Does your Condominium Corporation need to have an independent audit?
The short answer –
Every condominium corporation having 25 or more units (or parcels of tied land) is required to appoint an auditor to obtain annual audited financial statements for the corporation.
The Law –
The Condominium Act, 1998 (the “Act”) requires every condominium corporation to undergo an annual financial audit unless (sec 60 (5)) in a situation where the condominium has fewer than 25 units or parcels of tied land, turn-over meeting has been held and all of the owners consent in writing as at the date of the relevant annual general meeting to dispense with the audit requirement.
The auditor shall, every year, make the examination that is necessary in order to make an annual report on the financial statements to the corporation on behalf of the owners.The audited financial statements and auditor’s report are prepared after the end of that year. The auditor shall present the auditor’s report to the audit committee described in subsection 68 (1) or to the board if there is no audit committee. The board shall approve the financial statements before placing them before an annual general meeting – subsection 66 (3).
An auditor must be a licensed public accountant under the Public Accountants Act. He or she cannot be a director, officer, employee or manager of the corporation and cannot have an interest in any contract to which the corporation is a party. The auditor also cannot be a partner, employer or employee of a person who is disqualified for any of the foregoing reasons.
Amongst other things, the auditor’s report is to include such statements as the auditor deems necessary to demonstrate that the condominium corporation’s financial statements are not done in accordance with the Act. The report must also indicate whether the reserve fund is being managed and maintained in accordance with the reserve fund study.
Please contact us to to help you with your compliance and assurance (Audit) requirements