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The Importance of Continuous Quality Improvement: CPA Ontario Quality Management Report 2025

July 04, 2025

CPAs play a critical role in capital markets and the economy, which is why holding members, students and firms to the highest standards of technical expertise and ethical practice is a core part of CPA Ontario’s mandate.

Those standards are not static. They change to adapt to the times. When the Canadian Standards on Quality Management (CSQMs) were introduced, they marked a significant change for firms. Rather than a quality control model under the old standard, the new standard required firms to design policies and procedures for managing quality that were unique to their own firm, and unique to the risk profile of the work that they perform.

As the regulator of the profession with the mandate to protect the public, CPA Ontario monitors the implementation of those standards among CPAs and CPA firms. That’s why we embarked on an initiative to proactively review how firms manage quality and meet the CSQMs.

Our Enhanced Quality Management Review (EQMR) program focuses on audit, review and compilation engagements, as well as other related services and assesses firm’s Systems of Quality Management (SoQM), including how policies, procedures, and controls are designed, implemented, and operated.

Results of the EQMR have been published in Upholding High Standards to Protect the Public: Quality Management Report 2025.

Findings include:

Of the twelve firms subject to the EQMR two firms had deficiencies that warranted further action from CPA Ontario:

  • One firm was given the opportunity to address its deficiencies, and a subsequent reinspection demonstrated that the firm had taken the appropriate remedial actions. 
  • One has been referred to the CPA Ontario Professional Conduct Committee for further investigation due to the severity and the nature of the deficiencies found during the review. 
  • 10 firms did not have findings that pose a material risk to the public but were still issued a report with recommendations for strengthening their systems of quality management and building a culture of continuous improvement. 

“The responsibility of maintaining quality rests with every firm, and with every CPA,” said Janet Gillies CPA, CA Executive Vice-President, Regulatory and Standards. “The recommendations in this report are not just applicable to firms that have been subject to our quality management review. The insights from this review can be applied broadly across the profession to every engagement where the Canadian Standards on Quality Management apply.”

Upholding High Standards to Protect the Public: Quality Management Report 2025 includes actions all CPAs can apply to their work to strengthen these quality elements and align with the CSQMs.

Some of the recommended actions include:

  • Governance and Leadership: Document the determination of Partner compensation to demonstrate a clear link to quality indicators such as monitoring results, inspection results and instances of restatements.
  • Relevant Ethical Requirements: Carefully document whistleblower policies to detail the adequate protections provided to whistleblowers, with specific messaging and training for staff to reinforce reporting obligations.
  • Engagement Performance: Enhance guidance materials and training for engagement teams and reassess engagement budgets to ensure there is sufficient time to prepare required documentation.
  • Resources: Implement a policy requiring all Partners and staff to attend CPD in relevant accounting and assurance frameworks as a prerequisite to being assigned to engagements reporting under those frameworks.
  • Monitoring and Remediation: Perform a thorough assessment of the experience and technical skills of the individuals performing the monitoring activities, such as mapping to the nature of the firm’s practice.

Firms were selected for an EQMR based on their risk profile, including size, types of engagements and the nature of their client industries. For the first two years of the EQMR program, all firms included in the EQMR performed audits of reporting issuers.

In 2025, 13 additional firms will be subject to an EQMR, including firms that perform higher risk engagements other than audits of reporting issuers. It is the expectation of CPA Ontario that every firm and every CPA will review the results in our Quality Management Report 2025 and look for opportunities to proactively strengthen their own quality management policies and procedures.

Through the EQMR and all our proactive regulatory activities, CPA Ontario will continue to hold the profession to the highest standards and fully investigate any alleged misconduct.