Canada

Canada’s financial reporting framework is established through federal and provincial legislation, including the Canada Business Corporations Act and the provincial and territorial Business Corporations Acts. These laws require entities to prepare general-purpose financial statements in accordance with generally accepted accounting principles (GAAP). The CPA Canada Handbook – Accounting is recognized as the principal source of Canadian GAAP.

The Accounting Standards Board (AcSB), an independent standard-setting body, is responsible for establishing accounting standards for private sector entities. Publicly accountable enterprises are required to apply International Financial Reporting Standards (IFRS) Accounting Standards included in Part I of the Handbook. The AcSB incorporates IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB) following its due process. Publicly accountable enterprises include entities, other than not-for-profit organizations, that have issued or are in the process of issuing debt or equity instruments in a public market, or that hold assets in a fiduciary capacity for a broad group of outsiders as one of their primary businesses.

Private enterprises apply Accounting Standards for Private Enterprises in Part II of the Handbook. Not-for-profit organizations apply Accounting Standards for Not-for-Profit Organizations in Part III, while pension plans and similar benefit plans apply accounting standards for pension plans in Part IV. Private enterprises and not-for-profit organizations may also elect to apply IFRS Accounting Standards. Entities applying Parts II to IV follow domestic standards established by the AcSB, which differ from IFRS Accounting Standards.

Public sector accounting standards are established by the Public Sector Accounting Board (PSAB), an independent standard-setting body. The CPA Canada Public Sector Accounting Handbook contains Public Sector Accounting Standards (PSAS), which apply to governments, government components, government organizations, and partnerships that issue general-purpose financial statements unless specifically directed or permitted to use alternative standards by PSAB.

In 2020, PSAB decided to continue developing Canadian PSAS while aligning future standards with the principles of International Public Sector Accounting Standards (IPSAS). Where an IPSAS exists for a project undertaken by PSAB, the principles of that IPSAS are used as the starting point for developing the corresponding Canadian standard. PSAB also updated the GAAP hierarchy to position IPSAS as the first accounting framework to consult among pronouncements issued by other authorized standard setters.

Mandatory audit requirements are established under federal and provincial legislation, including the Canada Business Corporations Act and the provincial and territorial Business Corporations Acts. These laws require audits to be conducted in accordance with generally accepted auditing standards (GAAS). The CPA Canada Handbook – Assurance is recognized as the principal source of Canadian GAAS.

The Auditing and Assurance Standards Board (AASB), an independent standard-setting body, is responsible for establishing auditing and assurance standards. The AASB adopts International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board (IAASB) as Canadian Auditing Standards (CAS) and adopts quality management standards as Canadian Standards on Quality Management (CSQM). The AASB’s objective is to adopt these standards without modification; however, limited amendments may be made where necessary in accordance with strict amendment criteria. The CAS constitute Canadian GAAS for audits of financial statements.

The Canadian accountancy profession is regulated at the provincial and territorial level. The Chartered Professional Accountant (CPA) designation is governed and granted by provincial and territorial CPA bodies under their respective legislation. CPA Canada is not a regulatory body and does not regulate CPAs. Membership in the applicable provincial or territorial CPA body remains mandatory for use of the CPA designation.

Provincial and territorial CPA bodies are responsible for granting and regulating the CPA designation; maintaining member and firm registries; licensing public accounting services; establishing initial and continuing professional development requirements; setting ethical and professional conduct requirements; conducting quality assurance inspections; and carrying out investigative and disciplinary processes. Although regulation is exercised by each provincial and territorial body, the bodies continue to collaborate nationally on common education, standards, and public interest matters.

Entry into the CPA profession is based on common national requirements administered through the provincial and territorial CPA bodies. Candidates are generally required to complete an undergraduate degree, the CPA Professional Education Program, relevant practical experience, and the Common Final Examination.

Auditors of reporting issuers are also subject to oversight by the Canadian Public Accountability Board (CPAB). Under National Instrument 52-108 Auditor Oversight, public accounting firms that audit Canadian reporting issuers must participate in CPAB’s oversight program. CPAB registration includes an assessment of the firm’s structure, system of quality management, audit experience, licensing with the relevant provincial CPA body, and capacity to perform audits in accordance with Canadian Auditing Standards.

CPAB conducts audit quality assessments through inspections of selected high-risk sections of audit engagement files and evaluations of firms’ systems of quality management. Firms auditing 100 or more reporting issuers are inspected annually, firms auditing between 50 and 99 reporting issuers are inspected at least every two years, and other firms are inspected periodically based on CPAB’s risk analysis. CPAB’s regulatory framework also includes enforcement mechanisms to address audit quality deficiencies.

Independent public oversight of audits of reporting issuers in Canada is performed by the Canadian Public Accountability Board (CPAB). CPAB operates as Canada’s independent public company audit regulator and is responsible for promoting high-quality external audits and contributing to public confidence in the integrity of financial reporting. National Instrument 52-108 Auditor Oversight requires reporting issuers to engage only auditors that participate in CPAB’s oversight program.

