CPAB Rule Changes: What Naming Names in 2026 Means for Canadian Audit Firms

Starting Q1 2026, the Canadian Public Accountability Board (CPAB) will publicly disclose audit firms and the details of significant inspection findings. What does this mean for transparency, trust, and your firm's reputation?

In a landmark shift set to reshape Canada's audit landscape, the Canadian Public Accountability Board (CPAB) will, for the first time in its history, begin publicly naming audit firms found to have significant deficiencies in their annual inspection reports. This change, effective from the first quarter of 2026, signals a move toward greater transparency and accountability in a sector often criticized for its opacity.

For audit firms, public companies, and financial stakeholders, this change carries wide-reaching implications. This blog explores the reasoning behind the policy shift, what it means for Canadian audit firms, and how the profession must evolve to meet these new standards.

The Background: Why CPAB is Changing Course

Since its inception in 2003, CPAB has operated largely behind closed doors, providing feedback and reports to audit firms in private. Historically, even when significant deficiencies were found in audit engagements, the names of the firms involved were withheld from public disclosure.

However, this practice has faced increasing criticism. Investors, regulators, and advocacy groups have argued that a lack of transparency undermines public trust in financial reporting. In response, CPAB conducted a comprehensive consultation in 2023-2024, gathering input from stakeholders including audit firms, public companies, institutional investors, and the broader public.

As a result, CPAB announced in early 2025 that beginning with inspection reports issued in Q1 2026, audit firms with significant findings will be named directly in the reports, along with a description of the deficiencies.

What Will Be Disclosed?

Under the new policy, CPAB will:

• Identify the audit firms that were inspected and found to have significant deficiencies.

• Detail the nature of those deficiencies, including specific shortcomings in audit procedures, risk assessment, and documentation.

• Outline any remediation plans or actions taken by the firm to address these issues.

Importantly, while individual auditors or clients will not be named, the level of detail provided will make it clear which firms are falling short of expected audit quality standards.

The Implications for Audit Firms

This shift brings Canadian practices closer in line with those in the U.S. and U.K., where public disclosure of inspection findings has long been standard. For audit firms in Canada, however, this represents a significant reputational risk.

Increased Pressure on Quality Control

Firms will now have a heightened incentive to invest in internal quality controls, staff training, and audit methodology improvements. The risk of public embarrassment—or worse, loss of clients—will force firms to take inspection readiness more seriously.

Client Confidence at Stake

Competitive Dynamics

Talent and Recruitment

How Firms Should Prepare

With the countdown to Q1 2026 already underway, Canadian audit firms must act decisively. Here are key areas of focus:

• Conduct Internal Mock Inspections: Simulate CPAB reviews internally to identify and rectify potential deficiencies in advance.

• Enhance Documentation Standards: Poor documentation remains one of the most cited deficiencies. Ensure all audit work is thoroughly and accurately recorded.

• Invest in Continuous Training: Audit standards evolve rapidly. Regular staff training on new IFRS developments, risk assessment techniques, and ethical standards is essential.

• Strengthen Independence Protocols: Ensure auditors are maintaining appropriate independence from their clients, a key focus of CPAB inspections.

Broader Impact on Transparency and Investor Confidence

This move is widely seen as a win for investors and the public. By shining a light on poor audit practices, CPAB aims to bolster confidence in Canada’s capital markets. "Public disclosure holds auditors accountable not just to CPAB, but to the investing public," says Susan Lin, senior analyst at Canadian Investor Advocacy Group. "It aligns incentives and promotes a culture of excellence."

While some firms may initially resist the change, the long-term effect is likely to be positive. Enhanced trust in audit quality can strengthen the credibility of financial reporting across sectors, benefiting both auditors and their clients.

Conclusion: A New Era for Audit Accountability

As CPAB moves toward greater transparency, the audit profession in Canada faces a critical inflection point. Firms that proactively adapt to these new expectations—focusing on quality, ethics, and public trust—will not only avoid the reputational risk of being named but also position themselves as leaders in a more open and accountable marketplace.

For Canadian audit firms, the message is clear: evolve, or be exposed.