October 2013 Barbara Collins On October 17, 2013, the Canadian
Securities Administrators (the "CSA") published a request
for comments on proposed amendments to National Instrument 52-108
Auditor Oversight ("NI 52-108"). The amended NI 52-108 is
intended to replace the current NI 52-108 in its entirety.
The purpose of NI 52-108 is to ensure the integrity of financial
reporting of public companies by ensuing quality, independent
auditing. The main focus of the amendments to NI 52-108 is the
change of the triggers for when a public accounting firm is to
deliver to the regulator a notice relating to remedial action
imposed by the Canadian Public Accountability Board
("CPAB"). The CSA is also proposing to amend "change
in auditor" rules so that reporting issuers provide more
timely and complete information to the market. In addition, a new
prospectus requirement is being considered that would require
issuers to disclose that an auditor is not subject to the CPAB
oversight program. CSA is also proposing an amendment to disclosure
requirements for foreign issuers requiring them to comply with NI
52-108 (which aligns their auditor and auditor oversight
Below is a summary of the amendments:
require a public accounting firm to deliver a notice to the
regulator if CPAB imposes certain types of remedial actions
regardless of the labels CPAB attaches to them (e.g.,
"sanction" or "restriction");
require a public accounting firm to notify its reporting issuer
clients if it is not in compliance with certain requirements in the
require disclosure in a prospectus, if the financial statements
of the issuer included in the prospectus were audited by an auditor
that, as 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
reduce the filing period from 30 days to 14 days for a change
of auditor notice required by National Instrument 51-102 Continuous
Disclosure Obligations ("NI 51-102") following the
termination, resignation or appointment of an auditor by a
require a predecessor auditor or a successor auditor to notify
the regulator on a timely basis if a reporting issuer does not file
a change of auditor notice required by NI 51-102, and
add a condition to the current exemptions in National
Instrument 71-102 Continuous Disclosure and Other Exemptions
Relating to Foreign Issuers relating to audited financial
statements of SEC foreign issuers and designated foreign issuers to
require compliance with NI 52-108. This aligns the requirements for
foreign issuers with the current requirement for an auditor of a
foreign issuer to comply with NI 52-108.
The CSA is not proposing changes to the notification rules for
when an auditor must provide notice to the audit committee of a
reporting issuer when remedial actions have been imposed by CPAB.
Any such changes have been deferred until further consideration is
given to the recommendations by the Enhancing Audit Quality
initiative that more information on CPAB inspection results be
given to audit committees.
The comment period on the proposed amendments is open until
January 15, 2014.
The foregoing provides only an overview. Readers are
cautioned against making any decisions based on this material
alone. Rather, a qualified lawyer should be consulted.
The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).