Independent auditor’s reports for pension plan financial statements
Published on
Last updated on November 22, 2016
The working group reminds pension plan administrators governed by Quebec’s Supplemental Pension Plans Act (the “SPP Act”) that they must have a financial report prepared in accordance with section 161 of the SPP Act. Retraite Québec1 allows the following 2 options for preparing this information:
- have pension plan financial statements prepared in accordance with the Canadian accounting standards for pension plans in Part IV of the CPA Canada Handbook – Accounting;
- have a pension plan financial report prepared in accordance with the accounting framework for the preparation of a financial report under section 161 of the SPP Act mentioned in the Guide to the Annual Information Return (the “AIR Guide”) (i.e. an accounting framework that excludes pension obligations). This accounting framework is described in Appendix 3(a) of the AIR Guide.
Under section 161 of the SPP Act, pension plan administrators also entrust auditors with the mandate to complete lines 387 to 389 of the AIR. In these circumstances, auditors will prepare a report in accordance with Canadian Standard on Related Services (CSRS) 4460. Penalties may apply if the report is not properly used.
The following table summarizes the sample reports applicable to the various situations that auditors may encounter in practice.
References to the “Reporting Guide” refer to the Reporting Implications of New Auditing and Accounting Standards guide available on the Auditing and Assurance Standards Board website.
Nature of financial information prepared |
Pension plans affected |
Approaches to comparative information (See CAS 710) |
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|---|---|---|---|
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Reference to each period for which financial information is presented (comparative financial statements) |
Reference to the current period only (corresponding figures) |
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Financial statements prepared in accordance with Canadian accounting standards for pension plans in Part IV of the CPA Canada Handbook – Accounting |
Plans in all jurisdictions, including plans governed by the SPP Act |
See illustrative report 2(h) in the Reporting Guide |
Use illustrative report 2(i) in the Reporting Guide as a starting point and exclude the comparative information paragraph which refers to adopting the new accounting framework |
|
Financial reports prepared in accordance with the accounting framework for the preparation of a financial report mentioned in the AIR Guide |
Pension plans governed by |
Use the attached illustrative report, which refers to the current period only, as a starting point but refer to each period for which financial information is presented and make the necessary grammatical changes |
See the illustrative report in the document entitled Pension plan financial report intended to meet the financial reporting requirements of a pension plan governed by the Supplemental Pension Plans Act (Quebec) — Auditor’s report refers to the current period only |
|
Pension fund financial statements |
Plans other than those governed by |
Use illustrative report 3(b) in the Reporting Guide as a starting point, but in the introductory and opinion paragraphs, refer to each period for which financial information is presented |
See illustrative report 3(b) in the Reporting Guide |
The technical working group reminds preparers that, in keeping with the rights of eligible employees, plan members and beneficiaries, to consult annual reports (s. 114 of the Supplemental Pension Plans Act (Quebec) and s. 60 of the regulation related thereto), distribution of the auditor’s report on the annual financial report should not be restricted to the Retraite Québec and plan administrators alone.
For pension plans that are not governed by the SPP Act, the analysis of available financial reporting frameworks and their impact on the auditor’s report must be based on the applicable legislative and regulatory framework.
Lastly, the technical working group reminds members that the independent auditor’s report to be filed with the Retraite Québec should always include the financial statements or the financial report covered in the opinion.
Technical working group on pension plans
1. Following the coming into force of the act to merge the Commission administrative des régimes de retraite et d’assurances and the Régie des rentes du Québec, the “Régie des rentes du Québec” will change its name to “Retraite Québec” on January 1, 2016.