Q: Since my MD&A is filed with my financial statements, do my auditors have to review my MD&A before I file it?
A: NI 51-102 does not include a direct requirement for MD&A to be reviewed by an issuer’s auditor. However, under CICA Handbook section 7500 Auditor association with annual reports, interim reports and other public documents, an auditor is deemed to be associated with MD&A corresponding to annual financial statements on which the auditor has issued an auditor’s report. Also, an auditor is deemed to be associated with interim MD&A if the auditor has been engaged to audit or review the corresponding interim financial statements.
If an auditor is deemed to be associated with MD&A, the auditor must perform the procedures specified in section 7500 of the Handbook. The auditor’s specific aims when performing those procedures are to: (a) determine whether the financial statements, and when applicable, the report of the auditor, have been accurately reproduced; and (b) consider whether any of the other information in the document raises questions regarding, or appears to be otherwise inconsistent with, the financial statements.
Handbook section 7500 specifies that the auditor should arrange to obtain the MD&A prior to its release and perform the procedures set out in the section. Further, when circumstances prevent the auditor from obtaining the MD&A prior to its release, the auditor should perform the procedures required by Handbook as soon as possible after its release, and consider advising the audit committee of the circumstances.
If the reporting issuer’s annual financial statements are audited in accordance with auditing standards other than Canadian GAAS, then the auditor’s association with, and the requirement for procedures relating to, annual and interim MD&A would be determined by those other auditing standards.