CPAB is recognized as an auditor oversight body across Canadian jurisdictions. In Ontario, its authority is supported by the Canadian Public Accountability Board Act, 2006, while in Québec CPAB operates through formal cooperation agreements with the Ordre des CPA du Québec. CPAB is also recognized by provincial securities regulators and other provincial authorities as the independent oversight body for auditors of reporting issuers.

CPAB is responsible for registering and overseeing participating audit firms that audit reporting issuers, conducting inspections of audit engagement files and firms’ systems of quality management, investigating potential deficiencies, imposing remedial actions and sanctions where necessary, and contributing comments and recommendations on accounting and auditing standards to relevant standard-setting bodies. Its regulatory assessments focus on audits of reporting issuers and do not extend to audits of private companies, not-for-profit organizations, or other non-public entities.

CPAB is a member of the International Forum of Independent Audit Regulators, supporting international cooperation and the exchange of best practices among independent audit oversight authorities.

CPA Canada

Chartered Professional Accountants of Canada (CPA Canada) was established in 2013 following the unification of the Canadian accounting profession. The organization was created through the merger of the Canadian Institute of Chartered Accountants and the Society of Management Accountants of Canada, followed by the integration of the Certified General Accountants Association of Canada in 2014. This consolidation created a single national organization representing the Chartered Professional Accountant (CPA) profession across Canada.

CPA Canada operates as the national professional accountancy organization representing the profession at the national and international levels. While regulation, licensing, and discipline of CPAs are carried out by the provincial and territorial CPA bodies, CPA Canada supports the profession through national coordination, advocacy, education, and standard-setting activities.

Its principal responsibilities include contributing to national and international accounting, auditing, and assurance standard-setting; representing the profession before governments, regulators, and public interest stakeholders; supporting the development of professional guidance and educational resources; administering the Common Final Examination in collaboration with the provincial and territorial CPA bodies; and promoting high standards of professional and ethical conduct across the profession.

CPA Canada also supports the profession’s Public Trust Committee, which facilitates collaboration among provincial and territorial CPA bodies on ethics, quality assurance, and investigative and disciplinary processes in areas where harmonization is appropriate and permitted by legislation.

In addition to being a member of the International Federation of Accountants, CPA Canada is a member of the Global Accounting Alliance, the Confederation of Asian and Pacific Accountants, the Institute of Chartered Accountants of the Caribbean, and the International Federation of Francophone Accountants (Fédération Internationale des Experts-Comptables Francophones).

The quality assurance (QA) review system in Canada is established through shared oversight by the Canadian Public Accountability Board (CPAB) for audits of reporting issuers and the provincial and territorial Chartered Professional Accountant (CPA) bodies for other assurance and related engagements performed by CPA firms.

Under National Instrument 52-108 Auditor Oversight, audit firms that audit reporting issuers must participate in CPAB’s oversight program. CPAB conducts audit quality assessments through inspections of selected high-risk audit engagement files and evaluations of firms’ systems of quality management. CPAB inspects firms auditing 100 or more reporting issuers annually, firms auditing between 50 and 99 reporting issuers at least every two years, and other participating firms periodically based on risk.

Provincial and territorial CPA bodies conduct practice inspections for CPA firms performing assurance, compilation, and other specified engagements not covered by CPAB. The provincial bodies apply a harmonized approach to inspections and evaluate compliance with professional standards, including the CPA Canada Handbook – Assurance and applicable quality management standards.

The QA review framework is operational and applies to audits of reporting issuers and other mandatory assurance engagements through CPAB and provincial CPA body inspection programs. Accordingly, the jurisdiction-level QA review system is aligned with the requirements of Statement of Membership Obligations 1 and is assessed as adopted.

The Auditing and Assurance Standards Board has adopted International Standard on Quality Management 1 and International Standard on Quality Management 2 as Canadian Standard on Quality Management 1 and Canadian Standard on Quality Management 2. CSQM 1 and CSQM 2 are effective for audits and reviews of financial statements and other assurance engagements beginning on or after December 15, 2022, and CSQM 1 is effective for related services engagements beginning on or after December 15, 2023.

Current Status: Adopted

The provincial and territorial Chartered Professional Accountant (CPA) bodies establish initial and continuing professional development requirements for CPAs. CPA Canada supports the national certification framework, including the CPA Professional Education Program, the CPA Competency Map, practical experience requirements, and the Common Final Examination, which are delivered through the provincial and territorial CPA bodies.

Entry into the CPA Professional Education Program requires an undergraduate degree and prescribed prerequisite subject-area coverage. Candidates must complete the CPA Professional Education Program, relevant practical experience, and the Common Final Examination. Practical experience is a required component of certification and complements the competencies developed through professional education.

Continuing professional development requirements are established and monitored by the provincial and territorial CPA bodies. CPAs must comply with the continuing professional development requirements of the jurisdiction in which they hold the CPA designation.

The Canadian framework incorporates entry, professional education, practical experience, assessment, and continuing professional development requirements for aspiring and professional accountants and is assessed as aligned with the International Education Standards in effect as of the time of the assessment.

Current Status: Adopted

Incorporating or other governing legislation generally establishes mandatory audit requirements and requires that audits be performed in accordance with generally accepted auditing standards (GAAS). The CPA Canada Handbook – Assurance (Handbook) is considered the source of Canadian GAAS.

