The former KPMG auditor involved in the audit preceding Laurentian University’s insolvency declaration in February 2021 has been fined by the Chartered Professional Accountants of Ontario (CPA Ontario). The financial crisis resulted in the termination of 195 faculty and staff members and the closure of numerous programs.
According to a settlement agreement on CPA Ontario’s website, Laurie Bissonette, a member of the KPMG audit team for 2020, admitted to professional misconduct and failing to uphold professional standards. She has been fined $50,000 and ordered to cover two-thirds of the investigation costs. Additionally, she has lost her CPA Ontario status, although she retired in September 2020. The misconduct allegations were related to the audit of Laurentian University for the year ending April 30, 2020.
During the audit planning phase from March 1, 2020, to September 30, 2020, Bissonette’s role included overseeing the audit process, managing the team, and reviewing critical sections of the audit file. The CPA Ontario’s Professional Conduct Committee (PCC) accused her of failing to properly evaluate and document the university’s financial viability assessment and lacking professional skepticism.
The committee highlighted instances where Bissonette did not adequately follow up on critical points or document discussions related to Laurentian University’s financial sustainability. Despite discussions with university management about viability, no documentation was found. The committee noted Bissonette’s heavy reliance on management’s cash flow forecasts and pointed out instances where she failed to inquire further into important matters, such as the engagement of a law firm specializing in insolvency.
Bissonette’s lack of professional skepticism was further highlighted when she was unaware of key developments, such as the hiring of Ernst & Young for potential restructuring initiatives. Ultimately, Bissonette retired on September 30, 2020, and was only made aware of Laurentian University’s insolvency filing on February 1, 2021, along with the general public.
Laurentian University emerged from creditor protection in November 2022 but continues to address the repercussions, including selling campus buildings to the province and leasing them back. Legislation changes in June 2024 now exclude public post-secondary institutions from using the Companies’ Creditors Arrangement Act (CCAA) for financial crises.