In October 2013, the Canadian Securities Administrators proposed amendments to the auditor oversight rules with the aim of strengthening public confidence in the integrity of financial reporting by reporting issuers. The final version was announced in a recent notice and substantially mirrors the October 2013 version.  Subject to ministerial approvals, National Instrument 52-108 Auditor Oversight (Instrument) and related amendments to National Instrument 41-101, National Instrument 51-102 and National Instrument 71-102 will come into force on September 30, 2014.

The amended auditor oversight rules will require the following:

  • a public accounting firm to provide notice to the relevant regulator when certain remedial actions have been imposed by the Canadian Public Accounting Board;
  • a public accounting firm to provide notice to clients that are reporting issuers if such public accounting firm is not in compliance with certain portions of the Instrument;
  • a reporting issuer to include additional prospectus disclosure when financial statements included in the prospectus were audited by an auditor who was not subject to oversight by the Canadian Public Accountability Board; and
  • a foreign reporting issuer to comply with the Instrument.

In addition, the rules have also reduced the applicable time periods for making, filing, or sending notices and other documents relating to a change of auditors.