OSC contacts audit firms for information about internal policies and procedures

For Immediate Release OSC

TORONTO – The Ontario Securities Commission (OSC) announced today it will be making targeted inquiries to certain public accounting firms that conduct audits of Ontario reporting issuers.

As a result of ethical violations identified by regulators in Canada and other jurisdictions, the OSC will request specific information about audit firms’ internal policies and procedures. The scope of this review does not presently include individual audits of reporting issuer financial statements previously filed with the OSC.

Among other things, the OSC will seek information about firm policies related to compliance with relevant ethical requirements and the operation of internal whistleblower programs. The OSC will also request details about firm procedures with respect to the dating of audit work performed and the implementation of internal training courses.

As gatekeepers of Ontario’s capital markets, auditors play a critical role in investor protection by ensuring that audited financial statements can be reasonably relied upon when making investment decisions. Any actual or perceived issues related to the integrity of financial reporting can undermine investor confidence.

As part of this initiative, the OSC will communicate with and consult the Canadian Public Accountability Board (CPAB), the Canadian regulator which oversees public accounting firms that audit Canadian reporting issuers. CPAB will continue to address ethics issues through its inspection and enforcement processes, which have to date resulted in the imposition of enforcement actions on two of the four largest firms, in response to self-reported breaches of professional standards. 

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair, efficient and competitive capital markets and confidence in the capital markets, to foster capital formation, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at http://www.osc.ca.

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