Spot Checks are an integral part of RIBO’s public protection mandate, as they involve a review of a brokerage’s operations and financial records to ensure compliance with the RIB Act, Regulation 991 and other applicable by-laws and guidelines.
If a brokerage has been selected for a Spot Check, a RIBO auditor will call to inform the Principal Broker and explain the process. After the call, the Principal Broker will receive an email with links to modules they must complete by a deadline.
Typically, there are several modules to be completed, and each covers a specific area within a firm. Some examples include office processes, financials, records and disclosure.
Sometimes, auditors may also conduct an on-site brokerage visit to meet the Principal Broker in person and to collect additional documents and information.
After the Principal Broker has submitted all the completed modules, the auditor reviews the information. They may request more information and/or require firms to complete additional modules. Generally, auditors will request a meeting with each Principal Broker to discuss the Spot Check.
Firms will be informed in writing of the Spot Check outcome. Where appropriate, auditors will work with brokerages to resolve minor deficiencies. Spot Checks that raise any serious regulatory issues that are deemed to be a high risk to the public will be referred to the Investigations Department.
For the Spot Check, Principal Brokers may be asked to provide the following information to the Compliance Auditor for review:
- Balance Sheet
- Income and Expense Statement
- Aged Accounts Receivable Listing
- Bank Statements and corresponding Bank Reconciliations
- Cancelled Cheques (Trust and General Accounts)
- Trust Investment documents
- Insurer Accounts Payable Listing
- Receipts and Disbursement journals
- Prepaid Premium Listing
- Retail Sales Tax Remittance file
- General Ledger
- Most recent externally prepared Financial Statements (including any year-end adjusting entries)
- Working papers prepared by external accounting sources to complete Position Reports
- Supporting documentation for Shareholder Loans/Advances
- Disclosure of Facts provided to Insureds indicating Potential Conflict(s) of Interest
- Point of Sale Commission Disclosure statement provided to Insureds
- Client Consents for any Unlicensed Insurance used
- Listing of all Markets including Sub-Brokers, Intermediaries, etc.
- Current Errors and Omissions insurance and Fidelity Bond policies
- Continuing Education compliance certificates for the previous two terms of October to September for all licensed individuals