Accounting Standards Board
Terms of Reference

 (Approved by the Accounting Standards Oversight Council on June 4, 2010, and amended by the Council on June 21, 2013 and February 28, 2014)

Mission

1.
The Accounting Standards Board (AcSB) serves the public interest by establishing standards and guidance for financial reporting by all Canadian entities outside the public sector and by contributing to the development of internationally accepted financial reporting standards. The mission of the AcSB shall be to support informed economic decision-making by maintaining a framework that provides a basis for high-quality information about financial performance reported by Canadian private sector entities.

    

Objectives

2.
The AcSB shall have the following objectives:
 a.
To establish financial reporting standards and guidance that improve the quality of information reported by Canadian entities, principally annual and interim general purpose financial statements, with due consideration for the costs and the benefits to the preparers and users of financial statements of different categories of reporting entity, and changes in the economic environment.
 b.
To facilitate the capital allocation process in both the business and not-for-profit sectors through improved information.
 c.
To participate with other standard setters in the development of a single set of high-quality internationally accepted financial reporting standards.
 d.
To support the implementation of financial reporting standards and the resolution of emerging application issues
  
3.
In meeting its objectives, the AcSB shall be committed to:
 a.
Meeting the differing financial reporting needs of various categories of reporting entities, in particular publicly accountable enterprises, private enterprises and not-for-profit organizations.
 b.
Providing high-quality standards that promote confidence in reported financial information.
 c.
Respecting and encouraging input from all of its stakeholders.
 d.
Bringing objectivity to the consideration of issues.
 e.
Respecting the ability of its stakeholders to exercise professional judgment.
 f.
Responding to stakeholder needs in a timely manner.
 g.
Improving the process of standard setting.
 h.
Acting as thought leaders on financial reporting issues.

Responsibilities

4.
The AcSB shall have the following responsibilities:
 a.
To develop or adopt financial reporting standards and guidance on its own authority, when satisfied as to need, usefulness and practicality, following a review of financial reporting concepts and practice and a process of consultation with affected parties and debate (due process).
 b.
To implement effective working processes for all projects and activities. The AcSB may commission task forces, advisory groups, consultative groups or study groups to aid in the development of financial reporting standards, guidelines or other material.
 c.
To undertake research and encourage research by others in support of the development of financial reporting standards.
 d.
To communicate with, and seek input from, stakeholders on a timely basis.
 e.
To account to the Accounting Standards Oversight Council (“AcSOC”) for the effective, efficient and economical fulfillment of its mission and objectives. The AcSB shall submit plans and performance reports annually to the AcSOC to demonstrate how it is meeting its responsibilities. The AcSB shall give due consideration to the input from, and recommendations of, the AcSOC in carrying out its work.
 f.
To advise the AcSOC as to the human and financial resources needed to accomplish the AcSB's objectives.

Membership

5.
Membership of the AcSB shall, except for temporary vacancies, be as follows:
Voting Members
 a.
A paid Chair, appointed on either a full-time or part-time basis; and
 b.
Between nine and 11 volunteer members. A Vice-Chair may be appointed from among the volunteer members to assist in carrying out the role of the Chair.
 Non-Voting Members
 a.
The Vice-President, Standards of the Chartered Professional Accountants of Canada (CPA Canada);
 b.
The Director, Accounting Standards; and
 c.
An individual designated as the liaison between the International Accounting Standards Board and the AcSB.
  
6.
The AcSB's voting members shall be appointed by the AcSOC. Voting members of the AcSB shall be selected and their terms of office set by the AcSOC to ensure that the AcSB has an appropriate balance of competencies and experiences to meet its objectives.
   
7.
The role of the Chair shall include:
 a.
Presiding over meetings of the AcSB and communicating with members between meetings, as necessary, concerning the AcSB's activities;
 b.
Serving as a non-voting member of the AcSOC and its committees;
 c.
Serving as one of Canada's representatives at meetings relating to international financial reporting standards;
 d.
Acting as Canada's leading spokesperson and contact on private sector financial reporting standards matters for both the media and the public;
 e.
Representing the AcSB in meetings of other parties involved or interested in the AcSB's activities; and
 f.
Making presentations nationally and internationally on financial reporting matters.
 The Chair may delegate these responsibilities to the Vice-Chair, if one has been appointed, or to the Director, Accounting Standards, except that the responsibilities in sub-paragraph (b) may be delegated only with the agreement of the Chair of the AcSOC.
  
8.
The role of the Vice-Chair, if one has been appointed, shall be to act on behalf of the Chair in a temporary capacity, at the request of the Chair or in his or her absence, in:
 a.
presiding over meetings of the AcSB;
 b.
presiding over meetings of committees of the AcSB that are normally presided over by the Chair and, similarly, attending meetings of other committees of the AcSB that are normally attended by the Chair; and
 c.attending meetings of AcSOC or any of its committees, with the agreement of the Chair of AcSOC.
 The Vice-Chair shall also undertake such other responsibilities as the Chair may delegate to him or her from time to time in accordance with paragraph 7. An appointee to the position of Vice-Chair is not thereby designated as a successor to the current Chair.
9.
Any voting member of the AcSB who either:
 a.
fails to attend more than two meetings of the AcSB in succession; or
 b.
fails to attend, in any twelve-month period, at least 50% of all meetings of the AcSB
 shall, in the absence of extenuating circumstances, cease to be a member of the AcSB as of the end of the meeting at which he or she was in default. The Chair shall make a recommendation to the Nominating Committee of the AcSOC concerning any extenuating circumstances and the Nominating Committee of the AcSOC shall decide whether the defaulting member may continue as a member. A member shall be deemed to be absent from a meeting of the AcSB unless he or she is in attendance for substantially all of it.

Reporting to the AcSOC

10.
The AcSB shall report annually to the public and the AcSOC on its activities.
 
11.
Each year, the AcSB shall present its proposed agenda and project priorities to the AcSOC for comments and shall consider the views and comments of the AcSOC in determining its priorities and agenda. If, for any reason, the AcSB does not wish to incorporate specific views and comments of the AcSOC into its priorities and agenda, the AcSB shall advise the AcSOC as to its reasons and provide the AcSOC with an opportunity to respond. The AcSB shall discuss with the AcSOC any changes to the annual plan and advise the AcSOC of significant decisions made in carrying out the plan.
  
12.
The AcSB shall submit such reports as may be required by the AcSOC from time to time in addition to those otherwise specified in these terms of reference.
   
13.
The AcSB shall review its Terms of Reference and principal operating procedures at least once every three years to ensure that they continue to meet the needs of the AcSB and the public. The AcSB shall report the results of these reviews to the AcSOC.

Operations

14.
The AcSB shall develop a statement setting out the principal operating procedures it shall follow in fulfilling its responsibilities and shall submit the statement of operating procedures for ratification by the AcSOC. The application of those procedures shall be subject to such direction as the AcSOC may provide.

 
15.
The AcSB shall create such committees, including committees of its own members, as it deems necessary in carrying out its responsibilities.

Consultation and Communication

16.
The AcSB shall develop and publish a statement setting out its due process for the development and adoption of financial reporting standards, including communication and consultation with all interested stakeholders.
  
17.
The AcSB shall disseminate information about standard-setting activities, together with invitations to the public to provide input on those activities.
 
18.
The AcSB shall support the development of examples and guidance to assist stakeholders in understanding and applying financial reporting standards consistently.