Annual Audit Manual
COPYRIGHT NOTICE — This document is intended for internal use. It cannot be distributed to or reproduced by third parties without prior written permission from the Copyright Coordinator for the Office of the Auditor General of Canada. This includes email, fax, mail and hand delivery, or use of any other method of distribution or reproduction. CPA Canada Handbook sections and excerpts are reproduced herein for your non-commercial use with the permission of The Chartered Professional Accountants of Canada (“CPA Canada”). These may not be modified, copied or distributed in any form as this would infringe CPA Canada’s copyright. Reproduced, with permission, from the CPA Canada Handbook, The Chartered Professional Accountants of Canada, Toronto, Canada.
8012 Audit report
Sep-2022
In This Section
Consultation on the auditor’s report
Identification of auditing standards in our report
OAG Policy
The engagement leader shall consult with Audit Services on the draft English and French Auditor’s Reports, and matters of significance related to the report. [Jun-2020]
The engagement leader shall document his/her disposition of any advice received from Audit Services and obtain agreement on the advice disposition prior to signing of the English and French Auditor’s Reports. [Jun-2020]
CAS Requirement
The auditor’s report shall be in writing (CAS 700.20).
(CAS 700.21-49 set out the requirements for the form and content of the auditor’s report when reporting in accordance with Canadian Auditing Standards.)
If the auditor is required by law or regulation of a specific jurisdiction to use a specific layout or wording of the auditor’s report, the auditor’s report shall refer to Canadian generally accepted auditing standards only if the auditor’s report includes, at a minimum, each of the following elements (CAS 700.50):
(a) A title.
(b) An addressee, as required by the circumstances of the engagement.
(c) An Opinion section containing an expression of opinion on the financial statements and a reference to the applicable financial reporting framework used to prepare the financial statements (including identifying the jurisdiction of origin of the financial reporting framework that is not International Financial Reporting Standards or International Public Sector Accounting Standards, see paragraph 27).
(d) An identification of the entity's financial statements that have been audited.
(e) A statement that the auditor is independent of the entity in accordance with the relevant ethical requirements relating to the audit, and has fulfilled the auditor's other ethical responsibilities in accordance with these requirements. The statement shall identify the jurisdiction of origin of the relevant ethical requirements or refer to the IESBA Code.
(f) Where applicable, a section that addresses, and is not inconsistent with, the reporting requirements in paragraph 22 of CAS 570.
(g) Where applicable, a Basis for Qualified (or Adverse) Opinion section that addresses, and is not inconsistent with, the reporting requirements in paragraph 23 of CAS 570.
(h) Where applicable, a section that includes the information required by CAS 701, or additional information about the audit that is prescribed by law or regulation and that addresses, and is not inconsistent with, the reporting requirements in that CAS.
(i) Where applicable, a section that addresses the reporting requirements in paragraph 24 of CAS 720.
(j) A description of management's responsibilities for the preparation of the financial statements and an identification of those responsible for the oversight of the financial reporting process that addresses, and is not inconsistent with, the requirements in paragraphs 33-36.
(k) A reference to Canadian generally accepted auditing standards and the law or regulation, and a description of the auditor's responsibilities for an audit of the financial statements that addresses, and is not inconsistent with, the requirements in paragraphs 37-C40.
(l) For audits of complete sets of general purpose financial statements of listed entities, the name of the engagement partner unless, in rare circumstances, such disclosure is reasonably expected to lead to a significant personal security threat.
(m) The auditor’s signature.
(n) The auditor's address.
(o) The date of the auditor’s report.
OAG Guidance
CAS 700.21-49 set out the requirements for the form and content of the auditor’s report when reporting in accordance with Canadian Auditing Standards.
If reporting in accordance with CASs but law or regulation mandates the specific layout or wording to be used, or if reporting in accordance with CASs, the CASs mandate the minimum elements that shall be included in the auditor’s report. There are summarized in CAS 700.50 above.
