OSC Staff Notice of Approval – Housekeeping Amendments to Form 1 to Adopt CAS for the Audits of Regulatory Financial Statements – Investment Industry Regulatory Organization of Canada (IIROC)
The Ontario Securities Commission approved the IIROC's housekeeping amendments to Form 1 to adopt CAS for the audits of regulatory financial statements. The Alberta Securities Commission, the Autorité des marches financiers, the Newfoundland and Labrador Securities Division, the New Brunswick Securities Commission, the Nova Scotia Securities Commission and the Saskatchewan Financial Services Commission also approved the amendments. The British Columbia Securities Commission did not object to the amendments.
The objective of the amendments is to amend the sample auditors' reports that are used in the filing of both current CGAAP-based and IFRS-based versions of Form 1. These amendments result in the replacement of the former Part I and Part II auditors' reports with two new auditors' reports that are in compliance with the new CAS which came into effect for audits of financial statements for periods ending on or after December 14, 2010.
A copy of the IIROC Notice is attached as Appendix A, including the amended Forms.
Appendix A
IIROC NOTICE 11-0064
RULES NOTICE
NOTICE OF APPROVAL / IMPLEMENTATION
AMENDMENTS TO FORM 1 TO ADOPT CANADIAN AUDITING STANDARDS (CAS) FOR THE AUDITS OF REGULATORY FINANCIAL STATEMENTS
Amendments to Form 1 to adopt CAS for the audits of regulatory financial statements
On January 27, 2011, the Board of Directors (the Board) of the Investment Industry Regulatory Organization of Canada (IIROC) approved the housekeeping amendments to Form 1 to adopt Canadian Auditing Standards (CAS) for the audits of regulatory financial statements (prepared under both the current CGAAP-based Form 1 and the proposed IFRS-based Form 1). The housekeeping amendments are to the sample auditors' reports to be used in the filing of both current CGAAP-based and proposed IFRS-based versions of Form 1 and are effective for periods ending on or after December 14, 2010.
Summary of the nature and purpose of the amendments
Canada adopted the CASs for the audits of financial statements and other historical financial information for periods ending on or after December 14, 2010. The CASs are now effective in Canada and are Canadian generally accepted auditing standards. In order to adopt the CASs for the purposes of auditor reporting to IIROC on Dealer Member Form 1 filings, the Canadian Institute of Chartered Accountants (CICA) and the Broker Auditor Committee revised the Form 1 auditor's reports in the fall of 2010. These reports are adopted by IIROC as a "housekeeping" rule proposal. IIROC staff have classified the amendments as "housekeeping" in nature as the amendments:
• while material to the auditing profession, do not represent material change to the scope or quality of the opinion that IIROC will be provided by the auditors;
• have no material impact on investors, issuers, Dealer Members or the capital markets in any province or territory of Canada; and
• are reasonably necessary to ensure IIROC Rules conform to applicable securities legislation, statutory or legal requirements.
These amendments result in the replacement of the former Part I and Part II auditors' reports with two new auditor's reports that are in compliance with CAS.
For the CGAAP-based Form 1, the first auditor's report will provide the auditor's opinion on Statements A, E and F - the balance sheet, the income statement and the changes in equity. The second auditor's report will provide the auditor's opinion on Statements B, C, D and G - the regulatory reports covering risk adjusted capital (RAC), early warning excess (EWE) and early warning reserve (EWR), the free credit segregation amount and subordinated loans. As the Schedules are an integral part of the Statements, the auditor's reports will encompass these Schedules by references from the Statements.
For the IFRS-based Form 1, the first auditor's report will provide the auditor's opinion on Statements A, E and F - the balance sheet, the income statement and the changes in equity. The second auditor's report will provide the auditor's opinion on Statements B, C and D - the regulatory reports covering risk adjusted capital (RAC), early warning excess (EWE) and early warning reserve (EWR) and the free credit segregation amount. As the Schedules are an integral part of the Statements, the auditor's reports will encompass these Schedules by references from the Statements.
The housekeeping amendments to the current CGAAP-based Form 1 and the proposed IFRS-based Form 1 are set out in Attachment A and Attachment B, and a black-line copy of each is set out in Attachment C and Attachment D.
