Innovations such as blockchain and artificial intelligence (AI) and the emergence of new industries, including cannabis and cryptocurrency, are posing new challenges to auditors, says the Canadian Public Accountability Board (CPAB) in its new strategic plan, unveiled on Wednesday.
The CPAB’s strategic plan for the next three years says that the organization expects the audit environment in 2021 “will require an agile and progressive regulator keenly focused on improving audit quality and heightening investor protection.”
To get there, the audit regulator says it intends to “pursue innovation, continuous improvement and next generation audit quality while engaging with the stakeholders that impact and depend on audit quality.”
Among the forces that are expected to transform auditing and audit regulation in the years ahead, the CPAB points to technology-driven innovation.
“Enabling disruptors such as new technologies and new businesses will reshape the audit as we know it,” the strategic plan says, noting that blockchain technology and AI “create opportunities to improve financial reporting and audit quality, but pose risks as well.”
In addition, the development of new industries, such as the fast-growing cannabis industry and phenomena such as cryptocurrency, pose “new audit and financial reporting challenges,” the strategic plan says.
To deal with these issues, the CPAB says it will proactively assess the use of AI, analytics and other new tools in the audit process; examine the risks posed by new industries; and help set standards for dealing with these technologies and novel audit challenges.
The CPAB also aims to enhance its regulatory model through public communication of audit oversight findings and reviewing its toolkit, including assessing its disciplinary and communication mechanisms.