The Canadian Public Accountability Board (CPAB) published an enforcement report on Clearhouse LLP imposing a restriction on its public company audit practice, a public censure, and a set of remediation requirements after a 2024 inspection identified five significant inspection findings, each treated as a separate violation event. The restriction prohibits Clearhouse from accepting new high and moderate risk reporting issuers, including those arising from initial public offerings, reverse takeovers or similar transactions, and treats an existing private company audit client that becomes a reporting issuer as a new reporting issuer for these purposes. CPAB linked the action to elevated inspection results across two consecutive inspections, noting that a 2022 inspection of two files identified three significant inspection findings and that every file reviewed in 2022 and 2024 had at least one significant finding; the 2024 findings involved breaches of multiple Canadian Auditing Standards including standards on fraud, risk assessment, responses to assessed risks, audit evidence, sampling, accounting estimates and group audits. Required measures include using external professionals for engagement quality reviews on certain moderate and high risk reporting issuers and for an independent review of the firm’s system of quality management, engaging an external party to deliver training to reporting issuer assurance partners and staff, and implementing strengthened engagement budgeting, resource scheduling and portfolio allocation review processes. The enforcement actions took effect on June 2, 2025 and will remain in place until CPAB completes a follow-up inspection and the firm has, to CPAB’s satisfaction, implemented the measures and demonstrated sustained improvement in audit quality.
Canadian Public Accountability Board 2025-06-11
Canadian Public Accountability Board restricts Clearhouse LLP from taking new high and moderate risk reporting issuer audits and issues public censure
The Canadian Public Accountability Board (CPAB) imposed restrictions on Clearhouse LLP's public company audit practice due to significant inspection findings in 2022 and 2024. The enforcement includes a ban on accepting new high and moderate risk reporting issuers, public censure, and remediation requirements involving external reviews and training. These measures will remain until a follow-up inspection confirms satisfactory improvements in audit quality.