The Firm was the auditor of public companies. Pursuant to Rule 101.2 of the Code, the Firm self-reported to CPABC that on three occasions, it had not been sufficiently independent from its clients because it had not rotated the engagement partner responsible for the audits for more than seven years. As a result, its objectivity on the audits was compromised.
In a related inspection by the Canadian Public Accountability Board (“CPAB”), CPAB concluded that the Firm did not meet professional standards with respect to the sample audits that CPAB had selected for inspection. The Firm is no longer registered with CPABC in public practice.
The Investigation Committee determined the Firm contravened the CPABC Code of Professional Conduct as follows:
201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
202.2 - Objectivity
204(20) - Independence (long association of senior personnel)
206 - Compliance with professional standards
The Committee recommended that the Firm:
- accept a reprimand;
- pay a fine of $2,500; and
- pay partial expenses of $2,228 plus GST of $111.40