Financial Administration Act (R.S.C., 1985, c. F-11)

Auditor’s Reports

Marginal note:Annual auditor’s report

• 132 (1) Each parent Crown corporation shall cause an annual auditor’s report to be prepared, in respect of itself and its wholly-owned subsidiaries, if any, in accordance with the regulations, on

  • (a) the financial statements referred to in section 131 and any revised financial statement referred to in subsection 133(3); and

  • (b) any quantitative information required to be audited pursuant to subsection (5).

• Marginal note:Contents

  (2) A report under subsection (1) shall be addressed to the appropriate Minister and shall

  • (a) include separate statements whether in the auditor’s opinion

    • (i) the financial statements are presented fairly in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding year,

    • (ii) the quantitative information is accurate in all material respects and, if applicable, was prepared on a basis consistent with that of the preceding year, and

    • (iii) the transactions of the corporation and of each subsidiary that have come to the auditor’s notice in the course of his examination for the report were in accordance with this Part, the regulations, the charter and by-laws of the corporation or subsidiary and any directive given to the corporation; and

  • (b) call attention to any other matter falling within the scope of the auditor’s examination for the report that, in his opinion, should be brought to the attention of Parliament.

• Marginal note:Regulations

  (3) The Treasury Board may make regulations prescribing the form and manner in which the report referred to in subsection (1) is to be prepared.

• Marginal note:Separate reports

  (4) Notwithstanding any other provision of this Part, the auditor of a parent Crown corporation may prepare separate annual auditor’s reports on the statements referred to in paragraph (1)(a) and on the information referred to in paragraph (1)(b) if, in the auditor’s opinion, separate reports would be more appropriate.

• Marginal note:Audit of quantitative information

  (5) The Treasury Board may require that any quantitative information required to be included in a parent Crown corporation’s annual report pursuant to subsection 150(3) be audited.

• Marginal note:Other reports

  (6) The auditor of a parent Crown corporation shall prepare such other reports respecting the corporation or any wholly-owned subsidiary of the corporation as the Governor in Council may require.

• Marginal note:Examination

  (7) An auditor shall make such examination as he considers necessary to enable him to prepare a report under subsection (1) or (6).

• Marginal note:Reliance on internal audit

  (8) An auditor shall, to the extent he considers practicable, rely on any internal audit of the corporation being audited that is conducted pursuant to subsection 131(3).

Marginal note:Errors and omissions

• 133 (1) A director or officer of a Crown corporation shall forthwith notify the auditor and the audit committee of the corporation, if any, of any error or omission of which the director or officer becomes aware in a financial statement that the auditor or a former auditor has reported on or in a report prepared by the auditor or a former auditor pursuant to section 132.

• Marginal note:Idem

  (2) Where an auditor or former auditor of a Crown corporation is notified or becomes aware of any error or omission in a financial statement that the auditor or former auditor has reported on or in a report prepared by the auditor or former auditor pursuant to section 132, he shall forthwith notify each director of the corporation of the error or omission if he is of the opinion that the error or omission is material.

• Marginal note:Correction

  (3) Where an auditor or former auditor of a Crown corporation notifies the directors of an error or omission in a financial statement or report pursuant to subsection (2), the corporation shall prepare a revised financial statement or the auditor or former auditor shall issue a correction to the report, as the case may be, and a copy thereof shall be given to the appropriate Minister.

Auditors

Marginal note:Appointment of auditor

• 134 (1) Subject to subsection (2), the auditor of a Crown corporation shall be appointed annually by the Governor in Council, after the appropriate Minister has consulted the board of directors of the corporation, and may be removed at any time by the Governor in Council, after the appropriate Minister has consulted the board.

• Marginal note:Auditor General

  (2) The Auditor General of Canada shall be appointed by the Governor in Council as the auditor, or a joint auditor, of each Crown corporation, unless the Auditor General waives the requirement of being so appointed.

