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Committee for CAs Working with Pension Plans: sample independent auditor’s reports

2012-03-27

On December 20, 2011, the Committee for CAs Working with Pension Plans published an article on the decision of the Régie des rentes du Québec to introduce an accounting framework whereby pension plan administrators subject to the Supplemental Pension Plans Act (Quebec) (the “SPP Act”) can have management prepare a financial report excluding pension obligations for fiscal years ending on or after December 31, 2011.

This accounting framework is now available in Appendix 3(a) of the 2011 Guide to the Annual Information Return issued by the Régie des rentes du Québec (the “AIR Guide”).

Administrators therefore have the following two options:

  1. have pension plan financial statements prepared in accordance with the Canadian accounting standards for pension plans in Part IV of the CICA Handbook – Accounting;
  2. have a pension plan financial report prepared in accordance with the accounting framework for the preparation of a financial report under Section 161 of the SPP Act mentioned in the AIR Guide

The Committee reminds members that regardless of the election made by administrators, the financial statements or financial reports for the fiscal year ended December 31, 2011 must respectively include information about the adoption of the new Canadian accounting standards for pension plans or the framework described in the AIR Guide.

In addition, the Committee suggests that members review the guide available on the Auditing and Assurance Standards Board website entitled Reporting Implications of New Auditing and Accounting Standards (the “Reporting Guide”) which addresses these topics.

The Committee would also like to remind members that there are four possible types of auditor’s report for financial statements and financial reports for the fiscal year ended December 31, 2011. The report to be used depends on the following:

  • the nature of the financial information prepared, whether it is in accordance with the Canadian accounting standards for pension plans for preparing financial statements or the framework for the preparation of a financial report as indicated in the AIR Guide;
  • the audit approach used regarding comparative information, including reference to each period for which financial information is presented (comparative financial statements) or reference to the current period only (corresponding figures).

The table below illustrates both possibilities:

Nature of the financial information prepared Approaches relating to comparative information (See CAS 710)

Reference to each period for which financial information is presented (comparative financial statements)

Reference to the current period only (corresponding figures)

Financial statements prepared in accordance with the Canadian accounting standards for pension plans
(See CAS 700)

See the illustrative report 2(h) in the “Reporting Guide”

See the illustrative report 2(i) in the “Reporting Guide”

Financial report prepared in accordance with the accounting framework for the preparation of a financial report mentioned in the AIR Guide (See CAS 800)

See the illustrative report in the document entitled Pension plan financial report filed with the Régie des rentes du Québec — Auditor’s report refers to each period for which financial information is presented

See the illustrative report in the document entitled Pension plan financial report filed with the Régie des rentes du Québec —Auditor’s report refers to the current period only

Lastly, the Committee reminds members that the independent auditor’s report filed with the Régie des rentes du Québec must always include the financial statements or a financial report covered in the opinion.

The Committee for CAs Working with Pension Plans
 

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