Last week, the OSC's Investment Funds and Structured
Products Branch released a notice reminding investment fund issuers
that, where an auditor has not performed a review of an investment
fund's interim financial report, s. 2.12 of NI 81-106 requires the report to be
accompanied by a notice indicating that fact.
In the course of its IFRS review, Branch staff identified
non-compliance with this notice requirement. While the instrument
does not specify the form of notice, the Companion Policy states that the notice should
be on a separate page appearing immediately before the interim
financial report. According to Branch staff, a lack of the required
notice implies that a review was conducted and that the auditor did
not express a reservation. Marking interim financial reports as
"unaudited" does not fulfill this requirement.
In cases where the reports appeared to have been reviewed by the
auditor, the Branch found a lack of clarity in respect of whether
the reviews were in accordance with section 7060 Auditor Review of
Interim Financial Statements of the CPA Canada Handbook.
As such, Branch staff have requested that investment fund
issuers refile their interim financial reports for the period
ending June 30, 2014 with the required notice and accompanied by a
news release explaining the information being filed. Branch staff
also reminded investment fund managers that a deficiency in the
required disclosure could ultimately result with the issuer being
placed on the default list.
This is the second notice released by the Branch in connection
with its review the first IFRS interim financial reports for the
period ended June 30, 2014. The first notice
was released in October. The OSC is continuing to monitor
compliance with requirements regarding the disclosures respecting
auditor review and may release further notices as necessary.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Over the past year, we have watched the Canadian dollar drop relative to its U.S. counterpoint impacting Canadian businesses. U.S. goods and services are now more expensive, U.S. sales make a premium and errors when recording foreign exchange transactions can cost you more money.
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