External Audit [First Nations Financial Management Board, FNFMB]

First Nations Financial Management Board
Publisher acronym:
Year of publication: 

An external audit is the process of having someone independent review an organization’s financial statements and form a view as to whether or not they reflect the actual state of the money and property of the organization.

The independent reviewer (known as the auditor ) must follow certain standards known as auditing standards. The external audit provides reassurance to the First Nation and other readers of the financial statements that what they are reading reflects reality.

Under the FAL, Council is responsible for overseeing the external audit through recommendation from the Finance and Audit Committee.

Council must create a policy about the yearly external audit of the First Nation’s financial statements and special reports.

This policy must include the steps for the choosing and getting rid of the auditor and must require that the auditor be:

independent of the First Nation
a public accounting firm or public accountant in good standing with the Chartered Professional Accountants of Canada (and the equivalent group for the province or territory where the public accounting firm or public accountant is located and practicing)