Refer to the CAS 700 Auditor’s Report Template for guidance on the format and style of a CAS audit report.
The table below summarizes the required audit report elements and related CAS 700 requirements.
| Audit report element | CAS 700 requirements |
|---|---|
| Title | CAS 700.21 |
| Addressee | CAS 700.22 |
| Auditor’s Opinion | CAS 700.23—700.27 |
| Basis for Opinion | CAS 700.28 |
| Going Concern | CAS 700.29 |
| Key Audit Matters | CAS 700.C30—700.C31 |
| Other Information | CAS 700.32 |
| Responsibilities for the Financial Statements | CAS 700.33—700.36 |
| Auditor’s Responsibilities for the Audit of the Financial Statements | CAS 700.37—700.C40 |
| Location of the description of the auditor’s responsibilities for the audit of the financial statements | CAS 700.41—700.42 |
| Other reporting responsibilities | CAS 700.43—700.45 |
| Name of the Engagement Partner | CAS 700.46 |
| Signature of the Auditor | CAS 700.47 |
| Auditor’s Address | CAS 700.48 |
| Date of the Auditor’s Report | CAS 700.49 |
| Auditor’s Report Prescribed by Law or Regulation | CAS 700.50 |
| Auditor’s Report for Audits Conducted in Accordance with Both Auditing Standards of a Specific Jurisdiction and International Standards on Auditing | CAS 700.51—700.52 |
Attach the final version of our report to the procedure “Other auditing and completion procedures” and document other reporting-related procedures in that working paper as appropriate.
CAS Requirement
An auditor may be required to conduct an audit in accordance with the auditing standards of a specific jurisdiction (the "national auditing standards"), and has additionally complied with the CASs in the conduct of the audit. If this is the case, the auditor’s report may refer to Canadian generally accepted auditing standards in addition to the national auditing standards, but the auditor shall do so only if (CAS 700.51):
(a) there is no conflict between the requirements in the national auditing standards and those in CASs that would lead the auditor (i) to form a different opinion, or (ii) not to include an Emphasis of Matter paragraph or Other Matter paragraph that, in the particular circumstances, is required by CASs; and
(b) the auditor’s report includes, at a minimum, each of the elements set out in paragraphs 50(a)-(o) when the auditor uses the layout or wording specified by the national auditing standards. However, reference to "law or regulation" in paragraph 50(k) shall be read as reference to the national auditing standards. The auditor’s report shall thereby identify such national auditing standards.
When the auditor’s report refers to both the national auditing standards and Canadian generally accepted auditing standards, the auditor’s report shall identify the jurisdiction of origin of the national auditing standards (CAS 700.52).
CAS Guidance
The auditor may refer in the auditor’s report to the audit having been conducted in accordance with both Canadian generally accepted auditing standards as well as the national auditing standards when, in addition to complying with the relevant national auditing standards, the auditor complies with each of the CASs relevant to the audit (CAS 700.A76).
A reference to both Canadian generally accepted auditing standards and the national auditing standards is not appropriate if there is a conflict between the requirements in CASs and those in the national auditing standards that would lead the auditor to form a different opinion or not to include an Emphasis of Matter paragraph or Other Matter that, in the particular circumstances, is required by CASs. In such a case, the auditor’s report refers only to the auditing standards (either Canadian generally accepted auditing standards or the national auditing standards) in accordance with which the auditor’s report has been prepared (CAS 700.A77).
OAG Guidance
In our description of the auditor’s responsibilities in our audit report, we refer to the auditing standards in accordance with which we conducted the audit. Depending on the circumstances of our engagements, this may be CASs and/or ISAs.
CAS Requirement
If supplementary information that is not required by the applicable financial reporting framework is presented with the audited financial statements, the auditor shall evaluate whether, in the auditor's professional judgment, supplementary information is nevertheless an integral part of the financial statements due to its nature or how it is presented. When it is an integral part of the financial statements, the supplementary information shall be covered by the auditor's opinion (CAS 700.53).
