Former KPMG auditor fined for professional misconduct in connection with Laurentian's pre-insolvency audit

The Chartered Professional Accountants of Ontario (CPA Ontario) have fined a former auditor with KPMG  for work done on the audit that preceded Laurentian University taking the shocking and unprecedented step of declaring insolvency in February, 2021.

The financial crisis led to the termination of 195 faculty and staff and led to the closure of dozens of programs.

As outlined in a settlement agreement on the agency’s website, Laurie Bissonette admitted to professional misconduct and failing to maintain professional standards as part of the KPMG audit team for 2020.

She has been fined $50,000 and ordered to pay two-thirds of the cost of the investigation, as well she has lost her status with CPA Ontario, although she has been retired since September, 2020.

The allegations stemmed from the audit of Laurentian University of the year ending April 30, 2020.

During the preceding months, Bissonette's role was to oversee the audit planning, implement it, manage the team and review the riskier parts of the file.

The professional conduct committee (PCC) of CPA Ontario alleged that from March 1, 2020 through September 30, 2020 she “failed to appropriately evaluate and document management's assessment of the entity’s ability to continue as a going concern,” and to “exercise professional skepticism.”

The term “going concern” means whether Laurentian was financially viable.

Although the issue of viability was raised at times throughout the process, especially because of COVID, the statement indicates Bissonette did not follow up certain points, and didn’t document discussions.

At one point, the statement said that Bissonette believed, “notwithstanding the $12 million deficit forecast for 2019, that sustainability measures were in place and LU would be at a break even for 2021.”

Although the statement said that Bissonette had numerous discussions with key members of Laurentian’s management about its viability, it found no documentation of them.

The committee said that Bissonette requested managers at Laurentian conduct an assessment of the assumption that the university was a “going concern” but none was ever prepared.

It found that she relied too much on management’s cash flow forecasts.

It found that in June of 2020, a manager at Laurentian advised Bissonette by text that the university was engaging TGF, but that she didn’t bother to ask what TGF stood for.