Securities regulators are urging reporting issuers and their auditors to ensure they are able to comply with the requirements of corporate governance rules that are expected to affect auditors’ reports dated after March 30, 2004.

The proposed Multilateral Instrument 52-108 Auditor Oversight will require that audit reports that are filed with a securities commission be signed by an auditor that is registered with the Canadian Public Accountability Board, and is in compliance with any restriction or sanction that may have been imposed by the CPAB.

In June, the CSA, other than B.C., published a proposed rule regarding auditor oversight for a 90-day comment period. B.C. published it on September 3, for a 60-day comment period. The CSA says that its staff are in the process of finalizing the proposed rule and do not expect to make material changes from the version published for comment.

Subject to receiving all necessary commission and ministerial approvals, CSA staff expect that the final rule will be adopted by all jurisdictions in January 2004 and will take effect on March 30, 2004.

For Canadian auditors, the CPAB registration system involves two phases. Under the first phase, audit firms must file with the CPAB by December 31, a notice of their intention to participate, together with a quality control report and the required fees. Under the second phase, audit firms will be invited to file with the CPAB by February 29, 2004 an initial registration form and a signed participation agreement. If a reporting issuer’s auditor files the materials required by the CPAB within these time frames, it will be considered to be registered with the CPAB.

Foreign audit firms will have until July 19, 2004 to complete the registration process.