Guide for the Auditors of Registered Electoral District Associations

Issued by the CICA Elections Task Force

Under amendments made to the Canada Elections Act, which were assented to on June 19, 2003, and effective as of January 1, 2004, federal electoral district associations are permitted to register with Elections Canada. Although registration is not mandatory, unregistered associations can only receive transfers from their registered party. They cannot accept contributions, provide goods or services, or transfer funds to election candidates, the registered party, or another registered association of that party; and they cannot accept funds from a candidate, leadership contestant, or nomination contestant.

Upon registration, a registered electoral district association has to appoint both a financial agent and an auditor. The application for registration must include their consent to so act. Chartered accountants who are considering accepting the appointment as financial agents should refer to the Registered Association Handbook issued by Elections Canada (www.elections.ca), which identifies the eligibility requirements for financial agents, as well as their responsibilities (including a checklist). With respect to the responsibilities of the auditor, the CICA's Elections Task Force has issued a Guide, which is posted on the CICA website at www.cica.ca/index.cfm/ci_id/25636/ la_id/1.htm.

Within five months of the end of a fiscal (calendar) year, the financial agent of the registered association must submit to the Chief Electoral Officer a Financial Transactions Return, which includes a declaration by the financial agent that the information contained in the Return is correct. An audit of the Return is only required if the registered association has, in a fiscal period, accepted contributions or incurred expenses of $5,000 or more in total. In such instances, the auditor is to report to the financial agent on the Financial Transactions Return, and shall, in accordance with generally accepted auditing standards, make any examination that will enable the auditor to give an opinion in the report as to whether it presents fairly the information contained in the financial records on which it is based. If such is not the case, or if it appears that proper accounting records have not been kept, the auditor should indicate that such is the case in the auditor's report.

The Financial Transactions Return comprises four parts: Part 1 comprises a declaration by the financial agent; Part 2 comprises several statements relating to contributions received, for which the legislative requirements are similar to those relating to contributions received by federal election candidates; Part 3 comprises a statement of transfers made by the association and a statement of unpaid claims; and Part 4 comprises the association's financial statements-a Statement of Assets and Liabilities, including any surplus or deficit, and a Statement of Revenues and Expenses, both of which must be prepared in accordance with generally accepted accounting principles (GAAP).

The Guide issued by the CICA's Elections Task Force sets out the eligibility requirements for the auditor; these are identical to those for the auditor of a candidate in a federal election. It also comments on a number of issues that the auditor is likely to face, including but not restricted to: auditor independence and objectivity; audit of opening balances (in the context that audits are only required for certain, and not all, fiscal periods); contributions received (the audit issues are similar to those for the audit of a federal election candidate); and the GAAP requirement for the association's financial statements. Samples of consent, engagement, and representation letters are also included in the Guide, along with an auditor's report that is considered appropriate for this type of engagement.

Staff Contact: Andr�e Lavigne, CA, principal, research studies: andree.lavigne@cica.ca