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OSC Staff Notice 51-718 - Key Considerations Relating to an Auditor's Involvement with Interim Financial Reports


Ontario Securities Commission (OSC) staff recently reviewed a sample of issuers to assess their compliance with the provisions relating to an auditor’s involvement with interim financial reports as set out in subsection 4.3(3) of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102). While NI 51-102 does not require an issuer to engage its auditor to review its interim financial report, it does however require an issuer to disclose in an accompanying notice if an interim review has not been performed by its auditor. We found a significant level of non-compliance with this disclosure requirement and in these cases, issuers were requested to refile their interim financial statements with the required disclosure.

The purpose of this notice is to summarize the results of our review and to clarify the securities law requirements relating to an auditor’s involvement with interim financial reports. As well, we have provided further guidance on the review requirements for an issuer’s first interim financial report prepared following its transition to International Financial Reporting Standards (IFRS). Issuers and their advisors should take this notice into account when assessing the extent to which future disclosure meets the requirements of securities legislation and their investors’ need for transparent disclosure. Investors need to be properly informed about an auditor’s level of involvement with an issuer’s interim financial report given that auditor involvement levels will continue to vary amongst issuers.