This paper examines the “three-legged stool” governance model that underpins high-quality audit outcomes in Canada, built on the interdependent roles of management, the audit committee, and the independent auditor. It outlines management’s responsibility for accurate financial reporting and strong internal controls, the audit committee’s oversight and fiduciary duties in fostering transparency between management and auditors, and the independent auditor’s role in providing objective assurance on financial information. The paper emphasizes that no single party should be over-relied upon, and that open communication, clearly defined responsibilities, and staying current with evolving accounting and auditing standards, including emerging areas like AI, are essential to closing expectation gaps. Ultimately, it argues that sustained collaboration across all three “legs” is critical to preserving investor confidence and the integrity of Canada’s capital markets.
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