Bridging Finance allegations just the latest in KPMG Canada audit quality criticism

TORONTO, April 26, 2026 – KPMG Canada faces a penalty of up to $40 million from the Ontario Securities Commission at a time when Canada’s audit watchdog revealed the accounting firm’s significant audit deficiencies. The securities regulator has alleged that KPMG “failed to perform fundamental audit procedures” in its engagements with Bridging Finance Inc., a private debt manager that went bankrupt in 2021, one of the largest and most significant failures of an investment manager in Canadian history. 

The allegations coincide with the recent release of 2025 audit inspection reports by the Canadian Public Accountability Board. Under new transparency rules, which allow for the publication of firm-specific inspection reports, the audit watchdog revealed that KPMG had the highest deficiency rate of the Big Four accounting firms in Canada. With five significant findings out of 24 files inspected, one of which began in 2024 and carried over into 2025, KPMG had a deficiency rate of almost 21 per cent. 

Following a period of regulatory change under the leadership of Carol Paradine, the audit regulator is now led by Sonny Randhawa, CPA, CA. Randhawa served as the executive vice president, regulatory operations at the Ontario Securities Commission, where he lead four divisions collectively responsible for regulating and developing policy. He was appointed to CPAB effective March 2, 2026. 

KPMG has a enviable record of success in Canada. As reported by Canadian Accountant, KPMG is the smallest of the Big Four accounting firms globally, yet KPMG Canada was second in revenue to Deloitte Canada as recently as 2023. As of December 31, 2024, according to CPAB, KPMG Canada audited 284 reporting issuers and 1,154 funds. 

KPMG Canada denies OSC allegations of audit failure

The accounting firm has issued a statement to media outlets in which it “firmly disagrees” with the allegations. “These are allegations, not findings, and KPMG will vigorously defend our work throughout this process. KPMG takes its role and responsibilities as auditor seriously and remains committed to the highest standards of audit quality and professionalism. We stand behind our work as auditor of the Bridging funds.” 

According to the OSC allegations, which span 27 pages, KPMG LLP was engaged to be the independent auditor for the financial statements of four funds managed by Bridging Finance. As auditor, KPMG conducted eight fund audits over two fiscal years, failing in its representation of the valuation of loans held within each of the funds. “KPMG’s actions,” say the OSC, “had consequences for investors, who bought units of the funds at inflated prices and made investment decisions regarding their positions that they may not otherwise have made.” 

In December 2025, a former auditor with KPMG Canada reached a settlement agreement with Chartered Professional Accountants of Ontario, over her role in the financial collapse of Laurentian University. Laurie Bissonette agreed to pay a fine of $50k, two-thirds of the costs of the investigation, and could no longer use her fellowship designation (FCPA, FCA). The allegations were based largely on a special report by the Auditor General of Ontario. 

In the same year, CPAB’s counterpart in the United States, the Public Company Accounting Oversight Board, reported finding deficiencies in half of the 10 KPMG Canada audit inspections it conducted. Later that year, the US audit watchdog fined KPMG Canada — along with eight other member firms of the KPMG global network — for repeated failures in accurately disclosing the participation of other accounting firms in KPMG audits. 

Colin Ellis is a contributing editor to Canadian Accountant.