If supplementary information that is not required by the applicable financial reporting framework is not considered an integral part of the audited financial statements, the auditor shall evaluate whether such supplementary information is presented in a way that sufficiently and clearly differentiates it from the audited financial statements. If this is not the case, then the auditor shall ask management to change how the unaudited supplementary information is presented. If management refuses to do so, the auditor shall identify the unaudited supplementary information and explain in the auditor’s report that such supplementary information has not been audited (CAS 700.54).
CAS Guidance
In some circumstances, the entity may be required by law, regulation or standards, or may voluntarily choose, to present together with the financial statements supplementary information that is not required by the applicable financial reporting framework. For example, supplementary information might be presented to enhance a user’s understanding of the applicable financial reporting framework or to provide further explanation of specific financial statement items. Such information is normally presented in either supplementary schedules or as additional notes (CAS 700.A78).
Paragraph 53 of this CAS explains that the auditor’s opinion covers supplementary information that is an integral part of the financial statements because of its nature or how it is presented. This evaluation is a matter of professional judgment. To illustrate (CAS 700.A79):
- When the notes to the financial statements include an explanation or the reconciliation of the extent to which the financial statements comply with another financial reporting framework, the auditor may consider this to be supplementary information that cannot be clearly differentiated from the financial statements. The auditor’s opinion would also cover notes or supplementary schedules that are cross-referenced from the financial statements.
- When an additional profit and loss account that discloses specific items of expenditure is disclosed as a separate schedule included as an Appendix to the financial statements, the auditor may consider this to be supplementary information that can be clearly differentiated from the financial statements.
Supplementary information that is covered by the auditor’s opinion does not need to be specifically referred to in the auditor’s report when the reference to the notes in the description of the statements that comprise the financial statements in the auditor's report is sufficient (CAS 700.A80).
Law or regulation may not require that the supplementary information be audited, and management may decide to ask the auditor not to include the supplementary information within the scope of the audit of the financial statements (CAS 700.A81).
The auditor’s evaluation whether unaudited supplementary information is presented in a manner that could be construed as being covered by the auditor’s opinion includes, for example, where that information is presented in relation to the financial statements and any audited supplementary information, and whether it is clearly labeled as "unaudited." (CAS 700.A82)
Management could change the presentation of unaudited supplementary information that could be construed as being covered by the auditor’s opinion, for example, by (CAS 700.A83):
- Removing any cross references from the financial statements to unaudited supplementary schedules or unaudited notes so that the demarcation between the audited and unaudited information is sufficiently clear.
- Placing the unaudited supplementary information outside of the financial statements or, if that is not possible in the circumstances, at a minimum placing the unaudited notes together at the end of the required notes to the financial statements and clearly labeling them as unaudited. Unaudited notes that are intermingled with the audited notes can be misinterpreted as being audited.
The fact that supplementary information is unaudited does not relieve the auditor of the responsibility described in CAS 720 (CAS 700.A84).
OAG Guidance
Also refer to OAG Audit 8030 for detailed guidance on auditing other information.
OAG Guidance
The Chartered Professional Accountants Act (CPA Act) came into force on 16 May 2012 in the Province of Quebec. As a result, Quebec’s accounting professionals (CA, CGA, CMA) are members of a single order—the Order of Chartered Professional Accountants/Ordre des comptables professionnels agréés (CPA Order).
As of 16 May 2022, all Quebec members of the CPA Order must use only the CPA designation.
What this means for engagement leaders and signatories of auditor’s reports
Under the CPA Act, chartered professional accountants who sign auditor’s reports in the province of Quebec must ensure that their signature blocks conform with the requirements of the CPA Act. Use of the “CPA auditor” designation communicates that the signatory holds a public accountancy permit and is therefore authorized to sign assurance engagement reports. These requirements apply even when signing on behalf of the Auditor General of Canada.