Attachment A
INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA
AMENDMENTS TO FORM 1 TO ADOPT CAS FOR THE AUDITS OF REGULATORY FINANCIAL STATEMENTS
PROPOSED AMENDMENTS (HOUSEKEEPING)
1. Part I -- Auditors' Report of Form 1 and Part II -- Auditors' Report of the current CGAAP-based Form 1 are amended by repealing and replacing it with the attached.
FORM 1 -- INDEPENDENT AUDITOR'S REPORT FOR STATEMENTS A, E AND F
To: Investment Industry Regulatory Organization of Canada and Canadian Investor Protection Fund
We have audited the accompanying Statements of ____________________ (Dealer Member), which comprise of:
Statement A - Statement of assets and of liabilities and shareholder/partner capital as at _______________ (date) and _______________ (date) Statement E - Summary statement of income for the years ended _______________ (date) and _______________ (date) Statement F - Statement of changes in capital and retained earnings (corporations) or undivided profits (partnerships) for the year ended _______________ (date)
and a summary of significant accounting policies and other explanatory information. These Statements have been prepared by management based on the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
Management's responsibility for the Statements
Management is responsible for the preparation and fair presentation of these Statements in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada and for such internal control as management determines is necessary to enable the preparation of Statements that are free from material misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on these Statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Dealer Member's preparation and fair presentation of the Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Dealer Member's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the Statements present fairly, in all material respects, the financial position of _______________ (Dealer Member) as at _______________ (date) and _______________ (date) and the results of its operations for the years then ended in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
Going Concern
[Note: SIRFF to allow for auditor to include emphasis of matter paragraph for Going concern -- this is an option for auditors but not part of the standard report]
Without modifying our opinion, we draw attention to Note __________ (note) in the Statements which indicates that ____________________ (Dealer Member) incurred a net loss of ____________________ ($ amount) during the year ended ____________________ (date) and, as of that date, ____________________ (Dealer Member's) current liabilities exceeded its total assets by ____________________ ($ amount). These conditions, along with other matters as set forth in Note __________ (note), indicate the existence of a material uncertainty that may cast significant doubt about ____________________ ability to continue as a going concern.
____________________ (Dealer Member's)
Basis of Accounting and Restriction on Use
Without modifying our opinion, we draw attention to Note __________ (note) to the Statements which describes the basis of accounting. The Statements are prepared to assist ____________________ (Dealer Member) to meet the requirements of the Investment Industry Regulatory Organization of Canada. As a result, the Statements may not be suitable for another purpose. Our report is intended solely for ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund and should not be used by parties other than ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund.
[Note: SIRFF to allow for auditor to include other potential Emphasis of Matter and Other Matter paragraphs should one be required under the CASs or determined appropriate by the auditor to be included in the auditor's report. Such wording would be agreed upon with the Corporation prior to the filing of Form 1.]
Unaudited Information
We have not audited the information in Schedules 13 and 15 of Part II of Form 1 and accordingly do not express an opinion on these schedules.
| ____________________ | |
(Audit Firm) | |
| ____________________ | |
(signature) | |
| ____________________ | |
(date) | |
| ____________________ | |
(address) | |
FORM 1 -- INDEPENDENT AUDITOR'S REPORT FOR STATEMENTS B, C, D AND G
To: Investment Industry Regulatory Organization of Canada and Canadian Investor Protection Fund
We have audited the accompanying Statements of Form 1 (the "Statements") of ____________________ (Dealer Member), which comprise of:
Statement B - Statement of net allowable assets and risk adjusted capital as at ____________________ (date) and ____________________ (date) Statement C - Statement of early warning excess and early warning reserve as at ____________________ (date) Statement D - Statement of free credit segregation amount as at ____________________ (date) Statement G - Statement of changes in subordinated loans for the year ended ____________________ (date)
These Statements have been prepared by management based on the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
Management's Responsibility for the Statements
Management is responsible for the preparation of the Statements of Form 1 in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada, and for such internal control as management determines is necessary to enable the preparation of Statements that are free from material misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on the Statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Dealer Member's preparation of the Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Dealer Member's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our audit opinion.
