Bank Act (S.C. 1991, c. 46)

Marginal note:Right to attend meetings

• 852 (1) The auditor of a bank holding company is entitled to receive notice of every meeting of shareholders and, at the expense of the bank holding company, to attend and be heard thereat on matters relating to the duties of the auditor.

• Marginal note:Duty to attend meeting

  (2) If a director or shareholder of a bank holding company, whether or not the shareholder is entitled to vote at the meeting, gives written notice, not less than ten days before a meeting of shareholders, to an auditor or former auditor of the bank holding company that the director or shareholder wishes the auditor’s attendance at the meeting, the auditor or former auditor shall attend the meeting at the expense of the bank holding company and answer questions relating to the auditor’s or former auditor’s duties as auditor.

• Marginal note:Notice to bank holding company

  (3) A director or shareholder who gives notice under subsection (2) shall send concurrently a copy of the notice to the bank holding company and the bank holding company shall forthwith send a copy thereof to the Superintendent.

• Marginal note:Superintendent may attend

  (4) The Superintendent may attend and be heard at any meeting referred to in subsection (2).

Marginal note:Statement of auditor

• 853 (1) An auditor of a bank holding company that

  • (a) resigns,

  • (b) receives a notice or otherwise learns of a meeting of shareholders called for the purpose of revoking the appointment of the auditor, or

  • (c) receives a notice or otherwise learns of a meeting of directors or shareholders at which another firm of accountants is to be appointed in its stead, whether because of the auditor’s resignation or revocation of appointment or because the auditor’s term of office has expired or is about to expire,

  shall submit to the bank holding company and the Superintendent a written statement giving the reasons for the resignation or the reasons why the auditor opposes any proposed action.

• Marginal note:Other statements

  (1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the bank holding company shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons.

• Marginal note:Statements to be sent

  (2) The bank holding company shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every shareholder entitled to vote at the annual meeting of shareholders and to the Superintendent.

Marginal note:Duty of replacement auditor

• 854 (1) Where an auditor of a bank holding company has resigned or the appointment of an auditor has been revoked, no firm of accountants shall accept an appointment as auditor of the bank holding company or consent to be an auditor of the bank holding company until the firm of accountants has requested and received from the other auditor a written statement of the circumstances and reasons why the other auditor resigned or why, in the other auditor’s opinion, the other auditor’s appointment was revoked.

• Marginal note:Exception

  (2) Notwithstanding subsection (1), a firm of accountants may accept an appointment or consent to be appointed as auditor of a bank holding company if, within fifteen days after a request under that subsection is made, no reply from the other auditor is received.

• Marginal note:Effect of non-compliance

  (3) Unless subsection (2) applies, an appointment as auditor of a bank holding company is void if subsection (1) has not been complied with.

Marginal note:Auditors’ examination

• 855 (1) The auditor of a bank holding company shall make such examination as the auditor considers necessary to enable the auditor to report on the annual statement and on other financial statements required by this Part to be placed before the shareholders, except such annual statements or parts thereof as relate to the period referred to in subparagraph 840(1)(a)(ii).

• Marginal note:Auditing standards

  (2) The examination of the auditor referred to in subsection (1) shall, except as otherwise specified by the Superintendent, be conducted in accordance with generally accepted auditing standards, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada.

Marginal note:Right to information

• 856 (1) On the request of the auditor of a bank holding company, the present or former directors, officers, employees or agents of the bank holding company shall, to the extent that such persons are reasonably able to do so,

  • (a) permit access to such records, assets and security held by the bank holding company or any entity in which the bank holding company has a substantial investment, and

  • (b) provide such information and explanations

  as are, in the opinion of the auditor, necessary to enable the auditor to perform the duties of the auditor of the bank holding company.

• Marginal note:Directors to provide information

  (2) On the request of the auditor of a bank holding company, the directors of the bank holding company shall, to the extent that they are reasonably able to do so,

  • (a) obtain from the present or former directors, officers, employees and agents of any entity in which the bank holding company has a substantial investment the information and explanations that such persons are reasonably able to provide and that are, in the opinion of the auditor, necessary to enable them to perform the duties of the auditor of the bank holding company; and

  • (b) provide the auditor with the information and explanations so obtained.

• Marginal note:No civil liability

  (3) A person who in good faith makes an oral or written communication under subsection (1) or (2) shall not be liable in any civil action arising from having made the communication.

Marginal note:Auditor’s report and extended examination

• 857 (1) The Superintendent may, in writing, require that the auditor of a bank holding company report to the Superintendent on the extent of the procedures of the auditor in the examination of the annual statement and may, in writing, require that the auditor enlarge or extend the scope of that examination or direct that any other particular procedure be performed in any particular case, and the auditor shall comply with any such requirement of the Superintendent and report to the Superintendent thereon.

