Canada’s audit regulator releases report on Big Four accounting firms

Significant inspection findings lower in 2017; CPAB views longer term consistency through a quality systems lens.

In its public report on the 2017 inspections of Canada’s four largest accounting firms (Big Four ― Deloitte LLP, EY LLP, KPMG LLP, PwC LLP) released today, the Canadian Public Accountability Board (CPAB) reported a reduction in inspection findings across the four firms in 2017 compared to last year. It inspected 86 (2016:87) audit engagement files – six of those files had significant findings compared to 11 files in 2016 and 24 files out of 93 in 2015.

“While each Big Four firm demonstrated an acceptable level of inspection findings overall, CPAB continued to find exceptions where they are still not executing consistently across the organization,” said Brian Hunt, CEO, CPAB. “The need to fully embed audit approach improvements into every practice and every engagement still requires more attention.”

For the four firms, the majority of inspection findings related to significant accounting estimates, executing audit fundamentals, and professional judgment and skepticism. A significant inspection finding is defined as a deficiency in the application of generally accepted auditing standards that could result in a restatement. There are two restatements to date.

To better identify and understand impediments to improving firm quality systems and consistency in how audits are performed, CPAB will evolve its inspection approach in 2018 to incorporate additional operational reviews of the effectiveness of firm structure, accountabilities, quality processes, and culture.  The new approach will launch in the 2018 inspection cycle beginning in March 2018 at the Big Four firms. CPAB expects to apply the new model to the 10 other annually inspected firms in 2019 or beyond.

The Big Four firms share significant inspection findings and CPAB’s public reports with their clients’ audit committees.  CPAB strongly encourages audit committees to discuss the public report and any file-specific findings, if applicable, with their auditor.

CPAB’s 2017 Big Four Report is available at

About CPAB

The Canadian Public Accountability Board (CPAB) is Canada’s audit regulator responsible for the regulation of public accounting firms that audit Canadian reporting issuers. CPAB operates independently from the provincial regulatory authorities who oversee the accounting profession.  A world-class audit regulator, CPAB contributes to public confidence in the integrity of financial reporting, which supports Canada’s capital markets.  CPAB operates from offices in Montréal, Toronto and Vancouver.

9 replies
  1. Chadwick Coger
    Chadwick Coger says:

    Mega good! Interesting tips over this website. It’s pretty worth enough for me. In my opinion, if all site owners and bloggers made good content as you did, the web will be a lot more useful than ever before. I could not refrain from commenting. I’ve spent 3 hours looking for such article. I’ll also share it with some friends interested in it. I’ve just bookmarked this website. Greetings from San Francisco!

  2. Elvira Simkulet
    Elvira Simkulet says:

    After going over a number of the articles on your web site, I honestly like your technique of blogging. I bookmarked it to my bookmark site list and will be checking back in the near future. Please check out my web site too and let me know your opinion.

  3. Wally Scharbrough
    Wally Scharbrough says:

    I’m amazed, I must say. Rarely do I encounter a blog that’s both educative and interesting, and let me tell you, you’ve hit the nail on the head. The issue is something which not enough people are speaking intelligently about. I’m very happy that I stumbled across this in my hunt for something relating to this.


Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.