Opinion
In our opinion, the financial information in Statement B as at ____________________ (date) and ____________________ (date), Statements C and D as at ____________________ (date) and in Statement G for the year ended ____________________ (date) is prepared, in all material respects, in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
FORM 1 -- INDEPENDENT AUDITOR'S REPORT FOR STATEMENTS B, C, D AND G
Basis of Accounting and Restriction on Use
Without modifying our opinion, we draw attention to Note __________ (note) to the Statements which describes the basis of accounting. The Statements are prepared to assist ____________________ (Dealer Member) to meet the requirements of the Investment Industry Regulatory Organization of Canada. As a result, the Statements may not be suitable for another purpose. Our report is intended solely for ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund and should not be used by parties other than ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund.
| ____________________ | |
(Audit Firm) | |
| ____________________ | |
(signature) | |
| ____________________ | |
(date) | |
| ____________________ | |
(address) | |
FORM 1 -- INDEPENDENT AUDITOR'S REPORTS
NOTES AND INSTRUCTIONS
A measure of uniformity in the form of the auditor's reports is desirable in order to facilitate identification of circumstances where the underlying conditions are different. Therefore, when auditors are able to express an unqualified opinion, their reports should take the form of the auditor's reports shown above.
Alternate forms of Auditor's Reports are available online from within the web-based Securities Industry Regulatory Financial Filings system (SIRFF).
Any limitations in the scope of the audit must be discussed in advance with the Corporation. Discretionary scope limitations will not be accepted. Any other potential emphasis of matter and other matter paragraphs in the auditor's reports must be discussed in advance with the Corporation.
One copy of the auditor's reports with original signatures must be provided to the Corporation and another copy with original signatures must be provided to CIPF.
Attachment B
INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA
AMENDMENTS TO FORM 1 TO ADOPT CAS FOR THE AUDITS OF REGULATORY FINANCIAL STATEMENTS
PROPOSED AMENDMENTS (HOUSEKEEPING)
1. The auditor's reports for the proposed IFRS-based Form 1 are adopted as attached.
FORM 1 -- INDEPENDENT AUDITOR'S REPORT FOR STATEMENTS A, E AND F
To: Investment Industry Regulatory Organization of Canada and Canadian Investor Protection Fund
We have audited the accompanying Statements of ____________________ (Dealer Member), which comprise the statement of financial position (Statement A) as at ____________________ (date) and the statement of income and comprehensive Income (Statement E) and statement of changes in capital and retained earnings (Statement F) for the year then ended ____________________ (date) and a summary of significant accounting policies and other explanatory information. These Statements have been prepared by management based on the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
Management's responsibility for the Statements
Management is responsible for the preparation and fair presentation of these Statements in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada and for such internal control as management determines is necessary to enable the preparation of Statements that are free from material misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on these Statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Dealer Member's preparation and fair presentation of the Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Dealer Member's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the Statements present fairly, in all material respects, the financial position of ____________________ (Dealer Member) as at ____________________ (date) and the results of its operations for the year then ended in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
Going Concern
[Note: SIRFF to allow for auditor to include emphasis of matter paragraph for Going concern -- this is an option for auditors but not part of the standard report]
Without modifying our opinion, we draw attention to Note __________ (note) in the Statements which indicates that ____________________ (Dealer Member) incurred a net loss of ____________________ ($ amount) during the year ended ____________________ (date) and, as of that date, ____________________ (Dealer Member's) current liabilities exceeded its total assets by ____________________ ($ amount). These conditions, along with other matters as set forth in Note ____________________ (note), indicate the existence of a material uncertainty that may cast significant doubt about ____________________ (Dealer Member's) ability to continue as a going concern.
Basis of Accounting and Restriction on Use
Without modifying our opinion, we draw attention to Note __________ (note) to the Statements which describes the basis of accounting. The Statements are prepared to assist ____________________ (Dealer Member) to meet the requirements of the Investment Industry Regulatory Organization of Canada. As a result, the Statements may not be suitable for another purpose. Our report is intended solely for ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund and should not be used by parties other than ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund.
