The Canadian Public Accountability Board published a supervision note on access to foreign jurisdictions, explaining how its risk-based inspections identify reporting issuers with significant foreign operations and how it seeks access to component auditor working papers when audit work is performed outside Canada. The update also summarizes 2024 reporting by participating audit firms on significant foreign operations and component auditor use. In 2024, participating audit firms reported 819 significant operations across the United States, the United Kingdom and Australia, with 94 instances of component auditor use affecting 85 reporting issuers and aggregate market capitalization of $1,169.8B at December 31, 2024. Across all other foreign jurisdictions, firms reported 627 significant operations spanning 110 jurisdictions, with 248 instances of component auditor use in 73 jurisdictions affecting 218 reporting issuers and aggregate market capitalization of $607.3B. “Significant operations” are subsidiaries or components whose assets or revenues constitute 20% or more of a reporting issuer’s consolidated assets or revenues. Inspection work starts with engagement files accessible in Canada; if CPAB determines it needs access to component auditor working papers in a foreign jurisdiction, it notifies the relevant Canadian participating audit firm and often obtains voluntary access from the component audit firm. Where a memorandum of understanding (MOU) or equivalent arrangement exists with a foreign audit regulator, CPAB follows the process set out; if not, it can request access under the process in National Instrument 52-108. CPAB reported MOUs or equivalent arrangements with audit regulators in 32 countries, including fully negotiated MOUs with the United States, the United Kingdom, Australia, France, Germany, Ireland, Japan, the Netherlands, Switzerland, Austria and Spain, with negotiations underway with Greece, and noted prior denials of access in Bermuda, China, Mexico and Tunisia.
Canadian Public Accountability Board 2025-03-01
Canadian Public Accountability Board details how it obtains access to foreign component auditor working papers and reports 2024 cross-border audit exposure
The Canadian Public Accountability Board released a supervision note on risk-based inspections for issuers with significant foreign operations and access to component auditor working papers. In 2024, audit firms reported 819 significant operations in the U.S., U.K., and Australia, and 627 in 110 other jurisdictions, affecting issuers with a combined market capitalization of $1,777.1B. The Board highlighted MOUs with audit regulators in 32 countries and noted access challenges in Bermuda, China, Mexico, and Tunisia.