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Does your non-profit need an audit? For a federal not-for-profit, it comes down to two things: how much revenue you bring in, and whether the corporation counts as soliciting. Over $250,000 and soliciting, or over $1 million and not, and the Canada Not-for-profit Corporations Act means an audit by a public accountant. Below those lines you may be able to settle for a review.
Does your non-profit need an audit or a review?
Corporations Canada sets the thresholds for federal non-profits, and it lays them out on its financial statements and review page. Provincial non-profits and registered charities can follow other rules, so check who incorporated you before you use this table.
| Type of corporation | Annual revenue | What the accountant does |
|---|---|---|
| Soliciting | Over $250,000 | Audit |
| Soliciting | $50,000 to $250,000 | Audit, unless members pass a special resolution for a review engagement |
| Soliciting | $50,000 or less | Review engagement, or an audit if members pass an ordinary resolution |
| Not soliciting | Over $1 million | Audit |
| Not soliciting | $1 million or less | Review engagement, or an audit if members pass an ordinary resolution |
A soliciting corporation is one that draws on public sources of money, such as donations and government grants. The exact test is on the Corporations Canada page, so read it before you pick a row.
Below the audit lines, members can also waive the accountant altogether, but only by a unanimous resolution, and then only a compilation is needed. Most boards don’t want to be the group that did that.
What does that look like for a real group?
Picture a community food bank in Moncton, incorporated federally, that raises money from the public. Revenue last year was $180,000. It sits in the middle row, so an audit is the default. If the members vote by special resolution (two thirds of the votes cast), they can choose a review engagement instead. Next year a big grant pushes revenue to $270,000. Now the door closes, and an audit is required whatever the members want.
The same food bank, if it didn’t solicit and stayed under $1 million, would have a review as the default. The word “soliciting” does a lot of work here, which is why it’s worth getting the classification right early.
How does the audit process run, step by step?
Members appoint the public accountant by ordinary resolution. Appointment comes first, then year-end, then the work.
After the year ends, your bookkeeper or treasurer closes the books and prepares draft financial statements. The auditor asks for the ledger, bank reconciliations, payroll records and support for the larger entries. Then come questions. Expect a list, and expect a few to be awkward.
The auditor may send you a management letter listing weaknesses. The board reads it, decides what to fix and records the decision. The signed statements then go to members. Soliciting corporations also file financials with Corporations Canada, within 15 months of the preceding annual meeting and no later than six months after the end of the preceding financial year.
Who can be your auditor?
Corporations Canada says the public accountant must be a member in good standing of a provincial accounting body, meet provincial qualifications for audits and reviews, and be independent of the corporation, its affiliates, directors and officers. Independence rules out your treasurer, and it rules out a board member’s firm too.
What should you have ready before fieldwork?
Good preparation makes the audit smoother. Gather the year’s bank statements and reconciliations. Put donation receipts in order and match them to deposits. Keep grant agreements handy, since auditors ask how restricted funds were spent.
If you have paid staff, have the payroll files ready. Our payroll remittance calculator shows what one employee paid $2,500 every two weeks costs you in remittances: $753.34 per pay run, with $197.79 of it as the employer share. If your real remittances sit far from a ballpark like that, find out why before the auditor does.
Non-profits that charge for goods or services may also handle sales tax. The GST/HST calculator shows $260 of HST on a $2,000 invoice in Ontario, which is an easy check against your own invoices. And the percentage calculator helps with the ratio questions boards ask, such as what share of revenue went to programs.
Mistakes and limits
Three things go wrong most often.
One is treating the audit as a pass or fail test. It’s a check on whether the statements are fairly presented. It isn’t a review of whether the board made good choices.
Another is missing the deadline because the auditor was appointed late. Start early enough that the work fits inside the filing window.
The third is mixing up the two kinds of rule. A registered charity has the CRA’s expectations on top of corporate law. The CRA asks charities to file the T3010 information return within six months of their fiscal year end, and the CRA says that from 2027 it must be filed online. We didn’t find an audit requirement on that overview page, so check the CRA page for your own situation.
We can’t cover provincial incorporations here. Ontario, British Columbia and the other provinces each have their own statute, and we haven’t confirmed their thresholds. If you’re not sure which law applies, look at your articles of incorporation first.
Where this information comes from
The thresholds and accountant rules come from Corporations Canada, part of Innovation, Science and Economic Development Canada, linked above. The T3010 timing comes from the Canada Revenue Agency. Payroll and sales tax examples come from this site’s calculators, which use 2026 rates. This site isn’t tied to any government body.
Frequently asked questions
Does every non-profit need an audit?
No. For federal corporations it depends on revenue and on whether the corporation is soliciting. Smaller ones can have a review engagement instead.
Who appoints the auditor?
Members appoint the public accountant by ordinary resolution.
Can a board member's firm do the audit?
No. The accountant has to be independent of the corporation, its affiliates, directors and officers.
Do provincial non-profits follow the same thresholds?
Not necessarily. Each province has its own law, and we haven't confirmed those figures, so check your statute.
Do charities file audited statements with the CRA?
The T3010 is due within six months of the fiscal year end. We didn't find an audit rule on the CRA overview page, so read it for your case.
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