[Note: SIRFF to allow for auditor to include other potential Emphasis of Matter and Other Matter paragraphs should one be required under the CASs or determined appropriate by the auditor to be included in the auditor's report. Such wording would be agreed upon with the Corporation prior to the filing of Form 1.]
Unaudited Information
We have not audited the information in Schedules 13 and 15 of Part II of Form 1 and accordingly do not express an opinion on these schedules.
| ____________________ | |
(Audit Firm) | |
| ____________________ | |
(signature) | |
| ____________________ | |
(date) | |
| ____________________ | |
(address) | |
FORM 1 -- INDEPENDENT AUDITOR'S REPORT FOR STATEMENTS B, C AND D
To: Investment Industry Regulatory Organization of Canada and Canadian Investor Protection Fund
We have audited the accompanying Statements of Form 1(the "Statements") of ____________________ (Dealer Member) as at ____________________ (date):
Statement B -- Statement of Net Allowable Assets and Risk Adjusted Capital
Statement C -- Statement of Early Warning Excess and Early Warning Reserve
Statement D -- Statement of Free Credit Segregation Amount
These Statements have been prepared by management based on the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
Management's Responsibility for the Statements
Management is responsible for the preparation of the Statements of Form 1 in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada, and for such internal control as management determines is necessary to enable the preparation of Statements that are free from material misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on the Statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Dealer Member's preparation of the Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Dealer Member's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our audit opinion.
Opinion
In our opinion, the financial information in Statements B, C and D of Form 1 as at ____(year end)___ is prepared, in all material respects, in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
FORM 1 -- INDEPENDENT AUDITOR'S REPORT FOR STATEMENTS B, C AND D
Basis of Accounting and Restriction on Use
Without modifying our opinion, we draw attention to Note __________ (note) to the Statements which describes the basis of accounting. The Statements are prepared to assist ____________________ (Dealer Member) to meet the requirements of the Investment Industry Regulatory Organization of Canada. As a result, the Statements may not be suitable for another purpose. Our report is intended solely for ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund and should not be used by parties other than ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund.
| ____________________ | |
(Audit Firm) | |
| ____________________ | |
(signature) | |
| ____________________ | |
(date) | |
| ____________________ | |
(address) | |
FORM 1 -- INDEPENDENT AUDITOR'S REPORTS
NOTES AND INSTRUCTIONS
A measure of uniformity in the form of the auditor's reports is desirable in order to facilitate identification of circumstances where the underlying conditions are different. Therefore, when auditors are able to express an unqualified opinion, their reports should take the form of the auditor's reports shown above.
Alternate forms of Auditor's Reports are available online from within the web-based Securities Industry Regulatory Financial Filings system (SIRFF).
Any limitations in the scope of the audit must be discussed in advance with the Corporation. Discretionary scope limitations will not be accepted. Any other potential emphasis of matter and other matter paragraphs in the auditor's reports must be discussed in advance with the Corporation.
One copy of the auditor's reports with original signatures must be provided to the Corporation and another copy with original signatures must be provided to CIPF.
Attachment C
INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA
AMENDMENTS TO FORM 1 TO ADOPT CAS FOR THE AUDITS OF REGULATORY FINANCIAL STATEMENTS
BLACK-LINE COPY OF PROPOSED AMENDMENTS TO CGAAP-BASED FORM 1
JOINT REGULATORY FINANCIAL QUESTIONNAIRE AND REPORT
PART I -- AUDITORS' REPORT FORM 1 -- INDEPENDENT AUDITOR'S REPORT FOR STATEMENTS A, E AND F
TO: The ____________________ (applicable regulatory body) and the Canadian Investor Protection Fund.
