Audit quality indicators (AQIs) have been gaining traction among audit committees and management as a way to measure various aspects of the external audit quantitatively. However, there has been limited information available to help these groups identify and evaluate appropriate AQIs.

Chartered Professional Accountants of Canada (CPA Canada), the Canadian Public Accountability Board (CPAB), the Institute of Corporate Directors (ICD) and a specially formed advisory committee jointly developed the non-authoritative guidance presented in this document to provide much-needed direction in this matter.

Take advantage of this useful step-by-step guide that will help audit committees and management identify relevant AQIs, and understand how they can be used to spark discussions about improving audit quality.

CPA Canada, Canadian Public Accountability Board (CPAB), and the Institute of Corporate Directors (ICD) also produced publications in 2014 to help audit committees enhance their oversight of the external auditor.

Developed with input from a group of senior audit committee members in collaboration with the ICD, the joint publications are a result of the recommendations and conclusions of the Enhancing Audit Quality (EAQ) initiative completed by CPAB and CPA Canada in 2013.

The EAQ report outlined several recommendations aimed at improving audit quality including a comprehensive review of the external audit firm at least once every five years, conducting annual assessments of the external audit firm, and providing increased transparency to audit committees on CPAB’s annual inspections.

This guidance document includes an overview of recommended practices for activities that audit committees perform in overseeing the work of the external auditor. Two companion publications offer practical tools to assist audit committees with implementing EAQ recommendations that audit committees conduct an annual assessment of the external auditor and a periodic comprehensive review of an audit firm.


Each year, CPAB assesses the quality of audits by Canadian public accounting firms. The Protocol for Audit Firm Communication of CPAB Inspection Findings with Audit Committees (Protocol) sets out how audit firms will communicate CPAB’s inspection findings to audit committees.