4175. Audit in accordance with Canadian Auditing Standards

The Dealer Member's auditor must audit the Dealer Member’s fiscal year Form 1 filing in accordance with Canadian Auditing Standards. The audit of a Dealer Member requires a substantive approach and must include a review of the accounting system and the internal controls for safeguarding assets.

The review must:

1. cover any in‑house or service bureau electronic data processing operations, and

2. where applicable, consider and include the appropriate report based on the Canadian Standard on Assurance Engagements 3416, Reporting on Controls at a Service Organization.

Although conducted in accordance with Canadian Auditing Standards, a Dealer Member’s substantive audit procedures must be performed as at the fiscal year-end audit date and not as of an earlier date.

A Dealer Member’s risk adjusted capital and early warning reserve levels must be considered when determining materiality for the Dealer Member’s audit.