Canadian regulators and audit leaders review audit quality as risks evolve

Canada’s financial regulators and audit leaders held a roundtable on audit quality and confidence in the country’s financial reporting.

The session was convened by the Office of the Superintendent of Financial Institutions, together with the Canadian Public Accountability Board (CPAB) and the Canadian Securities Administrators (CSA).

Senior representatives from audit practices, accounting professional bodies, standard setters and regulators took part in the discussions.

The meeting provided a forum to share views on risks affecting audit quality and the role of financial statement audits in maintaining Canada’s “trusted and credible capital markets”.

Dialogue centred on emerging trends, the risk environment and strategies to enhance public confidence in financial reporting.

Regulators and audit leaders discussed current and emerging risks and their implications for audit quality, as well as rapid technological developments including AI.

They also examined governance, culture and ethics within audit companies and across the wider reporting ecosystem.

Further, participants discussed fraud risks linked to financial crimes, geopolitical tensions, technological change and reliance on third parties.

They also considered expectations and challenges in auditing and assessing financial statement disclosures in a volatile environment.

The meeting concluded that Canada’s financial system “remains resilient”, but a more complex and fast-changing environment is heightening the need to identify and prioritise the most significant current and emerging risks.

External auditors were highlighted as essential to preserving integrity, trust and confidence in financial reporting.

Participants also stressed that stronger regulatory coordination and clearer guidance can reduce overlap, reinforce risk management and support sustainable growth.

Some key takeaways from the meeting were that rapid technological changes including AI are reshaping decision-making and creating both opportunities and new risks.

With fraud growing more sophisticated, organisations also need stronger prevention and detection strategies. The participants also highlighted the need for better financial statement disclosures – especially around estimates, judgement and uncertainty.

Financial Institutions Superintendent Peter Routledge said: “High quality audits are essential to financial system resilience.

“As risks evolve, from technology to geopolitics to market uncertainty, strong collaboration between regulators and audit professionals helps ensure Canadians can continue to rely on transparent and trustworthy financial reporting.”