Canadian Public Accountability Board censures RSM Canada over audit workpaper signoff backdating

The Canadian Public Accountability Board has publicly censured RSM Canada LLP and imposed remediation, training and monitoring requirements after finding violations of auditing and quality control standards related to backdated audit workpaper signoffs from at least 2017 until September 2023. CPAB identified 54 instances across 20 reporting issuer audit files and one affiliated entity file, including 21 signoffs entered after the audit report date. The settlement does not include an admission or denial by RSM Canada. RSM Canada’s electronic workpaper system allowed personnel to replace automatically generated signoff dates with earlier dates, making the records unreliable as evidence of when work or review occurred. CPAB found that the firm did not monitor this practice until late 2022 and that its subsequent review was too narrow, excluded substantive workpapers and did not adequately investigate identified cases. Deficiencies in file lockdown and retention also prevented CPAB from determining the full extent of the conduct. RSM Canada removed the manual date override functionality in September 2023 and enhanced its procedures for retaining signoff and access histories. Within 120 days, RSM Canada must review and strengthen its audit documentation policies and monitoring procedures and provide four additional hours of training on audit documentation, ethics and integrity to professionals involved in audits of Canadian reporting issuers. The firm must certify compliance to CPAB within 150 days and pay an assessment covering anticipated compliance monitoring costs, in addition to investigation costs already paid.