The Canadian Securities Administrators have issued a notice laying out their views on issuers and mutual funds who change auditors, in light of the demise Arthur Andersen LLP Canada.

Andersen Canada stopped practising public accounting on June 3 and, with the exception of the Andersen Canada assurance practice in Manitoba, substantially all of the partners and staff of Andersen Canada joined Deloitte & Touche LLP. The partners and staff of the Andersen Canada practice in Manitoba joined Ernst & Young LLP. The end of Andersen Canada’s practice created a need for numerous reporting issuers to appoint a new auditor.

CSA rules require notification when a reporting issuer changes its auditor. As well, the rules require securityholder approval before a mutual fund changes its auditor.

The CSA notice says that reporting issuers and mutual funds that appoint new auditors as a result of Andersen Canada’s demise will not be expected to comply with these rules, “when there is in substance a continuation of the same auditor. CSA staff are of the view that this is the case when a reporting issuer appoints as its successor auditor the public accounting firm that has assumed the Andersen Canada partners and staff previously responsible for the audit.”

Where a reporting issuer initiated the replacement of Andersen Canada prior to June 3, CSA staff will expect filings to be made in accordance with the usual rules.