We have audited the following Part I financial statements of ____________________ (firm):
These financial statements have been prepared for the purpose of complying with the regulations, bylaws and policies of
To: Investment Industry Regulatory Organization of Canada and Canadian Investor Protection Fund
We have audited the accompanying Statements of ____________________ (Dealer Member), which comprise of:
Statement A - Statement of assets and of liabilities and shareholder/partner capital as at ____________________ (date) and ____________________ (date) Statement E - Summary statement of income for the years ended ____________________ (date) and ____________________ (date) Statement F - Statement of changes in capital and retained earnings (corporations) or undivided profits (partnerships) for the year ended ____________________ (date)
and a summary of significant accounting policies and other explanatory information. These Statements have been prepared by management based on the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
Management's responsibility for the Statements
Management is responsible for the preparation and fair presentation of these Statements in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada and for such internal control as management determines is necessary to enable the preparation of Statements that are free from material misstatement, whether due to fraud or error.
Auditor's responsibility
the ____________________. These financial statements are the responsibility of the ____________________ (applicable regulatory body) Company's management.
Our responsibility is to express an opinion on these financialstatementsthese Statements based on our audits.audit. We conducted our auditsaudit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform anthe audit to obtain reasonable assurance about whether the financial statementsStatements are free offrom material misstatement.
An audit includes examining, on a test basis,involves performing procedures to obtain audit evidence supportingabout the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significantStatements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Dealer Member's preparation and fair presentation of the Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Dealer Member's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall financial statement presentation. presentation of the Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion,
(a) The statements of assets and of liabilities and shareholders/partner capital and the summary statements of income present fairly, in all material respects, the financial position of the Company as at _________________________(date)and _________________________(date)and the results of its operations for the years then ended in accordance with the basis of accounting disclosed in Note 2 to the financial statements.
(b) The statements of net allowable assets and risk adjusted capital as at _________________________(date)and _________________________(date)and the statements of early warning excess and early warning reserve, free credit segregation amount, changes in capital and retained earnings (corporations) or undivided profits (partnerships), and changes in subordinated loans, either as at or for the year ended __________(date)are presented fairly, in all material respects, in accordance with the applicable instructions of the _________________________(applicable regulatory body).
These financial statements, which have not been, and were not intended to be, prepared in accordance with Canadian generally accepted accounting principles, are solely for the information and use of the Company, the ____________________ (applicable regulatory body) and the Canadian Investor Protection Fund to comply with the rules of the ____________________ (applicable regulatory body). The financial statements are not intended to be and should not be used by anyone other than the specified users or for any other purpose.
| _________________________ | _________________________ |
| _________________________ | _________________________ |
In our opinion, the Statements present fairly, in all material respects, the financial position of ____________________ (Dealer Member) as at ____________________ (date) and ____________________ (date) and the results of its operations for the years then ended in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
Going Concern
[Note: SIRFF to allow for auditor to include emphasis of matter paragraph for Going concern -- this is an option for auditors but not part of the standard report]
Without modifying our opinion, we draw attention to Note __________ (note) in the Statements which indicates that ____________________ (Dealer Member) incurred a net loss of ____________________ ($ amount) during the year ended ____________________ (date) and, as of that date, ____________________ (Dealer Member's) current liabilities exceeded its total assets by ____________________ ($ amount). These conditions, along with other matters as set forth in Note __________ (note), indicate the existence of a material uncertainty that may cast significant doubt about ____________________ (Dealer Member's) ability to continue as a going concern.
Basis of Accounting and Restriction on Use
Without modifying our opinion, we draw attention to Note __________ (note) to the Statements which describes the basis of accounting. The Statements are prepared to assist ____________________ (Dealer Member) to meet the requirements of the Investment Industry Regulatory Organization of Canada. As a result, the Statements may not be suitable for another purpose. Our report is intended solely for ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund and should not be used by parties other than ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund.
[Note: SIRFF to allow for auditor to include other potential Emphasis of Matter and Other Matter paragraphs should one be required under the CASs or determined appropriate by the auditor to be included in the auditor's report. Such wording would be agreed upon with the Corporation prior to the filing of Form 1.]