Quebec members of the CPA Order will also wish to ensure that their signature blocks conform with the requirements of the CPA Act when signing other correspondence related to these engagements, such as the Report to the Audit Committee or the Engagement Letter.
In our Office, Quebec members of the CPA Order who sign auditor’s reports in Ontario are typically also members of the Ontario Institute of Chartered Accountants and sign the Ontario opinion as Ontario CPAs, CAs. As of 1 November 2022, Ontario members who possess legacy designations will have the option of using both CPA along with their legacy designation, or the designation CPA on its own. See Signature block for Ontario CPAs, CAs below for more details.
Standard signature block for auditor’s reports
The Quebec CPA order has communicated a number of signature block formats. The following signature blocks are recommended for use when signing assurance engagement reports.
The examples below should be followed by all Quebec members as of 16 May 2022.
| Opinion signed by | English | French |
|---|---|---|
|
Delegated individual—member of Quebec order In the province of Quebec |
[signature] Mary Smith, CPA auditor1 Montréal, Canada |
Pour la vérificatrice générale du Canada, [signature] Mary Smith, CPA auditrice1 Montréal, Canada Le 16 mai 2022 |
|
Delegated individual—member of both Ontario institute and Quebec order In the province of Ontario (until 1 November 2022) |
[signature] Mary Smith, CPA, CA Ottawa, Canada |
Pour la vérificatrice générale du Canada, [signature] Mary Smith, CPA, CA Ottawa, Canada |
|
Delegated individual—member of both Ontario institute and Quebec order In the province of Ontario (as of 1 November 2022) |
[signature] Mary Smith, CPA, CA (CA optional) Ottawa, Canada |
Pour la vérificatrice générale du Canada, [signature] Mary Smith, CPA, CA (CA optional) Ottawa, Canada |
1 Members of the Quebec order must hold a public accountancy permit to sign audit reports.
2 Members of the Quebec order who are also members of the Ontario institute should not represent themselves as Quebec CPAs when signing opinions in Ontario.
OAG Guidance
CPA initiative by Institute of Chartered Accountants of Ontario (ICAO)
Background
Since 1 July 2013, members are required to use the “CPA, CA” designations after their names. As of 1 November 2022, members with any legacy designation will have the option of using both, or using CPA on its own.
Signature block requirements and Office preference for opinions signed in Ontario
The regulations allow for a second line in the signature block to indicate accounting designations received outside Ontario. This implies that auditor’s reports could potentially have an additional line after the signatory’s name. However, it has been common practice at the OAG that only the Ontario designation is presented after the signatory’s name if the report is being signed in Ottawa. Current practice also does not include presenting non-accounting designations as part of the signatory’s name.
Since 1 July 2013, the Office preference has been that the signature block includes only CPA, CA after the signatory’s name. As of 1 November 2022, the signatory’s name may be followed by either “CPA, CA”, or simply “CPA”.
The example below should be followed by all Ontario members until 1 November 2022.
| Opinion signed by | English | French |
|---|---|---|
|
Delegated individual—member of Ontario institute In the province of Ontario |
[signature] John White, CPA, CA Ottawa, Canada |
Pour la vérificatrice générale du Canada, [signature] John White, CPA, CA Ottawa, Canada |
As of 1 November 2022, the use of the legacy designation CA becomes optional in Ontario.
| Opinion signed by | English | French |
|---|---|---|
|
Delegated individual—member of Ontario institute In the province of Ontario |
[signature] John White, CPA Ottawa, Canada |
Pour la vérificatrice générale du Canada, [signature] John White, CPA Ottawa, Canada |
|
Delegated individual—member of Ontario institute In the province of Ontario |
[signature] John White, CPA, CA Ottawa, Canada |
Pour la vérificatrice générale du Canada, [signature] John White, CPA, CA Ottawa, Canada |