PART VICorporate Governance (continued)
Financial Statements and Auditors (continued)
Marginal note:Duty of replacement auditor
327 (1) Where an auditor of a company has resigned or the appointment of an auditor has been revoked, no person or firm shall accept an appointment as auditor of the company or consent to be the auditor of the company until the person or firm has requested and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and reasons why the other auditor resigned or why, in the other auditor’s opinion, the other auditor’s appointment was revoked.
(2) Notwithstanding subsection (1), a person or firm may accept an appointment or consent to be appointed as auditor of a 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 company is void if subsection (1) has not been complied with.
Marginal note:Auditor’s examination
328 (1) The auditor of a 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 Act to be placed before the shareholders, except such annual statements or parts thereof as relate to the period referred to in subparagraph 313(1)(a)(ii).
Marginal note:Auditing standards
(2) The auditor’s examination 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.
- 1991, c. 45, s. 328
- 2017, c. 26, s. 62
Marginal note:Right to information
(a) permit access to such records, assets and security held by the company or any entity in which the 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 auditor of the company.
Marginal note:Directors to provide information
(2) On the request of the auditor of a company, the directors of the 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 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 the auditor to perform the duties of auditor of the 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
330 (1) The Superintendent may, in writing, require that the auditor of a company report to the Superintendent on the extent of the auditor’s procedures 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 company make a particular examination relating to the adequacy of the procedures adopted by the company for the safety of its creditors and shareholders, or any other examination as, in the Superintendent’s opinion, the public interest may require, and report to the Superintendent thereon.
(3) The Superintendent may direct that a special audit of a company be made if, in the opinion of the Superintendent, it is so required and may appoint for that purpose an accountant or a firm of accountants qualified pursuant to subsection 320(1) to be an auditor of the company.
Marginal note:Expenses payable by company
(4) The expenses entailed by any examination or audit referred to in any of subsections (1) to (3) are payable by the company on being approved in writing by the Superintendent.
- 1991, c. 45, s. 330
- 1999, c. 31, s. 217(F)
Marginal note:Auditor’s report
331 (1) The auditor shall, not less than twenty-one days before the date of the annual meeting of the shareholders of the company, make a report in writing to the shareholders on the annual statement referred to in subsection 313(1).
Marginal note:Audit for shareholders
(2) In each report required under subsection (1), the auditor shall state whether, in the auditor’s opinion, the annual statement presents fairly, in accordance with the accounting principles referred to in subsection 313(4), the financial position of the 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 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 328(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 313(4), the financial position of the 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 company for that financial year.
Marginal note:Report on directors’ statement
332 (1) The auditor of a 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 auditor’s opinion, 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:Report to officers
333 (1) It is the duty of the auditor of a company to report in writing to the chief executive officer and chief financial officer of the company any transactions or conditions that have come to the auditor’s attention affecting the well-being of the company that in the auditor’s opinion are not satisfactory and require rectification and, without restricting the generality of the foregoing, the auditor shall, as occasion requires, make a report to those officers in respect of
(a) transactions of the company that have come to the auditor’s attention and that in the auditor’s opinion have not been within the powers of the company, and
(b) loans owing to the company by any person the aggregate amount of which exceeds one half of one per cent of the regulatory capital of the company and in respect of which, in the auditor’s opinion, loss to the company is likely to occur,
but when a report required under paragraph (b) has been made in respect of loans to any person, it is not necessary to report again in respect of loans to that person unless, in the opinion of the auditor, the amount of the loss likely to occur has increased.
Marginal note:Transmission of report
(2) Where the auditor of a company makes a report under subsection (1),
(a) the auditor shall transmit the report, in writing, to the chief executive officer and chief financial officer of the company;
(b) the report shall be presented to the first meeting of the directors following its receipt;
(c) the report shall be incorporated in the minutes of that meeting; and
(d) the auditor shall, at the time of transmitting the report to the chief executive officer and chief financial officer, provide the audit committee of the company and the Superintendent with a copy.
- 1991, c. 45, s. 333
- 2005, c. 54, s. 439
Marginal note:Auditor of subsidiaries
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 the auditor of the company as the auditor of that subsidiary.
(3) Subsection (1) does not apply in respect of any particular subsidiary where the 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 company.
- Date modified: