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Auditing the Audit Requirement
Most jurisdictions in Canada require the unanimous consent of all shareholders, including non-voting shareholders, in order for a non-distributing corporation to dispense with an audit. The requirement is absolute and mandatory — there are no other exemptions or qualifications. The public policy rationale behind the rule is laudable; however,the implementation in practice can be austere. It is time to revisit the universal audit requirement as it applies to non-distributing corporations. Published in the April 2010 edition (No. 188) of Corporate Brief, published by CCH Canadian Limited.