C S E G AN N U AL RE P O R T 2 0 17 37 DIR E C T O R S R EP O R T S FI N A N CI A L S INDEPENDENT A U D I T O R S R E P O R T To the Mem bers of Canadian Society o f E x p l o r a t i o n G e o p h y sicists I have audited the accompany ing financial statements of Canadian Society o f Exploration G e o p h y sicists which comprise the statement of financial position as at December 31 2016 a nd the statements of revenues and expenditures and changes in net assets and cash flows f o r the ye ar then ended and a s u mm a r y o f s i g n i f i c a n t a c c o u n t i n g p o l i c i e s a n d o t h e r e x p l a n a t o r y information Managem ents Responsibility for the Financial Statements Managem ent is responsible f o r the preparation and fair presentation of these financial statements in accordance with Canadian accounting s t a n d a r d s f o r notforprofit organizations and f o r such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error Auditors Responsibility My r esponsibility i s to express an opinion on these financial statements based on my a udit I c onducted my a udit i n accordance with Canadian generally a ccepted auditing standards Those s t a n d a r d s r e q u i r e that I c om ply w ith ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement An audit involves performing procedures to obtain audit evidence about the am ounts and disclosures in the financial statements The procedures selected depend on the auditors judgment including the assessment of the risks of ma terial mi sstatement of the financial statements whether due to fraud or error In ma king those risk assessments the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates ma de by m anagem ent as well as evaluating the overall presentation of the financial statements I b elieve that the audit evidence I h ave obtained is sufficient and appropriate to provide a basis f o r my qualified audit opinion Basis for Qualified Opinion In common with ma ny c haritable organizations the Society d erives revenue from me mb er contributions and activities the completeness of which is not susceptible of satisfactory a u d i t verification Accordingly my v erification of these revenues w a s lim i t e d to the am ounts r e c o r de d in the records of the Society a nd I was n ot able to determine whether any a djustments mi ght be necessary t o contributions excess of revenues over expenses current assets and net assets Qualified Opinion In my o pinion except f o r the effect of adjustments if any which I mi ght have determined to be necessary continues T e l 40 3 2 5 0 27 7 7 Fa x 4 0 3 2 50 2 7 7 4 210 2635 37th Avenue NE Calgary Alberta T1Y 5Z6 1 INDEPE ND E NT A UDI TOR S REPO RT T o the M e m b er s o f C a na dia n S oc ie ty o f Explo r a tio n G e op hy s icists I h ave aud ite d the ac c o m p any in g f i nanc i al state m en ts of Ca nadia n Socie ty of Explo r a tio n G e oph y s icists w hich c o m p r ise th e s t atem e nt o f f in anc i al pos i tio n a s a t De c em b er 31 2 017 a nd t he state m en ts o f r e ve nue s a nd e x pe ndit ur e s a nd chan ges in net ass ets a nd c a s h f lo w s f or the y e ar the n ende d and a s u m m a r y o f s ig nific a nt a c c o untin g poli c ie s and othe r ex p la nato r y in f or m atio n Ma nag em en t s R e s p ons i bil ity f o r th e F i nanc i al Sta tem e nts Ma nag em en t is r e s p ons i ble f o r th e p r e par a tio n a nd f a ir pr e s en tatio n of t hes e f i nancia l s tate m e nts in ac cor d anc e w it h Can adia n ac c o un tin g stan dar d s f o r not f o r p r of it o r g aniz a tio ns and f or s uc h i nter n al c o ntr o l a s m a na gem e