Charged with overseeing audits performed by registered public accounting firms, CPAB contributes to public confidence in the integrity of financial reporting and is committed to protecting Canada’s investing public. CPAB promotes sustainable audit quality through proactive regulation, dialogue with domestic and international stakeholders, and practicable insights to inform capital market participants. CPAB has offices in Montreal, Toronto and Vancouver.

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