Audit Exemption for Ontario Charities
Adam Aptowitzer, October 19, 2006
There seems to be much confusion around the requirements for the auditing of Ontario not-for-profit Corporations. By way of review, a charity can be either incorporated or unincorporated; an organization incorporated under the laws of Ontario would be required by the Corporations Act to arrange for yearly audits of the corporation’s financial statements. On April 27, 2005, the Ontario Provincial Parliament introduced a bill which was intended to change the requirements for the audit of a Not-for-profit corporation’s financial statements. The proposed changes of the first reading of the bill are now irrelevant as the bill received royal assent on June 22, 2006 but the final version did not include any changes to the audit requirements currently listed in the Act. Under the old requirements any not-for-profit corporation with annual income of less than $10,000 and the written consent of all members of the corporation to forgo an audit could legally avoid auditing their financial statements. The exception to the exemption occurred where a corporation was incorporated for a religious, educational, charitiable or public purposes, then there was no choice about auditing. Effectively, this removed the exemption for corporations incorporated in Ontario and registered as charities with the Canada Revenue Agency. If your Charity is concerned about the audit requirements and meeting its obligations, please feel free to contact me at adamapt@drache.ca.