nt de ter m i nes i s ne c es sar y to ena ble the pr e par a tio n of f in a nc ia l s ta tem e nts that a r e f r e e f r o m m a ter i al m iss ta tem e nt w heth er d ue to f r au d or er r o r A udit or s R e s po ns ib il it y My r es p ons i bil ity is t o e x p r es s a n o pin io n o n t hes e f i nan c ia l s t atem e nts ba s ed o n my aud it I c o nduc t ed my aud it in ac cor da nc e w it h Can adia n gene r all y ac c e pte d aud iti ng s ta nda r ds T hos e s ta nda r ds r e qu ir e th at I c o m p ly w ith ethica l r e quire m en ts a nd p la n a nd p er f or m the aud it t o ob tain r e as o nab le as sur a nc e ab out w he ther the f in a nc ia l s ta tem e nts ar e f r e e f r o m m ater ia l m i s s ta tem e nt A n a udit in v olv es per f o r m i ng p r o c ed ur es to o bta in a udit e vi den c e abo ut t he am o unts an d d isc lo s u r e s i n th e f in anc i al state m en ts T h e pr o c e dur e s s e le c te d de pend on th e au dit or s j u dgm e nt i nc lu d in g the as ses sm e nt o f th e r i s k s of m a ter i al m iss t atem e nt of t he f in anc i al s ta tem e nts w he ther due to f rau d o r er ror In m ak i ng tho s e r i s k as ses sm en ts the audit or con s id er s in ter n al c on tr ol r ele v ant to the entit y s pr e pa r atio n an d f air pr e s en tatio n of th e f in anc i al s t atem e nts in or d er to d es i gn aud it p r oc e du r es th at ar e ap pr o pr ia te in t he c irc u m s t anc e s bu t n ot f or the p ur p os e o f ex p r es sin g an o pin io n o n the e f f ec t iv ene s s of th e en tity s in ter n al c on tr ol A n a ud it also i nc lu d es e va lu atin g th e a ppr o pr ia te nes s o f ac cou ntin g p oli c ie s us e d and t he re as on able n es s of ac c o unti ng e s t im a tes m a de by m ana gem e nt as we l l as eva lu a tin g t he ov er a ll pr e s e ntatio n of th e f in an c ia l s tate m en ts I be lie v e tha t the a udit ev id enc e I h ave o btain ed is s u f f icie nt a nd a ppr o pr ia te to p r ov id e a b as i s f o r my qu ali f ie d au dit opin io n B as is f o r Q u ali f ie d Opin io n In c om m on w it h m any c h ar it ab le or g an iz atio n s t he S oc i ety d er iv e s r e ve nu e f r o m m em b er c on tr ib utio n s an d ac tiv i tie s the com p le tene s s of w hich is not sus c e ptib le o f s ati s f ac t or y au dit ve r if i c atio n Ac cor d in gly my v er i f ic a tio n of th es e r e ve nu es w a s l im ite d to th e a m o unts r ec o r d ed i n th e rec o r d s o f th e S oc i ety a nd I wa s n ot ab le to d eter m i ne w he ther a ny a dj us t m en ts m i ght b e ne c es sar y to c o ntr ib u tio ns e x ces s of r e ve nue s ov er e x pe ns e s c u r r e nt as sets and net a s s e ts Quali f ie d O p in io n I n my opin io n ex cept f or the e f f ec t o f adj u s tm e nts i f a ny w hich I m ig h t h av e dete r m in e d to be ne c es sar y ha d I be en ab le t o s a tisf y m y self c o nc e r nin g t he c o m p le teness of th e c on tr ib utio n s r e f er r e d to in th e pr e c e din g p ar a gr a ph the f i nan c ia l s ta tem e nts pr e s ent f airly in all m a ter ia l r e s p ec ts t he f in anc i al po s it io n of Can adia n S oc i ety of E x p lo r atio n Geop hy s icists a s at Dec e m b er 3 1 2 017 a nd th e r e s ult s of it s op er a tio ns an d i t s c as h f l ow s f o r the ye a r th en e nde d i n a c c o r d anc e w it h Can adia n ac coun tin g stan dar d s f o r not f o r p r of i t or g aniz a tio ns Calg a r y Al ber ta Ma r c h 22 2 018 CHART E RE D A C COU NT ANT T el 4 03 2 50 27 77 F a x 4 03 2 5 027 74 2 10 26 3 5 37 th A v e n ue NE C a lg a r y A lbe r ta T 1 Y 5 Z 6 1