Articles & Cases
Ontario Audit Exemption Increased to Non-Profit Corporations with up to 100,000 in annual income
July 07, 2007
The Ontario Ministry of Government Services has raised the annual income limit allowed for audit exemption from $10,000.00 to $100,000.00 for Ontario non-profit corporations. This has been proclaimed and will take effect August 1, 2007 when Bill 152 2006 “An Act to modernize various Acts administered by or affecting the Ministry of Government Services”.
This change will dramatically increase the number of Ontario non-profits eligible for audit exemption.
In Ontario, a non-profit an Ontario non-profit corporation under s. 96.1 of Corporations Act (Ontario) can be exempt from audit requirements if all members consent in writing.
Many organizations find that having a audit by an accountant is time consuming and expensive as compared to having unaudited financial statements prepared. With smaller non-profits it was difficult to justify an expense of $2-5,000.00 when your income was only $30,000. CRA does not require audited financial statements for charities.
Some organizations will still want to have audited financial statements because their funders may require audited financial statements. Alternatively not all members may consent in writing. This also raises the issue of importance of keeping an accurate and up-to-date list of members. Other organizations may decide to have an audit because audited financial statements provide greater assurance of correctness.
Keep in mind that federal non-share capital corporations under the Canada Corporations Act are still required under the Canada Corporations Act to have an annual audit and there is no exemption from audit requirements under the federal act.
For further information on legal resources for Canadian Non-Profits and Charities please visit http://www.blumbergs.ca/non_profit.php
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If you require legal advice with respect to non-profits or charities please contact Mark Blumberg at mark@blumbergs.ca or at 416-361-1982 x. 237