|August 5, 2014|
Previously published on August 4, 2014
On July 17, 2014 the Canadian Securities Administrators (CSA) announced that it was repealing and replacing National Instrument 52-108 Auditor Oversight (the “Instrument”) and its companion policy with the purpose of contributing to public confidence in the integrity of financial reporting of reporting issuers by prompting high quality, independent auditing.
The CSA indicated that the revised Instrument would require (i) a public accounting firm to deliver a notice to a regulator or audit committee when certain remedial actions have been imposed by the Canadian Public Accountability Board (CPAB) and (ii) a public accounting firm to deliver a notice to its reporting issuer clients if it is not in compliance with certain requirements in the Instrument.
Along the same lines, the CSA has made amendments other national instruments designed to enhance the integrity of financial reporting, as follows:
National Instrument 41-101 General Prospectus Requirements (“NI 41-101”) will provide greater transparency by requiring additional disclosure in a prospectus when financial statements of the issuer included in the prospectus were audited by an auditor that, at the date of the most recent auditor’s report on financial statements included in the prospectus, was not required to be subject to, and was not subject to, the oversight program of the CPAB;
National Instrument 51-102 Continuous Disclosure Obligations (“NI 51-102”) and its companion policy will provide for more timely information by reducing the filing period requirements for a change of auditor notice and requiring a predecessor auditor or a successor auditor to notify the regulator if a reporting issuer does not a file a change of auditor notice required by NI 51-102;
National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers (“NI 71-102”) and its companion policy will provide for the clarification of a foreign issuer’s obligations and its auditor’s obligations relating to auditor oversight by requiring a foreign issuer to comply with the Instrument.
The CSA has indicated that provided all necessary ministerial approvals are obtained, the new rules will come into force on September 30, 2014.