Use of the External Auditor for Non-Audit Services Policy

Purpose

The purpose of this policy is to outline the principles and parameters under which the external auditor can be engaged for non-audit services, in particular establishing responsibility for ensuring that the objectivity and independence of the external auditor is maintained while providing non-audit services.

Definitions

For the purposes of this policy the following definitions apply:

“Non-Audit Services” means services for which an external audit opinion is not issued and for which an additional fee is charged by the audit firm.

“Pre-Approved Services” means a list of Non-Audit Services that the University’s external auditor can provide without further approval from the Audit Committee.

Scope and authority

This policy applies to all situations where the external auditor is retained to perform Non-Audit Services.  

The Vice-President, Administration, or successor thereof, is the Policy Owner and is responsible for overseeing the administration and interpretation of this Policy.

Policy

General

1. The University will not engage its external auditor to carry out any prohibited services as determined by the Chartered Professional Accountants of Canada.
2. The external auditor is required to comply with auditor independence rules as set out in the Rules of Professional Conduct of the Chartered Professional Accountants of Ontario, as amended from time to time.
3. The external auditor may refuse any engagement for Non-Audit Services deemed to be an infringement on its independence without negative consequence.
4. The Audit and Finance Committee is responsible for reviewing the independence and scope of services for the external auditor.

Approval of Non-Audit Services

1. The Audit and Finance Committee has the authority to approve the engagement of the external auditor for Non-Audit Services.
2. The Audit and Finance Committee may delegate authority to the Vice-President, Administration to engage the external auditor for Pre-Approved Services  up to fifteen percent (15%) of the annual contract value for the external auditor.
3. The aggregate value of Non-Audit Services performed by the external auditor may not represent more than fifteen percent (15%) of the total contract value for the external auditor.  

Reporting

1. The Chief Financial Officer is responsible for providing an annual report to the Audit and Finance Committee detailing the payments made to the external auditor for Non-Audit Services.
2. The Audit and Finance Committee of the Board of Governors is responsible for reporting to the Board, on an annual basis, all Non-Audit Services that are provided by the external auditor.

Pre-Approved Services

1. The Audit and Finance Committee will approve and maintain a list of Pre-Approved Services that may be completed by the external auditor.  The list of Pre-Approved Services will be included as an Appendix to this policy.
2. The Audit and Finance Committee will review and update the list of Pre-Approved Services on an annual basis.  

Monitoring and review

This policy will be reviewed as necessary and at least every three years. The Audit and Finance Committee, or successor thereof, is responsible to monitor and review this Policy.

Relevant legislation

Chartered Accountants Act, 2010, S.O. 2010, Chapter 6, Schedule C

Related policies, procedures & documents

Rules of Professional Conduct – Chartered Professional Accountants of Ontario

Audit and Finance Committee Terms of Reference

Signing Authority Policy

Signing Authority Registry and Approval Procedure

Procurement Policy

Procurement Procedures

APPENDIX A – Pre-Approved Non-Audit Services

Type of Service	Description
Non-Audit Services
Internal control attestation services	1. Advice on public company practices, documentation and attestation services relating to the report on internal controls over financial reporting     Audit of specific control procedures or the general control environment of an organization
Employee benefit plan audits	2. Audit of pension and other employee benefit plans, payroll deductions,  and funds for investments with such plans
Donations	3. Advice relating to the tax issues for donations except for donations involving substantial corporate, business, or real estate assets
Other attest services	4. Attest services that are not required by statute or regulation (e.g., real estate cost certificates; payout calculations for benefit plans)
Application and general control reviews	5. Documentation and attestation of IT and general controls related to specific applications, including overall general computer controls.
Consultation regarding GAAP	6. Discussions, analysis, review and testing of impact of new pronouncements, acquisition accounting, and other GAAP topics     Assistance in understanding new accounting and disclosure requirements and the gaps vs current practices
Tax Services
Tax Compliance	7. Compilation and review of income, capital, sales, use, property, excise, local, commodity (e.g. VAT, HST, etc.) tax returns, filings, and forms. Consultation regarding handling of items for tax returns, required disclosures, elections, and filing positions available
Tax consulting	8. Assistance with tax audits, examinations or requests for information 9. General tax advice including advice on technical interpretations, applicable laws and regulations, and tax consulting 10. Initial tax structuring of new investments 11. Assistance with tax appeals that are not in front of a tax court or its equivalent
Customs and duties	12. Compliance reviews and advice on compliance in the areas of tariffs and classification, origin, pricing, and documentation. Assistance with customs audits or requests for information
Other Services
Benchmarking	13. Benchmarking, surveys and other advice related to best practices with respect to financial reporting practices and other business processes
Information services	14. Provision of accounting, tax and reporting literature and access to online data bases