Disciplinary proceedings were brought by the Canadian Public Accountability Board (“CPAB”) against Davidson & Company LLP (the “Firm”) in 2024. The proceedings related to:
a. In May of 2023, the Firm notified CPAB that during an investigation by a foreign regulator, the Firm had identified multiple violations of partner and engagement quality control reviewer rotation requirements related to two Canadian public companies between the years of 2020 and 2022; b. CPAB identified an additional 29 violations of the independence Rule of the CPABC Code and applicable legacy Rule, which occurred between 2013 and 2023 in relation to 14 Canadian public companies; and c. Violations of the Canadian Standard on Quality Control 1.
CPAB imposed requirements on the Firm and additionally, required the Firm to pay investigation costs of $100,000.
The Firm did not report to CPABC on a timely basis that it had been sanctioned by CPAB.
The Investigation Committee determined that the Firm contravened the following Rules of the CPABC Code of Professional Conduct:
102.3 Matters to be reported to CPABC: Other professional regulatory bodies
201.1 Maintenance of the good reputation of the profession
202.1 Integrity and due care
204.4 Independence -- Specific Prohibitions, Assurance and Specified Auditing
Procedures Engagements – Long association of senior personnel with a reporting issuer or listed entity audit client
501 Policies and procedures for compliance with professional standards
502 Policies and procedures for the conduct of a practice
The Investigation Committee recommended the Firm:
- pay a fine of $10,000;
- pay investigation expenses of $1,704; and
- accept the publication of a notice of this Determination and Recommendation which identifies the Firm.