A review of issuers’ compliance with their financial statement certification obligations conducted by staff of the Canadian Securities Administrators found widespread deficiencies.

According to a staff notice issued by the CSA, a survey of issuers’ compliance with the requirements that management of public companies attest to the accuracy of their financial statements found that only 38% “appeared to substantively comply with the requirements”.

Of the remaining 62% of issuers reviewed, which had some level of non-compliance, almost half (30% of reporting issuers reviewed) had filings that were so deficient that the issuers were required to refile their annual MD&A and/or certificates. The rest will be required to make changes in future filings.

The CSA said that the regulation, which was adopted in 2008, is intended to improve the quality and reliability of issuers’ disclosure, and to bolster investor confidence. It expects that issuers’ compliance will improve as issuers become more familiar with the requirements.

“Meanwhile, we will continue to monitor compliance with these requirements closely,” the CSA said.

For 30% of reporting issuers that were required to refile their annual MD&A and/or certificates, most were senior issuers. The CSA reports that only 13% of venture issuers reviewed had to refile, while 36% of non-venture issuers did.

The majority of the refilings related to: conclusions about the effectiveness of disclosure controls and procedures and internal control over financial reporting in the annual MD&A, and, significant amendments to the wording prescribed by the certificates, the CSA said.

Of those requiring future changes, the CSA reports that the biggest issues were the need for amendments to the wording prescribed by the certificate, and the use of incorrect dates.