How do audits differ from review engagements under ONCA?

During the annual meeting, members must assign an auditor or an individual to conduct a review engagement. The latter is less extensive and more affordable than an audit. However, certain corporations are exempt from this obligation based on specific criteria. Refer to sections 68 and 76 of ONCA for more information.

Audits are a comprehensive analysis of financial statements and related operations conducted by a qualified individual authorized under the Public Accounting Act of 2004. The primary goal of audits is to instill confidence in external parties such as investors and creditors. To conduct an audit, several requirements must be met, including obtaining reasonable assurance, maintaining independence, assessing control risks, executing various procedures, expressing opinions, and obtaining a management representation letter. For more information, refer to section 69 of ONCA.

On the other hand, reviews offer a more limited level of assurance, ensuring that financial statements comply with applicable accounting standards. They aim to provide a basic level of confidence regarding the accuracy of financial statements. To perform a review, one must obtain limited assurance, maintain independence, execute fewer procedures than audits, provide a conclusion, and secure a management representation letter.

The individual tasked with conducting either an audit or a review engagement must generate a financial report for the corporation. Subsequently, the directors are required to present this report to the members during each annual meeting. For more information, refer to sections 78 and 84 of ONCA.

From a cost perspective, reviews are generally more economical than audits.

Feel free to seek expert guidance if you need help navigating the complex world of ONCA financial reviews and audits. Seek personalized advice tailored to your organization's needs. Consult with our Charity lawyers today to take the proactive step towards seamless financial governance.

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