Changes To The Joint Policy Statement Governing Communications Between Lawyers, Entities And Auditors During Audit Inquiries

The Canadian Bar Association and the Auditing and Assurance Standards Board have issued a new Joint Policy Statement (the "JPS 2016"), which will come into effect on December 1, 2016.  A copy of the JPS 2016 can be accessed here.

The basic purpose of the JPS 2016 remains the same as the previous versions it replaces (the 1978 JPS and the 2010 "Interim Guidance"): to assist Law Firms, Auditors, and Entities to communicate effectively with respect to claims and possible claims against or by the Entity, while (i) protecting privilege; and (ii) keeping Law Firms from becoming involved in a joint undertaking with the Auditor.

The JPS 2016 attempts to provide clarity in regard to the respective responsibilities of the parties involved in the audit inquiry/response process, namely, the "Entity"[1], "Law Firm"[2], and "Auditor"[3], and clearer rules regarding timing.