| BILL NUMBER |
TITLE | CHAPTER NUMBER |
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| 47 | BUSINESS CORPORATIONS ACT | c. 57 | |||||
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Division 1 -- Definition and Application
202 In this Part, "authorized person" means a person who is authorized under section 205 to act as an auditor of a company.
203 (1) Subject to subsections (2) and (3), a company must have an auditor.
(2) If all of the shareholders of a company, whether or not their shares otherwise carry the right to vote, resolve by a unanimous resolution to waive the appointment of an auditor,
(a) the company is not required to appoint an auditor, and
(b) the provisions of this Part, except this section, do not apply to the company unless an auditor is appointed under section 204 (5).
(3) A waiver referred to in subsection (2) of this section may be given before, on or after the date on which an auditor is, under this Part, required to be appointed and is effective for one financial year only.
Division 2 -- Appointment and Removal of Auditors
204 (1) The directors of a company must appoint an authorized person as the first auditor of the company to hold office until the annual reference date following the recognition of the company.
(2) On or before the annual reference date referred to in subsection (1) and on or before each subsequent annual reference date, the shareholders of a company must, by an ordinary resolution, appoint an authorized person as auditor to hold office from that annual reference date until the next annual reference date.
(3) If an auditor is not appointed when required under subsection (2), the auditor in office continues as auditor until a successor is appointed.
(4) The directors may fill any casual vacancy in the office of auditor.
(5) If for any reason a company does not have an auditor, the court may, on the application of a shareholder or creditor of the company made on notice to the company,
(a) appoint an authorized person as auditor to hold office until the next annual reference date, and
(b) set the remuneration to be paid by the company to the auditor.
(6) Promptly after an auditor is appointed, the company must provide written notice to the auditor of the appointment.
205 A person is authorized to act as an auditor of a company if
(a) the person is a member, or is a partnership whose partners are members, of
(i) a Provincial or Territorial Institute/Ordre of Chartered Accountants within Canada, or
(ii) The Certified General Accountants Association of British Columbia,
(b) the person is certified, under section 222, by the Auditor Certification Board, or
(c) the company is a reporting issuer and the person is
(i) a person referred to in paragraph (a) or (b) of this section, or
(ii) authorized under the Securities Act to make an auditor's report.
206 (1) For the purposes of subsection (3):
"immediate family", when used in reference to a person referred to in that subsection, means any of the following who resides with that person:
(i) the spouse of that person;
(ii) a parent or child of that person;
(iii) any relative of that person or of that person's spouse;
"partner", when used in reference to a person referred to in that subsection, means any person with whom the person referred to in that subsection carries on in partnership the profession of public accounting.
(2) A person who is not independent of a company, its affiliates or its directors and officers must not act as the auditor of the company.
(3) For the purposes of this section, independence is a question of fact, but a person is not independent if
(a) the person is a director, officer or employee of the company or of an affiliate of the company, or is a partner, employer, employee or member of the immediate family of such a director, officer or employee,
(b) the person, a member of the person's immediate family, a partner of the person or a member of the immediate family of a partner of the person, beneficially owns or controls, directly or indirectly, any material interest in a security of the company or of any of its affiliates, or
(c) the person is appointed a trustee of the estate of the company under the Bankruptcy and Insolvency Act (Canada) or is a partner, employer, employee or member of the immediate family of that trustee.
207 (1) Subject to subsection (2), the shareholders of a company must, by an ordinary resolution, set the remuneration of the auditor.
(2) The directors may set the remuneration of the auditor if
(a) the shareholders so resolve by an ordinary resolution,
(b) the articles so provide, or
(c) the auditor is appointed by the directors.
208 (1) An auditor of a company who is not, or who ceases to be, an authorized person must, promptly after becoming aware of that fact,
(a) become an authorized person, or
(b) resign as auditor.
(2) An auditor of a company who is not, or who ceases to be, independent within the meaning of section 206 must, promptly after becoming aware of that fact,
(a) eliminate the circumstances that resulted in the auditor not being independent, or
(b) resign as auditor for that company.
(3) An interested person may apply to the court for an order that an auditor of a company referred to in subsection (1) or (2) of this section be removed on terms and conditions the court considers appropriate.
(4) An interested person may apply to the court for an order exempting an auditor from the prohibition imposed by section 206 and the court may, if it is satisfied that an exemption would not unfairly prejudice the shareholders, make an exemption order on the terms it considers appropriate.
209 (1) A company
(a) may remove its auditor before the expiration of the auditor's term of office by
(i) an ordinary resolution passed at a general meeting, or
(ii) a unanimous resolution of the shareholders whose shares carry the right to vote at general meetings, and
(b) must appoint, for the remainder of that term of office, an authorized person as auditor to replace the auditor removed under paragraph (a).
(2) Before calling a general meeting for the purpose specified by subsection (1) (a) (i), a company must send to the auditor
(a) written notice of the intention to call the meeting, specifying the date on which the notice of the meeting is proposed to be sent, and
(b) a copy of all material proposed to be sent to shareholders in connection with the meeting.
(3) The company must send the records required by subsection (2) to the auditor at least 14 days before the date on which the notice of the meeting is proposed to be sent.
(4) An auditor may send written representations to the company respecting that person's proposed removal as auditor under subsection (1) (a) (i) and, if those written representations are received by the company at least 5 days, not including Saturdays and holidays, before the date on which the notice of the meeting is proposed to be sent, the company, at its expense, must send a copy of those representations with the notice of the meeting to each shareholder entitled to that notice.
(5) If an auditor is removed from office by a unanimous resolution under subsection (1) (a) (ii) or resigns, the auditor may send the company written representations respecting that removal or resignation, and, if those written representations are received by the company within one month after the auditor's removal or resignation, the company must provide a copy of those representations to the shareholders, on or before the first annual reference date to follow the removal or resignation of the auditor, in one of the following manners:
(a) by making those representations available to the shareholders at the annual general meeting held on that date;
(b) if no annual general meeting is held on that date, by depositing a copy of those representations in the records office of the company on or before that date.
(6) If an auditor who sent written representations has been replaced, the replacement auditor may send to the company a written response to those representations and, if such a response is sent, the company must send it to the shareholders promptly after receipt.
(7) No company or person acting on behalf of a company incurs any liability merely because the company or person complies with subsection (4), (5) or (6).
210 (1) A public company must not, at an annual general meeting, propose the appointment of an auditor other than the incumbent auditor unless the company has sent, to all of the shareholders who are entitled to notice of the meeting, notice of its intention to do so in accordance with subsection (2).
(2) The notice of intention required under subsection (1) must be sent
(a) in, or within the time set for the sending of, the notice of the applicable annual general meeting under section 169, or
(b) in the company's information circular or equivalent, if any, sent in respect of the applicable annual general meeting.
(3) At least 14 days before sending the notice of intention required under subsection (1), the company must send to the incumbent auditor a written notice containing the following information:
(a) notification that management does not intend to recommend, at the meeting, that the auditor be reappointed;
(b) advice as to the date on which the notice of the meeting is proposed to be sent to the shareholders.
(4) If the incumbent auditor of a public company receives notice under subsection (3), that auditor may send written representations to the company respecting management's intention not to recommend the auditor's reappointment and, if those written representations are received by the company at least 5 days, not including Saturdays and holidays, before the date on which the notice of the meeting is proposed to be sent, the company, at its expense, must send a copy of those representations with the notice of the meeting to each shareholder entitled to that notice.
(5) No company or person acting on behalf of a company incurs any liability merely because the company or person complies with subsection (4).
211 (1) A person must not accept appointment as auditor of a company if the person is replacing an auditor who has resigned, who has been removed or whose term of office has expired or is about to expire until the person has requested and received from the auditor a written statement of the circumstances and the reasons why, in the auditor's opinion, the auditor was, or is to be, replaced.
(2) Despite subsection (1), an authorized person who is independent from a company within the meaning of section 206 may accept appointment as auditor of the company if, within 15 days after making the request referred to in subsection (1) of this section to the auditor who is to be replaced, the person does not receive a reply.
Division 3 -- Duties and Rights of Auditors
212 (1) An auditor of a company must
(a) report in the prescribed manner on the financial statements of the company referred to in section 185 (1) (a), (b) or (c), other than any financial statements of the company referred to in section 198 (2) (b), and
(b) make the examinations that are, in the auditor's opinion, necessary to enable the auditor to make the report required by paragraph (a) of this subsection.
(2) In making the report required by subsection (1) (a) on financial statements of a company, the auditor of the company may rely on the report of an auditor of a corporation or an unincorporated business
(a) if the accounts of that corporation or business are included in whole or in part in the financial statements of the company, and
(b) whether or not the financial statements of the company reported on by the auditor are in consolidated form.
213 If an opinion given by an auditor in a report required by section 212 (1) (a) is subject to qualification, the auditor must state, in the report, the reasons for that qualification.
214 (1) If financial statements of a company are to be placed before a general meeting, a shareholder who is entitled to attend the meeting may provide to the company written notice requiring the attendance at the meeting of the auditor who reported on those financial statements.
(2) If the auditor of a company is to be removed at a general meeting, a shareholder who is entitled to attend the meeting may provide to the company written notice requiring the attendance at the meeting of the auditor who is to be removed.
(3) If a shareholder provides written notice under subsection (1) or (2) to the company at least 5 days before the general meeting, the auditor must attend the meeting and the company must pay the expenses of that attendance.
215 (1) If the auditor is present at an annual general meeting, the auditor must answer questions concerning
(a) the company's financial statements being placed before that meeting under section 185 (1), and
(b) the auditor's opinion on those financial statements as expressed in the report made under section 212 (1) (a).
(2) At the request of any shareholder attending an annual general meeting, there must be read to the meeting the report of the auditor on those financial statements.
216 (1) The directors or officers of a company must communicate to the auditor who reported on financial statements under section 212 (1) (a) any facts that come to their attention that
(a) could reasonably have been determined before the date on which the financial statements were published, and
(b) if known before that date, would have required a material adjustment to those financial statements.
(2) The directors must promptly amend the financial statements to reflect the facts referred to in subsection (1) of this section and must provide the amended financial statements to the auditor.
(3) If the auditor is notified or becomes aware, otherwise than under subsection (1), of an error or misstatement in financial statements on which the auditor has reported, the auditor must, if, in the auditor's opinion, correction of the error or misstatement requires a material adjustment to those financial statements, inform each director accordingly.
(4) If the auditor informs the directors of an error or misstatement under subsection (3), the directors must promptly amend the financial statements to correct the error or misstatement and must provide the amended financial statements to the auditor.
(5) If amended financial statements are provided to the auditor under subsection (2) or (4),
(a) the auditor must promptly
(i) amend the report referred to in section 212 (1) (a) in respect of those financial statements, and
(ii) provide the amended report to the directors, and
(b) the directors must, promptly after their receipt of an amended auditor's report under paragraph (a) of this subsection, send to the shareholders a copy of the amended report and a statement explaining the effect of the amendment on the financial position and results of the operations of the company.
217 (1) A person who is or who has been a director, officer, employee or agent of a company or of a company's subsidiary or holding corporation must, to the extent that the person is reasonably able to do so, comply with any demand of the auditor of the company to do the following:
(a) provide to the auditor all of the information and explanations that the auditor considers necessary for the purpose of any examination or report that the auditor is required or permitted to make under this Act;
(b) allow the auditor access to all of the company's records, all of the records of the company's subsidiaries, if any, and all of the records of its holding corporation, if any, that the auditor may require for the purpose of an examination or report referred to in paragraph (a) and provide to the auditor copies of those records if and as required by the auditor.
(2) An oral or written statement made to the auditor under subsection (1) (a) has qualified privilege.
218 If a subsidiary of a company is a corporation to which this Act does not apply, the company must make available to the company's auditor the records of that subsidiary and must require the directors, officers, employees and agents of that subsidiary to make available to the auditor of the company the information, explanations and copies required by section 217.
219 (1) The auditor of a company is entitled, in respect of a general meeting,
(a) to attend the meeting,
(b) to each notice and other communication, relating to the meeting, to which a shareholder is entitled, and
(c) to be heard at the meeting on any part of the business of the meeting that deals with matters with respect to which the auditor has a duty or function or has made a report.
(2) The auditor must appear at a meeting of the directors when requested to do so by the directors and after being given reasonable notice to do so.
220 An oral or written statement or report made under this Act by the auditor or a former auditor of a company has qualified privilege.
Division 4 -- Auditor Certification Board
221 (1) In this Division, "board" means the Auditor Certification Board continued under this section.
(2) The Auditor Certification Board established under the Company Act, 1996, is continued.
(3) The board is to be comprised of
(a) one individual who is a member of The Institute of Chartered Accountants of British Columbia,
(b) one individual who is a member of The Certified General Accountants Association of British Columbia,
(c) one individual who is a member of the Certified Management Accountants Society of British Columbia, and
(d) not more than 2 other individuals.
(4) The members of the board are to be appointed by the Lieutenant Governor in Council on the terms and conditions the Lieutenant Governor in Council specifies.
(5) Unless set at a higher number by the board, a quorum of the board consists of 2 members.
(6) The board may elect one of its members as chair, establish its own procedures and make the rules it considers advisable to carry out its function.
(7) The board may, with the prior approval of the Lieutenant Governor in Council and in accordance with the Public Service Act, employ the persons it considers necessary to carry out its function.
(8) Members of the board serve without remuneration, but the Lieutenant Governor in Council may set a daily allowance to be payable to each member, and each member is to be reimbursed for reasonable travelling and out of pocket expenses, as certified by the chair of the board, that are necessarily incurred by the member in discharging the member's duties.
222 (1) The function of the board is to receive applications, from persons who apply to be certified as auditors, for the purposes of section 205 (b) and to certify those persons if, in the board's opinion, they have the qualifications necessary to be auditors for the purposes of this Act.
(2) The board may take into consideration the geographical area in which an applicant carries on or intends to carry on business, and may certify an applicant subject to terms and conditions the board considers advisable.
(3) No member of the board is liable for loss or damage suffered by any person because of anything done or omitted to be done in good faith in the exercise or intended exercise of any power, or in the performance or intended performance of any duty, under this section or under section 221.
223 This Division applies to companies that are public companies.
224 (1) The directors of a company must, at their first meeting held on or after each annual reference date, elect from among their number a committee, to be known as the audit committee, to hold office until the next annual reference date.
(2) An audit committee must be composed of at least 3 directors, and a majority of the members of the committee must not be officers or employees of the company or of an affiliate of the company.
(3) The quorum for a meeting of the audit committee is a majority of the members of the committee who are not officers or employees of the company or of an affiliate of the company.
(4) The members of the audit committee must elect a chair from among their number and, subject to subsection (3), may determine their own procedures.
(5) The auditor of a company must be given reasonable notice of, and has the right to appear before and to be heard at, each meeting of the company's audit committee, and must appear before the audit committee when requested to do so by the committee and after being given reasonable notice to do so.
(6) On the request of the auditor, the chair of the audit committee must convene a meeting of the audit committee to consider any matter that the auditor believes should be brought to the attention of the directors or shareholders.
225 The audit committee must, in addition to or as part of any responsibilities assigned to it under this Act, review and report to the directors on the following before they are published:
(a) the financial statements of the company, referred to in section 185 (1) (a), (b) or (c), other than any financial statements of the company referred to in section 198 (2) (b);
(b) the auditor's report, if any, prepared in relation to those financial statements.
226 The directors must provide to the audit committee the financial statements and auditor's report referred to in section 225 in sufficient time to allow the committee to review and report on those financial statements and auditor's report as required under that section.
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