6. Appointment of Auditors - discussion only

[Michael von Keitz]

Discussion on Appointment of Auditors.

[Gordon Ritchie]

Surely as a registered non-profit we will need some form of audited statements.

[Christopher Mallon]

Surely as a registered non-profit we will need some form of audited statements.


"Different levels of financial accountability will be imposed on different types of corporations depending on their level of annual revenue and whether they are a soliciting corporation. Soliciting corporations with annual revenues greater than $250,000 require an audit, whereas non-soliciting corporations are required to have an audit only where their annual revenues are greater than $1 million. Members of both soliciting and non-soliciting corporations with annual revenues below these prescribed annual revenue levels will have some limited choice in the level of financial scrutiny they wish to impose on the corporation - an audit engagement, a review engagement with a lesser scope of examination or no review or engagement whatsoever."

http://www.longwoods.com/content/17390

[Egidijus Zeromskis]

I think I read that the threshold is $100 000 of annual budget. As the organization is based mainly on memberships, imho, it should have an independent audit. (Though, I don't like how much they charge :(

[Christopher Mallon]

I think I read that the threshold is $100 000 of annual budget. As the organization is based mainly on memberships, imho, it should have an independent audit. (Though, I don't like how much they charge :(

If you read what I posted, you would see that it is in fact $1 Million, not $100k.

Even a Review Engagement used to cost the CFC $3000, I'd hate to see the bill for a full audit.

[Paul Leblanc]

It's a dilema. Off the top of my head I would have said an audit that was of any use would cost $10,000 which we don't have.
We also have a situation where the office cannot be closely supervised by any executives due to geography.
What I do for the Foundation is share the financial statements with the other trustees every quarter so that at least keeps me honest.
An audit can provide the executive with useful information to improve efficiency but I don't think there is $10,000 worth of efficiencies to ge had.
I'd like to hear from Bob Gillanders on this as I believe he looked at this possibility a couple of years ago.

[Christopher Mallon]

Certainly there should be an "internal audit" each year - I presume the Treasurer would lead this, perhaps with one or two volunteers. Our books these days are not as complicated or as messy as they have been in the past.

[Egidijus Zeromskis]

If you read what I posted, you would see that it is in fact $1 Million, not $100k.

Even a Review Engagement used to cost the CFC $3000, I'd hate to see the bill for a full audit.

Chris, I read what you wrote, however during the OCA meeting I read about non-profit organizations too and saw a 100k figure. (Your link does not work on my computer).

Now I found a table at http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs05010.html
with 1M.

[Michael Barron]

Certainly there should be an "internal audit" each year - I presume the Treasurer would lead this, perhaps with one or two volunteers. Our books these days are not as complicated or as messy as they have been in the past.

Exactly!
There should be an "internal audit" each year - performed by volunteers.
And I'm willing to volunteer for such work...

[Bob Gillanders]

It's a dilema. Off the top of my head I would have said an audit that was of any use would cost $10,000 which we don't have.
We also have a situation where the office cannot be closely supervised by any executives due to geography.
What I do for the Foundation is share the financial statements with the other trustees every quarter so that at least keeps me honest.
An audit can provide the executive with useful information to improve efficiency but I don't think there is $10,000 worth of efficiencies to ge had.
I'd like to hear from Bob Gillanders on this as I believe he looked at this possibility a couple of years ago.

We did have $3,000 in the budget this past year for an audit(review), but we have admittedly been slow in the follow thru. We have made inquiries and have just recently received a quote. (names & amounts withheld for now)

We are looking at a review engagement, similar to an audit, a little cheaper but totally appropriate for our organization. AFAIK, an audit/review by independent auditors is not mandatory, but it would add credibility in the eyes of potential sponsors as well give comfort to our stakeholders.

The books are in good shape. In addition to the quarterly financial reports that are on the website, Gerry also does a monthly summary report which is reviewed by Fred, Michael and myself.

[Lyle Craver]

Gordon - a full audit is required for charitable organizations which regretably the CFC no longer is. Non-profits don't have that requirement which is probably a good thing since most of the provincial affiliates would have at least 20% of their funds consumed each year by audit costs unless they found a CA willing to do it pro bono.

(I'm not familiar with the legislation in all provinces but what I have said is true federally and in BC which is where the CFC and the BCCF respectively are registered)

[Pierre Dénommée]

In Quebec, non-profit don't audit unless it is required by the Government.

[Vladimir Drkulec]

Gordon - a full audit is required for charitable organizations which regretably the CFC no longer is. Non-profits don't have that requirement which is probably a good thing since most of the provincial affiliates would have at least 20% of their funds consumed each year by audit costs unless they found a CA willing to do it pro bono.


I don't think that the OCA could do an audit for less than at least 50% of their funds being consumed and probably quite a bit more. I think the audits apply when large sums of money are being generated. If there was an audit requirement many of the provincial associations would be wise to simply disband.