At annual shareholders’ meetings, shareholders must, by ordinary resolution, appoint an auditor to audit the corporation’s financial statements. However, the shareholders of a non-distributing corporation can decide by a unanimous resolution (which includes voting and non-voting shares) not to appoint an auditor.
Appointing an auditor increases the reliability of the financial statements and improves protection for stakeholders.
Preparing financial statements
A corporation must prepare financial statements. Financial statements must be prepared in accordance with the Generally Accepted Accounting Principles set out in the CPA Canada Handbook – Accounting or the CPA Canada Public Sector Accounting Handbook.
In some cases, distributing corporations can prepare their financial statements according to the U.S GAAP. To determine if this applies to your corporation, consider consulting a lawyer or another professional.
Sharing financial statements
You must provide copies of your financial statements to your shareholders at least 21 days before your corporation’s annual meeting each year.