NIN 89/30 - Qualifications Of Auditors Filing Reports [NIN - Rescinded]

The Securities Regulation has been amended, effective November 1, 1989, to clarify who is qualified to prepare an auditor's report in respect of financial statements required to be filed with the Securities Commission.

Prior to the amendment, the Securities Act and the Securities Regulation did not address this issue.

WHO MAY PREPARE AN AUDITOR'S REPORT

Section 4(4) and (4.1) of the Securities Regulation provide that a person is qualified to make an auditor's report only if:

(a) the person is a member, or is a partnership whose partners are members, in good standing of, and is authorized to carry on the practice of public accounting by, the institute of chartered accountants of a province of Canada,

(b) the person is a member, or is a partnership whose partners are members, in good standing of, and is authorized to carry on the practice of public accounting by, the Certified General Accountants' Association of British Columbia,

(c) the person is certified as an auditor by the Auditor Certification Board established under section 205 of the British Columbia Company Act, or

(d) the person

(i) has qualifications as an auditor in a jurisdiction other than a province of Canada that the Superintendent considers are similar to the qualifications for membership in the Institute of Chartered Accountants of British Columbia, and

(ii) is authorized to carry on the practice of public accounting by the appropriate authority in that jurisdiction.

AUDITORS IN CANADA

Auditors carrying on the practice of public accounting in Canada must qualify under one of paragraphs (a), (b) or (c) set out above.

The requirement in paragraphs (a) and (b) that, in addition to being a member of a professional association, the person must be authorized to practice public accounting ensures that the person will be subject to requirements of the association relating to liability insurance, professional development and practice review.

AUDITORS OUTSIDE OF CANADA

Auditors carrying on the practice of public accounting outside of Canada must qualify under paragraph (d) set out above.

In addition to being authorized to carry on the practice of public accounting by the appropriate authority, the person must also have qualifications that the Superintendent considers are similar to the qualifications required for membership in the Institute of Chartered Accountants of British Columbia.

The Superintendent considers that an auditor carrying on the practice of public accounting in the United States who is

(a) a certified public accountant, and

(b) in good standing and authorized to carry on the practice of public accounting under the laws of the state in which he has his residence or principal office

is qualified to file an auditor's report under section 4 of the Securities Regulation.

Questions as to whether the qualifications of an auditor in another country will be acceptable to the Superintendent should be directed to the Deputy Superintendent, Registration and Statutory Filings.

RESPONSIBILITY OF REPORTING ISSUERS

It is the responsibility of each reporting issuer to ensure that it has engaged an auditor qualified to file an auditor's report on the issuer's audited financial statements.

Where an issuer files financial statements that have been reported on by an auditor with qualifications that do not satisfy the requirements under the Securities Regulation, the financial statements will not be acceptable to the Superintendent and the issuer will be delinquent in its continuous disclosure filings.


DATED at Vancouver, British Columbia, this 13th day of October 1989.