Accounting firm RSM Canada LLP censured by Canadian audit watchdog for backdating signoffs

TORONTO, October 12, 2026 – The Canadian Public Accountability Board has publicly censured accounting firm RSM Canada LLP for the practice of backdating signoffs for more than five years. A settlement agreement between CPAB and RSM describes how the practice was conducted through a cloud-based service that allowed accountants to manually select preparer and reviewer signoff dates for workpapers. 

According to the Canadian audit watchdog, “this meant that Signoff Backdating was possible and took only a matter of seconds.” 

The practice of backdating appears to have been uncovered by another, unnamed regulator, as a ”special monitoring project” was undertaken “in response to an inquiry from another regulator in October 2022.” The backdating of audit projects was of specific concern to the CPAB’s counterpart in the United States, the Public Company Accounting Oversight Board, prior to the election of the Trump administration. 

On October 18, 2022, the PCAOB announced its largest-ever civil money penalty against an American individual in a settled disciplinary order over documentation and backdating. As reported by Canadian Accountant, the PCAOB has sanctioned a Canadian firm for the same practice one month earlier, and there followed a number of sanctions from regulators on both sides of the border over the practice. 

CPA Ontario, for example, fined Deloitte Canada for the practice in 2023, and fined five Deloitte partners in 2024 for manually overriding computer clocks to backdate audit working papers in multiple engagements. 

CPAB settlement describes practice in detail

The accounting firm known as RSM was founded in the United Kingdom in the 1960s and has since grown to become the sixth-largest accountancy professional services network in the world by revenue. RSM International launched RSM Canada in 2017 while acquiring Collins Barrow Toronto from its national network (which rebranded as Baker Tilly Canada in January 2019). Last month, RSM Canada announced the opening of its new Toronto office in the TD Bank Tower, a flagship location. Recently, the Financial Times reported that RSM is considering an initial public offering as it holds out selling to private equity firms in the United States.

According to the settlement agreement, RSM Canada continued to use the electronic workpaper system that the acquired firm had used (“Workpaper System”). Up until September 2023, RSM Canada used a cloud-based service to host the Workpaper System. Its official policy trusted auditors to correctly date its work, as RSM Canada had a: 

longstanding policy dating back to at least 2021, which provides that the auditor should sign off on workpapers electronically in the electronic audit file on the date on which the work was performed. If circumstances prevent the auditor from doing so, the policy requires the auditor to document on the workpaper the date on which the work was actually carried out (a “Workpaper Sign Off Note”) and then to sign off using the current date

However, it was “widely known” at RSM Canada that auditors could manually change the automatically generated current date for a sign-off to an earlier date within seconds, through a “properties” view that was readily accessible to all audit personnel. 

While RSM Canada commenced what it called the Special Monitoring Project to investigate backdating, the settlement agreement describes in detail that, in the opinion of CPAB, the project scope was “unduly limited,” the investigation and its documentation was incomplete, and there was no assessment of the investigation by leadership at RSM Canada. Further, the firm “did not provide CPAB with the results of the Special Monitoring Project or disclose that it had been conducted.” 

The firm did, however, replace its Workpaper Cloud Service with a different hosting service, which removed the ability to manually enter sign-off dates, so that Signoff Backdating could no longer occur using that functionality. 

CPAB identifies additional instances of signoff backdating

During its 2023 inspection of RSM Canada, CPAB would eventually catalogue 54 instances of signoff backdating, 21 of which occurred after the audit report date. The audit watchdog reviewed the workpapers investigated by the special project and expanded its scope but, “due to RSM Canada’s inconsistent lock down procedures and signoff history retention, only 14 of them had the metadata required to review for Signoff Backdating.” 

The settlement agreement includes a lengthy section on the firm’s violations of Canadian auditing systems. In addition to the undisclosed “monetary assessment” related to ongoing compliance, RSM must undertake remedial actions, and has already paid the costs of the watchdog’s investigation. 

Although there are exceptions, the practice of backdating is considered improper when it re-characterizes a transaction or “rewrites history.” According to CPA Ontario, “Backdating creates questions about the accuracy or timeliness of audit documentation.” 

As Geoff Dingle of Johnson Global Advisory has written, “Engagement teams should not be performing any audit procedures after the opinion has already been issued, as this would imply that the engagement team had no basis to assert it had done sufficient audit work as of the date of the opinion.” If reviews are happening in real time, states Dingle, “there should be limited need to document any procedures after the opinion date and perform clean-up.” 

RSM Canada does not admit or deny, on behalf of itself or any of its professionals, the allegations contained in the enforcement action. 

Colin Ellis is a contributing editor to Canadian Accountant. Title image: iStock ID 954621818 (modified).