• Marginal note:Idem

  (3) Subsections (1) and (2) do not apply in respect of any parent Crown corporation the auditor of which is specified by any other Act of Parliament to be the Auditor General of Canada, but the Auditor General is eligible to be appointed as the auditor, or a joint auditor, of a parent Crown corporation pursuant to subsection (1) and section 135 does not apply to him.

• (4) [Repealed, 2005, c. 30, s. 36]

• Marginal note:Criteria for appointment

  (5) The Governor in Council may make regulations prescribing the criteria to be applied in selecting an auditor for appointment pursuant to subsection (1).

• Marginal note:Re-appointment

  (6) An auditor of a Crown corporation is eligible for re-appointment on the expiration of the auditor’s appointment.

• Marginal note:Continuation in office

  (7) Notwithstanding subsection (1), if an auditor of a Crown corporation is not appointed to take office on the expiration of the appointment of an incumbent auditor, the incumbent auditor continues in office until a successor is appointed.

Marginal note:Persons not eligible

• 135 (1) A person is disqualified from being appointed or re-appointed or continuing as an auditor of a Crown corporation pursuant to section 134 if that person is not independent of the corporation, any of its affiliates, or the directors or officers of the corporation or any of its affiliates.

• Marginal note:Independence

  (2) For the purposes of this section,

  • (a) independence is a question of fact; and

  • (b) a person is deemed not to be independent if that person or any of that person’s business partners

    • (i) is a business partner, director, officer or employee of the Crown corporation or any of its affiliates, or a business partner of any director, officer or employee of the corporation or any of its affiliates,

    • (ii) beneficially owns or controls, directly or indirectly through a trustee, legal representative, agent or other intermediary, a material interest in the shares or debt of the Crown corporation or any of its affiliates, or

    • (iii) has been a receiver, receiver-manager, liquidator or trustee in bankruptcy of the Crown corporation or any of its affiliates within two years of the person’s proposed appointment as auditor of the corporation.

• Marginal note:Resignation

  (3) An auditor of a Crown corporation who becomes disqualified under this section shall resign immediately after becoming aware of the disqualification.

Marginal note:Qualifications preserved

136 Nothing in sections 134 and 135 shall be construed as empowering the appointment, re-appointment or continuation in office as an auditor of a Crown corporation of any person who does not meet any qualifications for such appointment, re-appointment or continuation established by any other Act of Parliament.

Marginal note:Resignation

137 A resignation of an auditor of a Crown corporation becomes effective at the time the corporation receives a written resignation from the auditor or at the time specified in the resignation, whichever is later.

Special Examination

Marginal note:Special examination

• 138 (1) Each parent Crown corporation shall cause a special examination to be carried out in respect of itself and its wholly-owned subsidiaries, if any, to determine if the systems and practices referred to in paragraph 131(1)(b) were, in the period under examination, maintained in a manner that provided reasonable assurance that they met the requirements of paragraphs 131(2)(a) and (c).

• Marginal note:Time for examination

  (2) A special examination shall be carried out at least once every 10 years and at any additional times that the Governor in Council, the appropriate Minister, the board of directors of the corporation to be examined or the Auditor General of Canada may require.

• Marginal note:Plan

  (3) Before an examiner commences a special examination, he shall survey the systems and practices of the corporation to be examined and submit a plan for the examination, including a statement of the criteria to be applied in the examination, to the audit committee of the corporation, or if there is no audit committee, to the board of directors of the corporation.

• Marginal note:Resolution of disagreements

  (4) Any disagreement between the examiner and the audit committee or board of directors of a corporation with respect to a plan referred to in subsection (3) may be resolved

  • (a) in the case of a parent Crown corporation, by the appropriate Minister; and

  • (b) in the case of a wholly-owned subsidiary, by the parent Crown corporation that wholly owns the subsidiary.

• Marginal note:Reliance on internal audit

  (5) An examiner shall, to the extent he considers practicable, rely on any internal audit of the corporation being examined conducted pursuant to subsection 131(3).

Marginal note:Report

• 139 (1) An examiner shall, on completion of the special examination, submit a report on his findings to the board of directors of the corporation examined.

