External Auditor for Non-Audit Services, Policy on Use of the [November 4, 2013]

University of Toronto Governing Council

Policy on the Use of the External Auditor for Non-Audit Services

November 4, 2013

To request an official copy of this policy, contact:

The Office of the Governing Council Room 106, Simcoe Hall
27 King’s College Circle University of Toronto Toronto, Ontario
M5S 1A1

Phone: 416-978-6576
Fax: 416-978-8182
E-mail: governing.council@utoronto.ca
Website: http://www.governingcouncil.utoronto.ca/

Policy on Use of the External Auditor for Non-Audit Services

Purpose

The Governing Council approves the appointment of the University’s external auditor upon the recommendation of the Business Board and the Audit Committee. The Audit Committee is responsible to ensure that the objectivity and independence of the external auditor is maintained while providing non-audit services. The primary role of the external auditor is to perform audits for the University of Toronto for which an audit opinion is issued.

The external auditor is required to comply with auditor independence rules as set forth in Rule 204 in the Rules of Professional Conduct issued by the Institute of

Chartered Accountants of Ontario. The most recent revision to the independence rules in the Rules of Professional Conduct was February 2011.

A non-audit service is defined as a service for which an external audit opinion is not issued and for which an additional fee is charged.

The purpose of this policy is to articulate the authorities for engaging the external auditor for non- audit services.

Policy

  1. The University will not engage its external auditor to carry out any prohibited services as determined by the Canadian Institute of Chartered Accountants.
  2. The external auditor may refuse any assignment that it deems to be an infringement of its independence without negative consequence.
  3. The Governing Council delegates to the Chair of the Audit Committee the authority to approve the engagement of the external auditor for non-audit services.
  4. The Chair of the Audit Committee has the authority 1) to approve the non-audit service or 2) to consult with the full Audit Committee before making a decision, or 3) to refer it to the Audit Committee to recommend approval to the Business Board and Governing Council. The Chair of the Audit Committee will update the Audit Committee quarterly on any action taken.
  5. The Governing Council delegates to the Chief Financial Officer the authority to engage the external auditor for the following pre-approved routine non-audit services up to $100,000 per assignment:
    a. All tax matters, including, but not limited to income tax, retirement planning, sales taxes, commodity taxes, business taxes, real estate taxes, land transfer taxes, issuance of charitable receipts and assessments of the broad-based tax implications for individual transactions.
    b. External auditor participation in the risk assessment process.
    c. Professional services with respect to advice on the accounting for individual transactions (e.g. real estate acquisitions) or categories of transactions (e.g. employee future benefits).​​​​​​​
    d. Professional services with respect to advice on financial statement note disclosures (e.g. Ontario Student Opportunity Trust Fund disclosures).
  6. The Chief Financial Officer can delegate his or her authority to other members of the administration, as appropriate to engage the external auditor for pre-approved non-audit services within their area of responsibility (e.g. income tax consulting delegation to Human Resources).
  7. The Audit Committee receives an annual report from the external auditor which lists all non-audit services performed by the external auditor.
  8. The Audit Committee receives a quarterly report, accumulating to an annual report, from the Administration, detailing the payments made to the external auditor with respect to non-audit services.
  9. This revised policy becomes effective November 1, 2013.

Sheila Brown
Chief Financial Officer

Approved by the Business Board February 20, 2006. Revisions approved by the Business Board November 4, 2013.