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I have heard that a new regulatory board has been formed to audit the auditors. What is it called and what is its role?

In July 2002, in response to a number of auditing scandals that have recently arisen, the Canadian Securities Administrators, the Office of the Superintendent of Financial Institutions and the Investment Dealers Association announced a new oversight system to ensure the quality of public companies’ audit policies and procedures.

This new oversight system requires a more rigorous inspection of the auditors of public companies, the formulation of tougher auditor independence rules and the creation of quality control requirements for firms auditing public companies. These new requirements will apply to all auditors of public companies and will be administered by a new Canadian Public Accountability Board. The mission of the CPAB will be to contribute to public confidence in the integrity of the financial accounting systems of Canadian public companies. Failure to remedy the deficiencies identified by the CPAB will result in sanctions and will be communicated to the appropriate regulator, who may take action. The CPAB will issue an annual report to the public. David Brown, the head of the Ontario Securities Commission, will chair the group mandated to appoint CPAB members. The CPAB will be composed of 11 individuals, including seven from outside the CA profession.