Header Image
    Recently Visited
    • Print
    • Share

    Country by Country Financial Reporting and Auditing Framework

    Download pdf

    Canada – Crowe Soberman LLP (December 2013)

     

     

     Preparation and Filing of Statutory Financial Statements

     

    Generally, the provincial or federal corporations' act which is applicable to the company determines the filing requirements.

     

    Corporations have to file financial statements with their tax returns within six months of the fiscal year end.

     

    Partnerships have to file partnership returns and related financial statements by March 31st following the calendar year end, if all partners are individuals or trusts; or by five months after the fiscal period if all the partners are corporations.

     

    Government, not-for-profit organizations and regulated entities may have different reporting requirements.

     

    Financial Reporting Framework

     

    Listed entities in Canada are required to prepare their financial statements in accordance with International Financial Reporting Standards (IFRS).

     

    All other entities, subject to any other requirements which may be otherwise specified, have the option to prepare their financial statements in accordance with Accounting Standards for Private Enterprises (ASPE), as issued by CPA Canada, or IFRS.

     

    Subsidiary companies of listed companies have an option, therefore, to prepare their financial statements in accordance with ASPE or IFRS. 

     

    Not-for-profit organizations have the option to prepare their financial statements in accordance with NFPO standards, as issued by CPA Canada, or IFRS.

     

    Audit Requirements

     

    The requirement for audited financial statements for private entities is determined by the various provincial and/or federal statutes.  Under the Canada Corporations Act, as well as the larger provincial statutes, the audit requirement can be waived if all of the shareholders consent in writing to the exemption in respect of that year.

     

    All listed entities are required to file audited financial statements with the securities regulators.

     

    There may be a requirement specified by other third parties for an audit (e.g. industry regulatory bodies, lenders).

     

    Audit Appointment, Rotation and Joint Audits

     

    Audit appointments in Canada are not normally for a fixed period.  An auditor can normally be appointed / removed at any time.  Canada does not currently have any rules relating to mandatory rotation of audit firms but there are requirements within the ethical standards regarding partner rotation for listed entities.  Joint audits are very rare.

     

    Auditing Standards

     

    All audits have to be conducted in accordance with Canadian Auditing Standards which are consistent with the clarity ISA issued by the IAASB, subject to some changes relevant to Canadian circumstances.

     

    Ethical Framework

     

    Crowe Soberman LLP is bound by the Rules of Professional Conduct of CPA Ontario.  This is based on the IFAC Code issued by the IESBA with additional commentary for Canada.

     

    The provincial institute in each province is responsible for ethical standards; however, they are determined initially by the national body, CPA Canada (formerly CICA).

     

    At present, there is an exposure draft issued by CPA Canada proposing revisions to the independence standards to converge with the changes to the IFAC Code which were effective January 1, 2011.

     

    External Monitoring

     

    Firms are subject to external review by the Canadian Public Accountability Board (CPAB) on a periodic basis for listed entities audited by the firm.  CPAB reviews all auditors of less than 50 listed companies on a three year cycle; those with between 50 and 99 listed entity clients every two years; and firms that audit more than 100 listed entities are subject to annual reviews.  Reports on individual firms are not publicly available; however, the annual report on their inspection programme, summarizing their findings across the profession as a whole, is available from their website.

     

    The Provincial institutes conduct inspections in respect of quality control and assurance work not covered by CPAB.  These inspections are generally performed every three years.  It does not include tax and advisory services.

     

    Internal Quality Control

     

    We have established a formal annual monitoring and peer review process which allows us to gain assurance that our firm's quality control systems are operating effectively.  It consists of both reviews of individual audit files, and an assessment of compliance with the firm's policies and procedures relating to independence and audit quality.  The files for review are selected using a risk-based approach.  Every A & A partner is subject to a review of two assurance files every year.

     

    Periodically, other service areas of the firm are also subject to internal file reviews.

     

    Transparency Report

     

    There are no transparency reporting requirements as such in Canada.

     

    Firms that audit listed entities are required to be registered with CPAB.  Certain information about the firm is available to the public on CPAB's website, including reporting issuer audit clients and authorized signing individuals.

     


     



    Contact Us
    David Chitty - Audit
    London, United Kingdom
    +44 20.7842.7292


    Additional Contacts: