17.1 Introduction

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The audited consolidated financial statements of the Government of Canada with supporting notes and schedules are included in the Public Accounts of Canada which are tabled in Parliament and subsequently released to the general public. As part of the audit process, the Auditor General and the signatories to the consolidated financial statements of the Government of Canada, the Secretary of the Treasury Board of Canada, the Deputy Minister of Finance, the Deputy Receiver General for Canada and the Comptroller General of Canada obtain representations from the management of reporting organizations, i.e. various Crown corporations and other reporting entities, which form part of the Government's reporting entity and which have provided financial and other information to the Receiver General for publication in the Public Accounts of Canada. The representations confirm management's responsibilities with respect to proper recording of financial transactions in the accounts of Canada and where applicable, in the accounts of the reporting entity. Other representations cover the proper reporting of information to be included in the Public Accounts of Canada.

In addition, the Auditor General also obtains representations relative to the audited consolidated financial statements of the Government of Canada and the Public Accounts of Canada from the Deputy Receiver General for Canada, the Secretary of the Treasury Board of Canada, the Comptroller General of Canada and the Deputy Minister of Finance. In order for these individuals to make such representations to the Auditor General, it is necessary for the Deputy Receiver General to obtain supporting representations from Crown corporations and other reporting entities.

Financial information of Crown corporations and other reporting entities (see list in Appendix A) is either recorded as investments or consolidated with that of the Government for reporting purposes in the audited consolidated financial statements of the Government. Crown corporations and other reporting entities must submit representations to support the information pertaining to their activities that appear in the Public Accounts of Canada as they form part of the Government's reporting entity.

Several Crown corporations (see list in Appendix B) are also required to use the Consolidated Revenue Fund (CRF) or have been delegated authority to do so under Section 33 of the Financial Administration Act (FAA) (see Appendix C). Accordingly, some or all of their financial transactions are recorded in the accounts of Canada, and their financial information is disclosed in the Public Accounts of Canada. It must be stressed that those Crown corporations listed in Appendix B, which are required to use the CRF or which have been delegated authority under Section 33 of the FAA must, whenever appropriate, make representations for those transactions recorded in the accounts of Canada and for those transactions that should have been recorded in the accounts of Canada.

Information regarding insurance programs administered by agent Crown corporations also appears as a note to the audited consolidated financial statements of the Government of Canada. The Canada Deposit Insurance Corporation, the Canada Mortgage and Housing Corporation and the Export Development Canada are to address the representation concerning insurance programs shown in subsection 17.4.4.

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17.1.1 Purpose and Scope

The purpose of this chapter is to identify the reporting requirements for the Letter of Representation (LOR), which must be submitted to the Auditor General of Canada and to the Deputy Receiver General for Canada. The Letter of Representation serves as a written confirmation by management to the Auditor General and to the signatories of the consolidated financial statements of the Government of Canada that management is responsible for the financial information to be included in the audited consolidated financial statements of the Government of Canada contained in the Public Accounts of Canada. It also confirms that management has disclosed all important and relevant information to the external auditor.

Minor wording changes may be required to make a representation applicable to a particular Crown corporation or other reporting entity. Any change to the wording proposed by a reporting organization should be discussed with the contacts within Public Works and Government Services Canada (PWGSC) described in section 17.5, prior to their inclusion. In addition, the Deputy Receiver General and the Auditor General reserve the right to require amended wording, new inclusions or additional representations.

Letters of Representation are not published in the Public Accounts of Canada, but the Deputy Receiver General requires a signed duplicate of the representations made by each Crown corporation and other reporting entity to the Auditor General to support similar representations made to the Auditor General of Canada by the Deputy Receiver General for Canada, the Secretary of the Treasury Board of Canada, the Comptroller General of Canada and the Deputy Minister of Finance, pertaining to the reporting of financial information to be included in the audited consolidated financial statements of the Government of Canada contained in the Public Accounts of Canada.

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17.1.2 Authority

The authorities for this chapter are Sections 63 and 64 of the FAA (R.S., c. F-11; 1985), which require the Receiver General to maintain the accounts of Canada and to prepare the Public Accounts of Canada, and Section 6 of the Auditor General Act which requires the Auditor General to examine and report on the audited consolidated financial statements of the Government of Canada contained in the Public Accounts of Canada.

In order to fulfill this responsibility, and in accordance with Section 65 of the FAA which allows the Receiver General to request appropriate information, and Section 13 of the Auditor General Act, which entitles the Auditor General to require and receive appropriate information, the Receiver General and the Auditor General require annual Letters of Representation.

Failure or refusal to comply with this chapter therefore constitutes non-compliance with Sections 63 and 64 of the FAA.

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17.1.3 Application

This chapter applies to those Crown corporations and other reporting entities:

• that provide information that is accounted for by consolidation or disclosed in a note to the audited consolidated financial statements of the Government of Canada, including, but not restricted to Crown corporations listed in Schedule III, Parts I and II of the FAA as well as a number of those not listed in the schedules of the FAA as they are exempt from the application of Divisions I to IV of Part X of the FAA and other reporting entities. (A list of Crown corporations and other reporting entities is presented in Appendix A of this chapter);

• which have been delegated authority under Section 33 of the FAA. See Appendix B for a list of these Crown corporations with authority for a portion of their business;

• that administer insurance programs as agents of the Crown and provide data or information to compile the portion of the contingent liabilities note related to Insurance Programs that is contained in the Notes to the Consolidated Financial Statements of the Government of Canada; and,

• that, for whatever reason, are requested to provide a Letter of Representation by the Auditor General or Receiver General for Canada.

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17.1.4 Instruction

All Crown corporations and other reporting entities, which meet the criteria described in section 17.1 and subsections 17.1.3 and 17.4.1, are required to submit a Letter of Representation in accordance with the procedures contained in subsections 17.4.2 and 17.4.3.

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