BC accounting firm Davidson & Company LLP gets clean sheet from US audit watchdog

Click image to download the Davidson & Company LLP inspection report from the Public Company Accounting Oversight Board.

TORONTO, Jan. 11, 2026 – One year after being censured in Canada for violation of independence rules, Vancouver-based accounting firm Davidson & Company LLP has received a clean audit inspection report from the Public Company Accounting Oversight Board in the United States. The US audit watchdog found no deficiencies in three Davidson & Company audits and no concerns regarding independence. 

One year ago, the Canadian Public Accountability Board found numerous violations by the firm of independence rules, related to the length of time an engagement partner and quality control reviewer continued to act on engagements. 

According to its inspection report, the PCAOB inspected three audits conducted by Davidson & Company in 2024. In all three Davidson & Company acted as the principal auditor. The PCAOB focused largely on revenue and related accounts, as well as long-lived assets, in its inspections. 

While the US audit watchdog found no issues regarding unsupported opinions, multiple deficiencies, nor independence, it noted that, in one of three audits reviewed, the firm’s audit report was not addressed to the board of directors. In this instance, the firm was non-compliant with AS 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion. 

Davidson & Company LLP has never been the subject of censure by the US audit watchdog. In its previous inspection report, published in 2022, the firm had a 33% deficiency rate out of three audits inspected, which is standard for accounting firms. The inspection report did not flag any violations of independence rules. 

2024 CPAB Censure

As reported by Canadian Accountant, the Canadian Public Accountability Board censured Davidson & Company LLP in 2024, following the disclosure of information in an inspection by its counterpart in the United States. According to its enforcement action, CPAB found numerous violations by the firm of independence rules, related to the length of time an engagement partner and quality control reviewer continued to act on engagements. 

At the time, Davidson & Company was the auditor of approximately 400 reporting issuers. The PCAOB’s most recent inspection report reveals the firm acted as the principal auditor for 30 issuer audit clients in listed in the United States. In May of 2023, the firm notified CPAB that, during an investigation “by a foreign regulator,” the firm had identified multiple violations of partner and engagement quality control reviewer rotation requirements related to two Canadian reporting issuers between the years of 2020 and 2022. 

In July 2023, CPAB commenced an investigation to determine if similar conduct had impacted additional Canadian reporting issuer audits. The Canadian regulator’s investigation identified an additional 29 violations of Independence Rules, all of which occurred between 2013 and 2023 in relation to 14 Canadian reporting issuers. 

In addition to its public censure, Davidson & Company LLP was ordered to pay $100,000 to CPAB for the regulator to recoup its investigation costs, and the firm had to take remedial actions to ensure independence, including the appointment of personnel, reporting obligations, and the training of staff on independence standards. Unlike in recent enforcement actions, CPAB did not prohibit the firm from accepting new audit engagement clients. 

Colin Ellis is a contributing editor to Canadian Accountant.