Canadian Accounting Group Takes Oversight Fight to U.S.
A disagreement over the creation of Canada's audit oversight board has reached the United States, as a Canadian accounting organization has hired a Washington lobbyist to battle the two-year-old board.
The Canadian Public Accountability Board (CPAB) is the counterpart to the U.S. Public Company Accounting Oversight Board (PCAOB). Both were set up in 2002 after a number of accounting scandals to independently oversee auditing firms.
In Canada, the Certified General Accountants of Ontario (CGAO) has opposed the governance structure of the CPAB, saying it is not independent and is dominated by the Canadian Institute of Chartered Accountants, according to the Globe and Mail of Toronto. CGAO has hired P.D. Frazer Consulting Inc. to lobby against the PCAOB giving reciprocal recognition to the CPAB.
CPAB chief executive officer David Scott told the newspaper that he believes the dispute stems from the CPAB's refusal to give the CGAO a seat on its board of directors because Certified General Accountants represent less than 1 per cent of auditors of Canadian public companies. He added, "We think it was completely inappropriate for the CGAs of Ontario to be lobbying a foreign government.”
CPAB has 11 seats, with four held by accountants and the remainder by public representatives. The chair is former Bank of Canada governor Gordon Thiessen, who is not an accountant. Scott said the Canadian Institute of Chartered Accountants do not control his organization, the newspaper reported.
Scott said that even though a Republican Congressman, John Sweeney of New York, made a speech opposing PCAOB recognition of the Canadian audit regulator, the recognition effort has not been hampered. Canadian embassy officials met with Sweeney afterward and are talking with the CGAO lobbyist.
"They really do believe that what we're doing is an important part of the Canadian capital markets," Scott said.