Canadian Albacore Association Financial Statements

Jason Roth jason.roth at
Wed Aug 23 20:48:04 EDT 2006

Dear Albacore sailors:

As you are likely aware, KPMG has completed an audit of our financial  
statements for the past 6 or 7 years. As a result of my past tenure  
with KPMG, I was able to obtain this audit for a cost of about  
$500.00 (which rose to $750.00 in the past couple of years).

Over the past year or so, there have been changes within KPMG, and  
all of my former colleagues have now either left the firm, or have  
retired. I am no longer able to obtain the audit “as a favour”, and  
KPMG would like to introduce a price which is more in line with the  
market rate for an audit of an organization our size. The fees for a  
“market rate” audit would be somewhere between $3,000 and $5,000.

We have three options, as far as I can tell.
1)   Continue with KPMG, paying market rates for an audit.

2)   Present unaudited financial statements and increase the  
transparency with additional reporting.

3)   Search for an alternative accounting firm to perform the audit  
on a free or nearly free basis

We have discussed this matter as an executive, and believe that this  
is an issue which the membership should have input on. Since this is  
a fairly major issue, we decided to share the information with you  
now, well in advance of the AGM, so that a reasonable discussion can  
be completed before the need to vote on motions.

Here are the pros/cons of each of the three options, followed by my  

If we continue with KPMG, we are receiving an audit opinion from one  
of the world’s leading accounting firms. However, in Canada, an audit  
is an audit, regardless of which accounting firm completes the work  
and signs the financial statements. We would be faced with having to  
increase fees by approximately $20.00 per member in order to cover  
the cost of this audit work. In my opinion there is really no sense  
in spending that kind of money, given that our total assets are less  
than $50,000.

However, completing an audit ensured that the financial statements  
presented to you at the AGM each year were accurate – that the  
statements reflected the transactions we actually completed. It was  
still up to the members and the executive to determine if those  
transactions were appropriate. Basically, the audit ensured that the  
executive (and especially me, as treasurer) wasn’t spending your  
money on personal activities and hiding it elsewhere in the financial  
statements. If we no longer complete an audit, I would recommend that  
you, through a motion at the AGM, ask the executive to provide  
interim reporting on all investment transactions and any significant  
expenditure that is out of the ordinary course of running the  
association. This would be additional reporting. The treasurer would  
still be expected to present financial statements at the AGM each year.

The third option would be the best of both worlds – we wouldn’t have  
to increase fees, and you would have the assurance that an audit  
provides. However, to pursue this approach would require your  
assistance to talk to friends, family, neighbours, crew, etc. to find  
a small accounting firm (or a sole practitioner) who would be willing  
to provide the CAA with an audit of the financial statements for  
little or no cost to the association.

I propose the following:
a)    That the membership accept the UNAUDITED financial statements  
for the year ended October 31, 2005; (they haven’t been audited by  
anyone yet). They will be presented at the AGM at the Canadian  
Championships in September.

b)   That the membership agrees to forgo an audit of the 2005 and  
2006 financial statements

c)    That the membership requests the executive provide interim  
reporting at least every 6 months, and that this reporting must  
include details of all investment transactions

d)   That the membership insists that the above arrangements are in  
effect only for the next year, and need to be renewed or changed  

Unless there is significant disagreement with the above, I intend to  
introduce motions at the AGM to make this happen.

If, in the meantime, someone knows a Chartered Accountant who is  
willing to take on the CAA as a client (annual fee for the audit =  
$500 to $750), please contact me as soon as possible.

I suggest that we make use of the albacore mailing list for comments  
on this matter (mail to: albacore at If you wish to mail  
me directly, please use my CAA account: money at

Sincerely yours,


Jason Roth, CA
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