(September 26 – 15:20 ET) – The Canadian Institute of Chartered Accountants now requires auditors to hold independence discussions with audit committees.
The CICA says that it has released guidelines requiring auditors to “openly and frankly discuss any relationship or issue that could bear on their independence. This includes such things as economic dependence on the client and the provision of services in addition to the audit.”
The move comes in response to an initiative by securities regulators, spearheaded by the Securities and Exchange Commission in the United States, to scrutinize auditor independence and bring in rules to enforce it. “The CICA is very clearly responding to concerns that have been voiced in the marketplace and by regulators. We are taking steps to ensure that public confidence in the audit function remains strong,” said CICA chair Bob Lord.
The CICA says giving audit committees the opportunity to increase their understanding of the issues related to the auditor independence will lead to improved corporate governance.
The new requirements are laid out in recent amendments to assurance guidance in the CICA Handbook. These amendments bring Canadian assurance guidance in line with recently issued guidance in the U.S. – part of the CICA’s strategy to harmonize Canadian guidance with U.S. and international best practices in assurance and financial reporting.
-IE Staff