Unaudited Information
We have not audited the information in Schedules 13 and 15 of Part II of Form 1 and accordingly do not express an opinion on these schedules.
| _________________________ | |
(Audit Firm) | |
| _________________________ | |
(signature) | |
| _________________________ | |
(date) | |
| _________________________ | |
(address) | |
FORM 1 -- INDEPENDENT AUDITOR'S REPORT FOR STATEMENTS B, C, D AND G
To: Investment Industry Regulatory Organization of Canada and Canadian Investor Protection Fund
We have audited the accompanying Statements of Form 1 (the "Statements") of ____________________ (Dealer Member), which comprise of:
Statement B - Statement of net allowable assets and risk adjusted capital as at ____________________ (date) and ____________________ (date) Statement C - Statement of early warning excess and early warning reserve as at ____________________ (date) Statement D - Statement of free credit segregation amount as at ____________________ (date) Statement G - Statement of changes in subordinated loans for the year ended ____________________ (date)
These Statements have been prepared by management based on the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
Management's Responsibility for the Statements
Management is responsible for the preparation of the Statements of Form 1 in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada, and for such internal control as management determines is necessary to enable the preparation of Statements that are free from material misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on the Statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Dealer Member's preparation of the Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Dealer Member's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our audit opinion.
Opinion
In our opinion, the financial information in Statement B as at ____________________ (date) and ____________________ (date), Statements C and D as at ____________________ (date) and in Statement G for the year ended ____________________ (date) is prepared, in all material respects, in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
FORM 1 -- INDEPENDENT AUDITOR'S REPORT FOR STATEMENTS B, C, D AND G
Basis of Accounting and Restriction on Use
Without modifying our opinion, we draw attention to Note __________ (note) to the Statements which describes the basis of accounting. The Statements are prepared to assist ____________________ (Dealer Member) to meet the requirements of the Investment Industry Regulatory Organization of Canada. As a result, the Statements may not be suitable for another purpose. Our report is intended solely for ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund and should not be used by parties other than ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund.
| ____________________ | |
| (Audit Firm) | |
| ____________________ | |
| (signature) | |
| ____________________ | |
| (date) | |
| ____________________ | |
| (address) | |
PART IFORM 1 -- INDEPENDENT AUDITOR'S REPORTREPORTS
NOTES AND INSTRUCTIONS
A measure of uniformity in the form of the auditor's ' reportreports is desirable in order to facilitate identification of circumstances where the underlying conditions are different. Therefore, when auditors are able to express an unqualified opinion, their reportreports should take the form of the auditor's ' reportreports shown above.
Alternate forms of Auditor's ' Reports are available either online from within the web-based Securities Industry Regulatory Financial Filings system (SIRFF) or from the Joint Regulatory Body with primary audit jurisdiction.
Any limitations in the scope of the audit must be discussed in advance with the appropriate regulatory authority. Corporation. Discretionary scope limitations will not be accepted. Any other potential emphasis of matter and other matter paragraphs in the auditor's reports must be discussed in advance with the Corporation.
Copies
One copy of the auditor's reports with original signatures must be provided to the Joint Regulatory Body with primary audit jurisdiction. Corporation and another copy with original signatures must be provided to CIPF.
JOINT REGULATORY FINANCIAL QUESTIONNAIRE AND REPORT
PART II -- AUDITORS' REPORT
TO: ____________________ (applicable regulatory body) and the Canadian Investor Protection Fund. We have audited Part I of the Joint Regulatory Financial Questionnaire and Report (Part I -- JRFQR) of ____________________ (firm) as at ____________________ (date) and for the year then ended, and reported thereon as of ____________________ (date).
The additional information set out in Part II of the Joint Regulatory Financial Questionnaire and Report -- Schedules 1 to 14 (Part II -- JRFQR) have been subjected to the procedures applied in the audit of Part I -- JRFQR and in our opinion, presents fairly the information contained therein, in all material respects, in relation to Part I -- JRFQR taken as a whole.
No procedures have been carried out in addition to those necessary to form an opinion on Part I -- JRFQR.
The additional information set out in Part II -- JRFQR, which has not been, and was not intended to be, prepared in accordance with Canadian generally accepted accounting principles, is solely for the information and use of the Member, the Investment Dealers Association and the Canadian Investor Protection Fund to comply with the regulations, bylaws and policies of the Investment Dealers Association. The additional information set out in Part II -- JRFQR is not intended to be and should not be used by anyone other than these specified users or for any other purpose.
| ____________________ | ____________________ |
| ____________________ | ____________________ |
NOTES:
A measure of uniformity in the form of the auditors' report is desirable in order to facilitate identification of circumstances where the underlying conditions are different. Therefore, when auditors are able to express an unqualified opinion, their report should take the above form.
