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FSRA Guidance Clarifies Auditor Requirements

Regulatory Standard Edition: January 2024 | Published: January 16, 2024

The Financial Services Regulatory Authority (FSRA) recently published its Final Guidance on Mortgage Administrators’ Filing Requirements, which explains how mortgage administrators must comply with financial reporting requirements in order to protect the funds and investments they handle for investors and lenders.

Though the Guidance directly impacts mortgage administrators regulated by FSRA, it also affects auditors engaged by licensed mortgage administrators on the required filings. According to FSRA, the new Guidance will help ensure administrators file the required statements and auditor's reports on time and that the auditor's report is certified by a licensed public accountant.

FSRA lists several key interpretations in the Guidance that Public Accounting Licence (PAL) holders should be aware of, including:

"[A]udited financial statements” to include the financial statement notes and the independent auditor’s report on the financial statements. Consequently, these two items must be included when an administrator provides FSRA with a copy of its audited financial statements.
“[L]icensed public accountant” to mean a Chartered Professional Accountant (“CPA”) who is in good standing and has an active licence to practice Public Accounting in the appropriate provincial jurisdiction.
The scope of the auditor’s reasonable assurance report on compliance about “the administrator’s trust account and the assets and liabilities under administration” will expand for fiscal years ending after December 31, 2024. The current scope covers an administrator’s trust account operations. After December 31, 2024, the scope will also cover other requirements relating to handling of client funds and record keeping.

CPA Ontario is the authorized designated body in Ontario to license and govern its members in the practice of public accounting, which is defined in the Public Accounting Act, 2004. For more information on the eligibility and requirements for public accounting, please visit our website.