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- News Release 2002-049 - 

Accountant's Report : Years Prior to 1993

on the results of applying specified auditing procedures in connection with the Canada Customs and Revenue Agency’s assertion that no financial information is available to separately identify the provincial portions of Mutual Fund Trust Capital Gains Refunds for tax years prior to 1993

To the Minister of Finance of Canada

Consistent with my engagement letter to the Deputy Minister of Finance of Canada, I have performed the specified procedures set out in the Annex to this report in connection with the Canada Customs and Revenue Agency’s assertion that no financial information is available to separately identify the provincial portions of Mutual Fund Trust Capital Gains Refunds for tax years prior to 1993.

As a result of applying the specified procedures as set out in the Annex to this report, I found no exceptions. However, these specified procedures do not constitute an audit of and accordingly I do not express an opinion on the Canada Customs and Revenue Agency’s assertion that no financial information is available to separately identify the provincial portions of Mutual Fund Trust Capital Gains Refunds for tax years prior to 1993.

This report has been prepared for use solely in connection with an evaluation of the omission of provincial capital gains refunds earned by mutual fund trusts from the previously issued Statements of Income Taxes Payable to the Provinces and Territories prior to the 1993 tax year.

Sheila Fraser FCA
Auditor General of Canada

Ottawa, Canada
May 31, 2002

Annex to the Accountant’s Report

Specified auditing procedures performed in connection with the Canada Customs and Revenue Agency’s assertion that no financial information is available to separately identify the provincial portions of Mutual Fund Trust Capital Gains Refunds for tax years prior to 1993

1) Obtain from the Canada Customs and Revenue Agency (CCRA) the following:

a) Written management representations indicating:

i. the type of financial information CCRA attempted to find;

ii. the type of activities CCRA undertook to locate this financial information;

iii. the results of these activities;

iv. the policies and / or procedures that impacted on the availability of financial information on Mutual Fund Trust Provincial Capital Gains Refunds prior to the 1993 tax year; and

v. CCRA’s conclusion on the availability of adequate financial information for Mutual Fund Trust Provincial Capital Gains Refunds for tax years prior to 1993.

b) CCRA’s internal correspondence and other documentation supporting the representations obtained in a) above.

2) Review CCRA’s relevant documentation per Procedure 1b) above for adequate and appropriate evidence that CCRA searched for the following possible sources of information:

a) general ledger trial balances;

b) details of appropriate general ledger accounts;

c) details of relevant general ledger postings;

d) details of relevant assessed T3 (Trust) returns; and

e) details of assessed T184 (Capital Gains Refunds for Mutual Fund Trusts) forms.

3) Review CCRA’s relevant documentation per Procedure 1b) above for adequate and appropriate evidence that CCRA considered (searched for) the following possible information sources (in any of electronic, “microfiche” and / or paper form):

a) Taxation general ledger;

b) T3 Assessing system(s)

c) Manual Assessing system(s);

d) Manual assessment reporting system(s) (such as the Automated Assessment Control (AAC) System);

e) Assessing databases (computer and manual assessments if different);

f) Taxpayer accounting systems (such as Automated Sub Ledger (ASL) System); and

g) Tax returns.

4) Review CCRA’s relevant documentation per Procedure 1b) above for evidence that appropriate areas within CCRA were considered including:

a) Information Technology Branch;

b) Assessment and Collection Branch;

c) Finance and Administration Branch;

d) Taxroll Division;

e) T3 Assessment Division; and

f) Revenue Accounting and Reporting Division.

5) Review the policies / procedures provided by CCRA relating to the retention of data and verify that CCRA’s representations are consistent with these policies / procedures.

6) Summarize the results of the above procedures and prepare the appropriate Accountants Report.

- News Release 2002-049 -