Financial Administration Act (R.S.C., 1985, c. F-11)

Marginal note:Persons not eligible

• 135. (1) A person is disqualified from being appointed or re-appointed or continuing as an auditor of a Crown corporation pursuant to section 134 if that person is not independent of the corporation, any of its affiliates, or the directors or officers of the corporation or any of its affiliates.

• Marginal note:Independence

  (2) For the purposes of this section,

  • (a) independence is a question of fact; and

  • (b) a person is deemed not to be independent if that person or any of that person’s business partners

    • (i) is a business partner, director, officer or employee of the Crown corporation or any of its affiliates, or a business partner of any director, officer or employee of the corporation or any of its affiliates,

    • (ii) beneficially owns or controls, directly or indirectly through a trustee, legal representative, agent or other intermediary, a material interest in the shares or debt of the Crown corporation or any of its affiliates, or

    • (iii) has been a receiver, receiver-manager, liquidator or trustee in bankruptcy of the Crown corporation or any of its affiliates within two years of the person’s proposed appointment as auditor of the corporation.

• Marginal note:Resignation

  (3) An auditor of a Crown corporation who becomes disqualified under this section shall resign immediately after becoming aware of the disqualification.

Marginal note:Qualifications preserved

136. Nothing in sections 134 and 135 shall be construed as empowering the appointment, re-appointment or continuation in office as an auditor of a Crown corporation of any person who does not meet any qualifications for such appointment, re-appointment or continuation established by any other Act of Parliament.

Marginal note:Resignation

137. A resignation of an auditor of a Crown corporation becomes effective at the time the corporation receives a written resignation from the auditor or at the time specified in the resignation, whichever is later.

Special Examination

Marginal note:Special examination

• 138. (1) Each parent Crown corporation shall cause a special examination to be carried out in respect of itself and its wholly-owned subsidiaries, if any, to determine if the systems and practices referred to in paragraph 131(1)(b) were, in the period under examination, maintained in a manner that provided reasonable assurance that they met the requirements of paragraphs 131(2)(a) and (c).

• Marginal note:Time for examination

  (2) A special examination shall be carried out at least once every 10 years and at any additional times that the Governor in Council, the appropriate Minister, the board of directors of the corporation to be examined or the Auditor General of Canada may require.

• Marginal note:Plan

  (3) Before an examiner commences a special examination, he shall survey the systems and practices of the corporation to be examined and submit a plan for the examination, including a statement of the criteria to be applied in the examination, to the audit committee of the corporation, or if there is no audit committee, to the board of directors of the corporation.

• Marginal note:Resolution of disagreements

  (4) Any disagreement between the examiner and the audit committee or board of directors of a corporation with respect to a plan referred to in subsection (3) may be resolved

  • (a) in the case of a parent Crown corporation, by the appropriate Minister; and

  • (b) in the case of a wholly-owned subsidiary, by the parent Crown corporation that wholly owns the subsidiary.

• Marginal note:Reliance on internal audit

  (5) An examiner shall, to the extent he considers practicable, rely on any internal audit of the corporation being examined conducted pursuant to subsection 131(3).