Any limitations in the scope of the audit must be discussed in advance with the appropriate regulatory authority. Discretionary scope limitations will not be accepted.
Copies with original signatures must be provided to the Joint Regulatory Body with primary audit jurisdiction.
Attachment D
INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA
AMENDMENTS TO FORM 1 TO ADOPT CAS FOR THE AUDITS OF REGULATORY FINANCIAL STATEMENTS
BLACK-LINE COPY OF PROPOSED AMENDMENTS TO IFRS-BASED FORM 1
JOINT REGULATORY FINANCIAL QUESTIONNAIRE AND REPORT
PART I -- AUDITORS' REPORT FORM 1 -- INDEPENDENT AUDITOR'S REPORT FOR STATEMENTS A, E AND F
TO: The ____________________ (applicable regulatory body) and the Canadian Investor Protection Fund. We have audited the following Part I financial statements of ____________________ (firm):
These financial statements have been prepared for the purpose of complying with the regulations, bylaws and policies of
To: Investment Industry Regulatory Organization of Canada and Canadian Investor Protection Fund
We have audited the accompanying Statements of ____________________ (Dealer Member), which comprise the statement of financial position (Statement A) as at ____________________ (date) and the statement of income (Statement E) and statement of changes in capital and retained earnings (Statement F) for the year then ended ____________________ (date) and a summary of significant accounting policies and other explanatory information. These Statements have been prepared by management based on the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
Management's responsibility for the Statements
Management is responsible for the preparation and fair presentation of these Statements in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada and for such internal control as management determines is necessary to enable the preparation of Statements that are free from material misstatement, whether due to fraud or error.
Auditor's responsibility
the ____________________ (applicable regulatory body). These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financialstatementsthese Statements based on our audits.audit. We conducted our auditsaudit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform anthe audit to obtain reasonable assurance about whether the financial statementsStatements are free offrom material misstatement.
An audit includes examining, on a test basis, involves performing procedures to obtain audit evidence supportingabout the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significantStatements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Dealer Member's preparation and fair presentation of the Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Dealer Member's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall financial statement presentation.presentation of the Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion,
(a) The statements of assets and of liabilities and shareholders/partner capital and the summary statements of income present fairly, in all material respects, the financial position of the Company as at____________________(date)and____________________(date)and the results of its operations for the years then ended in accordance with the basis of accounting disclosed in Note 2 to the financial statements.
(b) The statements of net allowable assets and risk adjusted capital as at____________________(date)and____________________(date)and the statements of early warning excess and early warning reserve, free credit segregation amount, changes in capital and retained earnings (corporations) or undivided profits (partnerships), and changes in subordinated loans, either as at or for the year ended____________________(date)are presented fairly, in all material respects, in accordance with the applicable instructions of the____________________(applicable regulatory body).
These financial statements, which have not been, and were not intended to be, prepared in accordance with Canadian generally accepted accounting principles, are solely for the information and use of the Company, the ____________________ (applicable regulatory body) and the Canadian Investor Protection Fund to comply with the rules of the ____________________ (applicable regulatory body). The financial statements are not intended to be and should not be used by anyone other than the specified users or for any other purpose.
| ____________________ | ____________________ |
| ____________________ | ____________________ |
In our opinion, the Statements present fairly, in all material respects, the financial position of ____________________ (Dealer Member) as at ____________________ (date) and the results of its operations for the year then ended in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
Going Concern
[Note: SIRFF to allow for auditor to include emphasis of matter paragraph for Going concern -- this is an option for auditors but not part of the standard report]
Without modifying our opinion, we draw attention to Note ____________________ (note) in the Statements which indicates that ____________________ (Dealer Member) incurred a net loss of ____________________ ($ amount) during the year ended ____________________ (date) and, as of that date, ____________________ (Dealer Member's) current liabilities exceeded its total assets by ____________________ ($ amount). These conditions, along with other matters as set forth in Note ____________________ (note), indicate the existence of a material uncertainty that may cast significant doubt about ____________________ (Dealer Member's) ability to continue as a going concern.
