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Auditor General’s examination of the Alberta Securities Commission

The Auditor General wishes to clarify the nature of audit work planned at the Alberta Securities Commission (ASC or Commission).

Background

The Alberta Legislature, by statute, designates the Auditor General as “auditor of every ministry, department, regulated fund and Provincial agency,” which includes the ASC. The statutory mandate of the Auditor General includes financial, management systems and legislative compliance auditing.

ASC is an industry-funded provincial corporation that reports to the Minister of Finance. It has responsibility for maintaining the efficiency and integrity of capital markets through the administration of the Alberta Securities Act, the Securities Regulation and the Alberta Securities Commission Rules.

The audit work

On February 8, 2005, the Auditor General’s staff presented the 2005 audit plan to the ASC Audit Committee. The plan included the scope of the engagement, areas of focus, and the proposed audit approach for the annual financial statement audit. It also included a systems audit of the Commission’s enforcement system.

As part of each financial statement audit, the Auditor General considers:

  • significant audit risks, including the potential for fraud and error; and
  • the control environment, including whether the organization has a code of conduct and other policies regarding acceptable business practices and standards of behaviour, adequate conflict of interest policies, and controls to prevent and detect fraud and error.

Our 2005 audit of ASC’s enforcement system will include an examination of:

  • systems to respond to complaints of violations of the Alberta securities law;
  • systems to identify and track complaints;
  • procedures to determine the extents of investigations; and
  • processes to ensure that conclusions or decisions are adequately documented.

Minister of Finance letter dated April 13, 2005

In a letter to the Auditor General dated April 13, 2005, the Minister of Finance referred to our previously planned audit of the ASC’s enforcement systems, and:

  • expressed hope that this audit would be completed as quickly as possible;
  • requested that we report separately on the results of this audit to the Legislature; and
  • offered the Government’s and the Department’s full and unfettered cooperation.

The Auditor General has commenced planning of this work. He hopes to receive the full and unfettered cooperation of the Commission and its management and to begin the detailed work at the ASC offices as soon as possible.

What we have left to do

After the audit work is complete, our draft report will be discussed with the ASC Audit Committee. This discussion is part of our normal audit practice where management is given an opportunity to comment on our findings and to discuss our recommendations. Then, as required by the Auditor General Act (section 24), our report will be presented to the Provincial Audit Committee prior to being formally released to the Legislative Assembly.

Release

We intend to issue a special report to the Legislative Assembly.

CONTACT INFORMATION
Edmonton (Head Office)
8th Floor, 9925 - 109 Street Edmonton, Alberta T5K 2J8, Canada
Tel: 780.427.4222 Fax: 780.422.9555
Calgary Office
#820, 600 - 6th Avenue SW, Calgary, Alberta T2P 0S5, Canada
Tel: 403.297.6451 Fax: 403.297.5195