Providing Additional Auditor Reporting for Clients

Last Revision: 3/1/2017

We understand there is a trend by various third parties, including regulators, to request additional reporting by practitioners on certain items or matters as well as the historical financial statements. This highlights that CPAs, as trusted independent professionals, are well positioned to provide clients and third parties with services outside of the traditional offerings of audit, review, or compilation engagements and we expect these requests for certification or some form of “comfort” will only increase.

The various third-party requests often use terminology that does not clearly match with the standards in the CPA Canada Handbook. They include terms such as “certify,” “agree,” “provide comfort,” “affirm,” or “examine”.  In some instances, the terminology is used without clear guidance on what is expected. For example, these requests might call for procedures such as “confirm reporting is in accordance with agreement/regulation” or “examine in accordance with generally accepted auditing standards”.  Previously, the ability to accept these types of engagements was fairly restrictive under guidance related to derivative reporting. Since the adoption of the Canadian Auditing Standards in 2010, evolvement in Canadian assurance standards has provided the flexibility practitioners need to report on a significant array of financial and non-financial information.  

Additional Reporting by Auditors

Auditors of local governments are keenly aware of such requirements as there are two reports which require the auditor’s signature: one related to the Home Owner Grant and another related to compliance with Part 8 of the School Act

When such requests are received, it is the practitioner’s responsibility to ensure the reporting and the work performed, including documentation, are compliant with the requirements of the appropriate CPA Canada Handbook – Assurance standards. Members should consider how they will report when a request is received to sign a form or document which includes the unusual terminology noted above. In BC, we understand a significant portion of the third parties requesting additional information are provincial bodies or provincially regulated organizations. As such, the reports issued will differ based on the type of information and level of assurance each third party is requesting. The table below includes examples of the most common assurance standards being applied to meet reporting requirements of various third parties.

CPA Canada Handbook standard

Example of reports

Section 5815 Audit reports on compliance with agreements, statutes and regulation

Eligible student reporting;
Auditor Certificate for compliance of the municipality with Part 8 of the School Act

Section 9100 Reports on the results of applying specified auditing procedures to financial information other than financial statements

Accountant’s report for Real Estate Council of BC or Law Society of BC

CSRS 4460 Reports on supplementary matters arising from an audit or review engagement

Schedules which have not been audited or reviewed included with financial statements

CAS 805 Audits of single financial statements and specific elements, accounts or items of a financial statement

Common area cost or film tax credit audits;
Home owner grant auditor certificate

CPABC has a project underway to provide practitioners with assistance in identifying the appropriate reporting for various third-party requests and will disseminate the results when completed. In the meantime, call the Advisory Services team at CPABC for a discussion should you be asked to sign any unusual third-party reports.

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