Basis of Accounting and Restriction on Use
Without modifying our opinion, we draw attention to Note ____________________ (note) to the Statements which describes the basis of accounting. The Statements are prepared to assist ____________________ (Dealer Member) to meet the requirements of the Investment Industry Regulatory Organization of Canada. As a result, the Statements may not be suitable for another purpose. Our report is intended solely for ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund and should not be used by parties other than ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund.
[Note: SIRFF to allow for auditor to include other potential Emphasis of Matter and Other Matter paragraphs should one be required under the CASs or determined appropriate by the auditor to be included in the auditor's report. Such wording would be agreed upon with the Corporation prior to the filing of Form 1.]
Unaudited Information
We have not audited the information in Schedules 13 and 15 of Part II of Form 1 and accordingly do not express an opinion on these schedules.
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(Audit Firm) | |
| ____________________ | |
(signature) | |
| ____________________ | |
(date) | |
| ____________________ | |
(address) | |
FORM 1 -- INDEPENDENT AUDITOR'S REPORT FOR STATEMENTS B, C AND D
To: Investment Industry Regulatory Organization of Canada and Canadian Investor Protection Fund
We have audited the accompanying Statements of Form 1(the "Statements") of ____________________ (Dealer Member) as at ____________________ (date):
Statement B -- Statement of Net Allowable Assets and Risk Adjusted Capital
Statement C -- Statement of Early Warning Excess and Early Warning Reserve
Statement D -- Statement of Free Credit Segregation Amount
These Statements have been prepared by management based on the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
Management's Responsibility for the Statements
Management is responsible for the preparation of the Statements of Form 1 in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada, and for such internal control as management determines is necessary to enable the preparation of Statements that are free from material misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on the Statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Dealer Member's preparation of the Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Dealer Member's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our audit opinion.
Opinion
In our opinion, the financial information in Statements B, C and D of Form 1 as at ____(year end)___ is prepared, in all material respects, in accordance with the financial reporting provisions of the Notes and Instructions to Form 1 prescribed by the Investment Industry Regulatory Organization of Canada.
FORM 1 -- INDEPENDENT AUDITOR'S REPORT FOR STATEMENTS B, C AND D
Basis of Accounting and Restriction on Use
Without modifying our opinion, we draw attention to Note ____________________ (note) to the Statements which describes the basis of accounting. The Statements are prepared to assist ____________________ (Dealer Member) to meet the requirements of the Investment Industry Regulatory Organization of Canada. As a result, the Statements may not be suitable for another purpose. Our report is intended solely for ____________________ (Dealer Member), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund and should not be used by parties other than ____________________ (Dealer Membr), the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund.
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(Audit Firm) | |
| ____________________ | |
(signature) | |
| ____________________ | |
(date) | |
| ____________________ | |
(address) | |
PART I FORM 1 -- INDEPENDENT AUDITOR'S' REPORTREPORTS
NOTES AND INSTRUCTIONS
A measure of uniformity in the form of the auditor's' reportreports is desirable in order to facilitate identification of circumstances where the underlying conditions are different. Therefore, when auditors are able to express an unqualified opinion, their reportreports should take the form of the auditor's ' reportreports shown above.
Alternate forms of Auditor's ' Reports are available either online from within the web-based Securities Industry Regulatory Financial Filings system (SIRFF) or from the Joint Regulatory Body with primary audit jurisdiction.
Any limitations in the scope of the audit must be discussed in advance with the appropriate regulatory authority. Corporation. Discretionary scope limitations will not be accepted. Any other potential emphasis of matter and other matter paragraphs in the auditor's reports must be discussed in advance with the Corporation.
Copies
One copy of the auditor's reports with original signatures must be provided to the Joint Regulatory Body with primary audit jurisdiction.Corporation and another copy with original signatures must be provided to CIPF.