• Marginal note:Special examination

  (2) The Superintendent may, in writing, require that the auditor of a bank holding company make a particular examination to determine whether any procedures adopted by the bank holding company may be prejudicial to the interests of depositors, policyholders or creditors of any federal financial institution that is affiliated with the bank holding company, or any other examination as, in the Superintendent’s opinion, the public interest may require, and report to the Superintendent thereon.

• Marginal note:Special examination

  (3) The Superintendent may direct that a special audit of a bank holding company be made if, in the opinion of the Superintendent, it is so required and may appoint for that purpose a firm of accountants qualified pursuant to subsection 847(1) to be an auditor of the bank holding company.

• Marginal note:Expenses payable by bank holding company

  (4) The expenses entailed by any examination or audit referred to in any of subsections (1) to (3) are payable by the bank holding company on being approved in writing by the Superintendent.

Marginal note:Auditor’s report

• 858 (1) The auditor shall, not less than twenty-one days before the date of the annual meeting of the shareholders of the bank holding company, make a report in writing to the shareholders on the annual statement referred to in subsection 840(1).

• Marginal note:Audit for shareholders

  (2) In each report required under subsection (1), the auditor shall state whether, in the opinion of the auditor, the annual statement presents fairly, in accordance with the accounting principles referred to in subsection 840(4), the financial position of the bank holding company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the bank holding company for that financial year.

• Marginal note:Auditor’s remarks

  (3) In each report referred to in subsection (2), the auditor shall include such remarks as the auditor considers necessary when

  • (a) the examination has not been made in accordance with the auditing standards referred to in subsection 855(2);

  • (b) the annual statement has not been prepared on a basis consistent with that of the preceding financial year; or

  • (c) the annual statement does not present fairly, in accordance with the accounting principles referred to in subsection 840(4), the financial position of the bank holding company as at the end of the financial year to which it relates or the results of the operations or changes in the financial position of the bank holding company for that financial year.

Marginal note:Report on directors’ statement

• 859 (1) The auditor of a bank holding company shall, if required by the shareholders, audit and report to the shareholders on any financial statement submitted by the directors to the shareholders, and the report shall state whether, in the opinion of the auditor, the financial statement presents fairly the information required by the shareholders.

• Marginal note:Making of report

  (2) A report of the auditor made under subsection (1) shall be attached to the financial statement to which it relates and a copy of the statement and report shall be sent by the directors to every shareholder and to the Superintendent.

Marginal note:Auditor of subsidiaries

• 860 (1) A bank holding company shall take all necessary steps to ensure that

  • (a) its auditor is the auditor of each of its subsidiaries; and

  • (b) in the case of a subsidiary with more than one auditor, the auditor of the bank holding company is one of the subsidiary’s auditors.

• Marginal note:Subsidiary outside Canada

  (2) Subsection (1) applies in the case of a subsidiary that carries on its operations in a country other than Canada unless the laws of that country do not permit the appointment of an auditor of the bank holding company as the auditor of that subsidiary.

• Marginal note:Exception

  (3) Subsection (1) does not apply in respect of any particular subsidiary where the bank holding company, after having consulted its auditor, is of the opinion that the total assets of the subsidiary are not a material part of the total assets of the bank holding company.

Marginal note:Auditor’s attendance

• 861 (1) The auditor of a bank holding company is entitled to receive notice of every meeting of the audit committee of the bank holding company and, at the expense of the bank holding company, to attend and be heard at that meeting.

• Marginal note:Attendance

  (2) If so requested by a member of the audit committee, the auditor shall attend every meeting of the audit committee held during the member’s term of office.

Marginal note:Calling meeting

• 862 (1) The auditor of a bank holding company or a member of the audit committee may call a meeting of the audit committee.

• Marginal note:Right to interview

  (2) The chief internal auditor of a bank holding company or any officer or employee of the bank holding company acting in a similar capacity shall, at the request of the auditor of the bank holding company and on receipt of reasonable notice, meet with the auditor.

Marginal note:Notice of errors

• 863 (1) A director or an officer of a bank holding company shall forthwith notify the audit committee and the auditor of the bank holding company of any error or misstatement of which the director or officer becomes aware in an annual statement or other financial statement on which the auditor or any former auditor has reported.

• Marginal note:Error noted by auditor

  (2) If the auditor or former auditor of a bank holding company is notified or becomes aware of an error or misstatement in an annual statement or other financial statement on which the auditor reported and in the opinion of the auditor the error or misstatement is material, the auditor or former auditor shall inform each director of the bank holding company accordingly.

• Marginal note:Duty of directors

  (3) When under subsection (2) the auditor or former auditor of a bank holding company informs the directors of an error or misstatement in an annual statement or other financial statement, the directors shall

  • (a) prepare and issue a revised annual statement or financial statement; or

  • (b) otherwise inform the shareholders and the Superintendent of the error or misstatement.