FOR THE PROFESSION On July 17 the ...

FOR THE PROFESSION

On July 17 the CA profession announced the creation of the fresh Canadian Public Accountability Board (CPAB) in cooperation with federal and provincial regulators. We informed mostly members by email-if you did not receive our email please throw your updated email address to records@ica.bc.ca.

There's not a destiny of new information at this time, if it were not that here's a summary of the initiative:

In the wake of Enron WorldCom, and other corporate scandals, investors are nervous about capital markets, one as well as the other in the US and in Canada. The federal conduct and provincial regulators feel compell to address this issue, and we be wrought up we have a similar responsibility as a profession.

The just discovered CPAB is designed to restore investor confidence and foster the public interest. It will improve investor confidence and/or the quality of publicly available financial information in sum of two units ways: First, more frequent and more rigorous independent inspection of for what cause public company auditors do their work should boost the confidence of the marketplace and investors. next to the first as part of the CPAB, firms auditing public companies will agree to a number of enhancements, including tougher independence behaviors lead partner rotations for audits in succession a regular basis, adoption of secondary partner review of all audits, and other modern quality control requirements.

The bottom line is that the combination of recent requirements and a new independent theory of public oversight will strengthen the credibility of financial statements, and by means of extension, reinforce confidence in our capital markets.

What is the CPAB?

The CPAB is a national board that will make sure independent public oversight for all public company auditors.

Under the times of the CPAB, CA firms auditing public companies will voluntarily subdue themselves. to a number of modern requirements.

Under the of the present day practice inspection regime, the major CA firms conducting public company audits will be reviewed annually through a National Inspection Unit or NIU. (BC has single in kind of the strongest practice review programs in the native land and our Director of Practice Review & Licencing, Mike Essex CA, will be personally involved in the NIU's development) inferences from NIU reviews will be reported to the CPAB, and an on a level more comprehensive review of quality superintend practices will be conducted each three years. Firms conducting public company audits that do not live up to the CPAB's requirements may be restricted or suspended from conducting public company audits, fined, or equal expelled from the profession.

Implementation issues are still being appoint out. Consultations with the provincial institutes and with many of the firms in BC who do public company audits are ongoing. We will make secure that the interests of our firms are front-and-centre as details are unraveled If you have any particular affects please send them to me at rees@ica.bc.ca.

When does the CPAB start operations?

All major CA firms auditing public companies have voluntarily agreed to suitable the new CPAB requirements by the agency of October 2002. Other firms auditing public companies will ne to confront CPAB requirements within three years.

Is the CPAB independent from the CA profession?

Ye The CPAB board will be compos of 11 members, seven of whom will draw near from outside accounting. It will operate below the direction of a Council of Governors, which includes the Chair of the Canadian Securities Administrators, the Chair of the Ontario and Quebec securities regulators, the Superintendent of Financial Institutions of Canada, and the President/CEO of the Canadian Institute of Chartered Accountants. David Brown of the Ontario Securities

Commission (OSC) has agreed to wait on as the Council Chair.

Can other accounting designations still audit public companies?

While the vast majority of public company audits in Canada are done by dint of CAs, CPAB membership will be interpret to all auditors of publicly listed companies, including CGAs and CMAs, provided they appropriate CPAB requirements.

How does this strange system compare to the changes that are subordinate to consideration in the US?

Similarities include independent, public oversight; more rigorous practice inspection; and mandatory audit partner rotation. Beyond that, the recently made known changes reflect the differences between the Canadian and US regulatory and disciplinary theorys Unlike the US, Canada does not have a single, national regulatory body; therefore, what we have here is the creation of a arrangement that has brought together the federal and provincial regulators with the profession to create a solution that works well for Canada.

The CA profession has a leading character to play in supporting righteous corporate governance, in restoring investor confidence, and in protecting the public interest. The accountability board despatchs a strong signal: Canadas CAs intend to help restore confidence in our country's capital markets to support economic prosperity and maintain the kind of society in which we all want to live and work.

For more information forward the CPAB, visit www. cpab-ccrc.ca ccrc.ca