The Auditing and Assurance Standards Board (AASB), an independent body, sets GAAS. The AASB adopts ISA as issued by the IAASB as Canadian Auditing Standards (CAS) and quality management standards as Canadian Standards on Quality Management (CSQM), in accordance with its due process. However, there may be circumstances where amendments are required, and such amendments are made in accordance with strict amendment criteria. The CASs constitute GAAS for an audit of financial statements.

The AASB decided not to adopt the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) in Canada and continues to consider alternative approaches for smaller entity audits.

Current Status: Adopted

The provincial and territorial Chartered Professional Accountant (CPA) bodies have legislative authority to establish ethical requirements for their members, students, and firms. The harmonized Canadian CPA Code of Professional Conduct is applied through the provincial and territorial bodies and sets out general and specific duties owed to clients, employers, the public, and the profession.

Canada applies a harmonized national CPA Code of Professional Conduct rather than direct adoption of the IESBA Code as issued. While the Code is substantially aligned with the IESBA Code and continues to incorporate recent revisions, the full 2025 IESBA Code in effect as of the time of the assessment has not been adopted in its entirety for all professional accountants. Accordingly, the IESBA Code is assessed as partially adopted.

Current Status: Partially Adopted

The Public Sector Accounting Board (PSAB), an independent standard-setting body, establishes public sector accounting standards in Canada. The CPA Canada Public Sector Accounting Handbook contains Public Sector Accounting Standards (PSAS), which are accrual-basis national standards applicable to public sector entities that issue general-purpose financial statements unless otherwise directed or permitted by PSAB.

PSAB has not adopted International Public Sector Accounting Standards (IPSAS) directly. In 2020, PSAB decided to continue developing Canadian PSAS while using IPSAS principles as the basis for future standards where an IPSAS exists and is relevant. PSAB also updated the GAAP hierarchy to position IPSAS as the first accounting framework to consult among pronouncements issued by other authorized standard setters.

As Canada applies accrual-basis national standards with reference to IPSAS principles rather than IPSAS as issued, the jurisdiction-level framework is assessed as partially adopted.

Current Status: Partially Adopted

The investigative and disciplinary (I&D) system in Canada is established at the provincial and territorial level. Provincial and territorial Chartered Professional Accountant (CPA) bodies have legislative authority to investigate and discipline members, students, and firms for breaches of professional standards, ethical requirements, and regulatory obligations. Their systems include complaints intake, investigation, disciplinary hearings, sanctions, and appeals. For example, CPA Ontario’s Discipline Committee hears and decides allegations of professional misconduct against members, students, and firms.

Auditors of reporting issuers are also subject to enforcement by the Canadian Public Accountability Board (CPAB). Under National Instrument 52-108 Auditor Oversight and the CPAB Rules, participating audit firms are subject to inspection, investigation, enforcement actions, and sanctions where audit quality deficiencies or other breaches are identified.

The I&D framework is operational and applies to regulated professional accountants and firms through the provincial and territorial CPA bodies, with additional oversight for audit firms that audit reporting issuers through CPAB. Accordingly, the jurisdiction-level I&D system is aligned with the requirements of SMO 6 and is assessed as adopted.

Current Status: Adopted

International Financial Reporting Standards (IFRS) Accounting Standards are adopted at the jurisdiction level in Canada for publicly accountable enterprises. The Accounting Standards Board (AcSB) incorporates IFRS Accounting Standards as issued by the International Accounting Standards Board into Part I of the CPA Canada Handbook – Accounting. Publicly accountable enterprises are required to apply IFRS Accounting Standards in preparing general-purpose financial statements.

Private enterprises apply Accounting Standards for Private Enterprises in Part II of the Handbook, while not-for-profit organizations and pension plans apply separate Canadian standards in Parts III and IV, respectively. These entities may elect to apply IFRS Accounting Standards.

Canada has not adopted the IFRS for Small and Medium-sized Entities Accounting Standard. Private enterprises instead apply Accounting Standards for Private Enterprises or may elect to apply IFRS Accounting Standards.

Current Status: Adopted

Relevant Organizations

Accounting Standards Board (AcSB)

Auditing and Assurance Standards Board (AASB)

Canadian Public Accountability Board (CPAB)

Chartered Professional Accountants of Canada (CPA Canada)

CPA Manitoba

CPA Ontario

Financial Reporting & Assurance Standards Canada

Public Sector Accounting Board (PSAB)

Public Trust Committee (CPA Profession)

Relevant Legislation

Canada Not-for-profit Corporations Act

Chartered Professional Accountants Act (Ontario)

Public Accounting Act (Ontario)

Relevant Publications

CPA Canada Handbook – Accounting

CPA Canada Handbook – Assurance

CPA Canada Handbook – Public Sector Accounting

CPA Ontario – Discipline Decisions

CPA Ontario – Public Sector Accounting Standards Resources

CPA Ontario – Regulatory Reports

CPA Manitoba – 2025 Regulatory Report to the Public

PSAB 2022–2027 Strategic Plan

PSAB Annual Plan 2026–2027