Canadian Public Accountability Board publishes audit committee insights on AI, cybersecurity, IFRS 18 implementation and public inspection reports

The Canadian Public Accountability Board has published a summary of insights from its 2026 outreach with audit committees and chief financial officers across Canada, highlighting the issues most frequently raised in oversight discussions. The publication shows audit committees focusing on how a more complex risk environment is affecting financial reporting, internal controls and audit quality, with artificial intelligence, cybersecurity, IFRS 18 implementation and CPAB’s new firm-specific public inspection reports identified as the main areas of attention. On artificial intelligence, discussions centered on governance boundaries, management’s ability to explain how AI is being used in operations, controls and estimates, and the growing reliance on third-party AI providers. Audit committees also focused on how auditors are using AI, seeking more transparency on audit applications, validation and challenge processes, implications for professional skepticism, future staffing models and possible effects on audit fees. Cybersecurity discussions emphasized vulnerability management, patching metrics, concentration on business-critical exposures, third-party cyber controls and data confidentiality in audits. On IFRS 18, CPAB reported uneven readiness among issuers, with some already testing impacts and others not yet engaged, while committees noted that the new disclosures on management-defined performance measures may require additional internal controls and reporting processes. Early feedback on CPAB’s firm-specific public inspection reports was generally that they improve discussions with auditors, but committees also stressed that the reports should be understood in the context of CPAB’s risk-based inspection methodology and used as one input among others in evaluating an auditor. IFRS 18 applies to annual reporting periods beginning on or after January 1, 2027 and requires comparative 2026 figures on adoption, which some committees said creates planning pressure ahead of first-quarter 2027 reporting. CPAB also noted that final changes to Canadian Securities Administrators National Instrument 52-112 are expected in fall 2026 with an effective date aligned to IFRS 18, and that it is assessing whether its oversight approach for smaller reporting issuers and audit firms should be adjusted while maintaining investor protection.