• Marginal note:Contents

  (2) The report of an examiner under subsection (1) shall include

  • (a) a statement whether in the examiner’s opinion, with respect to the criteria established pursuant to subsection 138(3), there is reasonable assurance that there are no significant deficiencies in the systems and practices examined; and

  • (b) a statement of the extent to which the examiner relied on internal audits.

• Marginal note:Report to Minister and President of the Treasury Board

  (3) The board of directors shall, within 30 days after the day on which it receives the report, submit the report to the appropriate Minister and the President of the Treasury Board.

• Marginal note:Report available to public

  (4) The board of directors shall, within 60 days after the day on which it receives the report, make the report available to the public.

Marginal note:Special report to appropriate Minister

140 Where the examiner of a parent Crown corporation, or a wholly-owned subsidiary of a parent Crown corporation, is of the opinion that the report under subsection 139(1) contains information that should be brought to the attention of the appropriate Minister, the examiner shall, after consultation with the board of directors of the corporation, or with the boards of the subsidiary and corporation, as the case may be, report that information to the Minister and furnish the board or boards with a copy of the report.

Marginal note:Special report to Parliament

141 Where the examiner of a parent Crown corporation, or a wholly-owned subsidiary of a parent Crown corporation, is of the opinion that the report under subsection 139(1) contains information that should be brought to the attention of Parliament, the examiner shall, after consultation with the appropriate Minister and the board of directors of the corporation, or with the boards of the subsidiary and corporation, as the case may be, prepare a report on that information for inclusion in the next annual report of the corporation and furnish the board or boards, the appropriate Minister and the Auditor General of Canada with copies of the report.

Marginal note:Examiner

• 142 (1) Subject to subsection (2), a special examination referred to in section 138 shall be carried out by the auditor of a Crown corporation.

• Marginal note:Examiner

  (2) Where, in the opinion of the Governor in Council, a person other than the auditor of a Crown corporation should carry out a special examination, the Governor in Council may, after the appropriate Minister has consulted the board of directors of the corporation, appoint an auditor who is qualified for the purpose to carry out the examination in lieu of the auditor of the corporation and may, after the appropriate Minister has consulted the board, remove that qualified auditor at any time.

• (3) [Repealed, 2005, c. 30, s. 39]

• Marginal note:Applicable provisions

  (4) Subject to subsection (5), sections 135 and 137 apply in respect of an examiner as though the references therein to an auditor were references to an examiner.

• Marginal note:Auditor General eligible

  (5) The Auditor General of Canada is eligible to be appointed an examiner and section 135 does not apply to the Auditor General of Canada in respect of such an appointment.

Consultation with Auditor General

Marginal note:Consultation with Auditor General

143 The auditor or examiner of a Crown corporation may at any time consult the Auditor General of Canada on any matter relating to his audit or special examination and shall consult the Auditor General with respect to any matter that, in the opinion of the auditor or examiner, should be brought to the attention of Parliament pursuant to paragraph 132(2)(b) or section 141.

Right to Information

Marginal note:Right to information

• 144 (1) On the demand of the auditor or examiner of a Crown corporation, the present or former directors, officers, employees or agents of the corporation shall furnish such

  • (a) information and explanations, and

  • (b) access to records, documents, books, accounts and vouchers of the corporation or any of its subsidiaries

  as the auditor or examiner considers necessary to enable him to prepare any report as required by this Division and that the directors, officers, employees or agents are reasonably able to furnish.

• Marginal note:Idem

  (2) On the demand of the auditor or examiner of a Crown corporation, the directors of the corporation shall

  • (a) obtain from the present or former directors, officers, employees or agents of any subsidiary of the corporation such information and explanations as the auditor or examiner considers necessary to enable him to prepare any report as required by this Division and that the present or former directors, officers, employees or agents are reasonably able to furnish; and

  • (b) furnish the auditor or examiner with the information and explanations so obtained.

• Marginal note:Reliance on reports

  (3) An auditor or examiner of a Crown corporation may reasonably rely on any report of any other auditor or examiner.