Accounting Standards Oversight Council
Report on Public Meeting
March 1-2, 2018
Accounting Standards Oversight Council (AcSOC) discusses the activities of the
Accounting Standards Board (AcSB), the Public Sector Accounting Board (PSAB) and related matters.
At its meeting in Toronto on March 1-2, 2018, AcSOC received presentations on, and discussed, the following:
Opening Remarks and Livestreaming
Update on International Accounting Matters
The AcSB’s Standard-setting Process
The Relevance of Audited Financial Statements to Analysts
PSAB’s International Strategy
Public Private Partnerships
Proposed Changes to the Governance and Oversight of International Audit and Ethics Standards
AcSOC Risk Assessment
Report on AcSOC Members’ Attendance at AcSB Meetings
AcSOC Chair Peter Jewett extended a special welcome to those observing the meeting via the livestreaming video platform.
He commented that Brian Fiedler, Dale Gislason, Neil Le Blanc and Bob Muter would be completing their terms on the Council as of March 31, 2018, and thanked them for their service and valuable contributions.
Sheila Fraser, Vice-Chair IFRS® Foundation Trustees, provided an update on several matters discussed at the Trustees’ meetings held in Hong Kong on January 31-February 1, 2018.
These matters included the following:
- The IFRS Foundation appointed seven new Trustees for three-year terms commencing January 1, 2018. Ms. Fraser noted that women make up about 30 per cent of the membership of each of the IFRS Foundation and International Accounting Standards Board (IASB).
- The IFRS Foundation has appointed Lee White as its Executive Director, in charge of the organization’s day-to-day operations. Most recently, Mr. White was the inaugural Chief Executive Officer of Chartered Accountants Australia and New Zealand. He succeeds Yael Almog, who stepped down in mid-2017.
- The IFRS Foundation and its constituent bodies plan to move to new premises in London in August 2018. The Foundation’s entry into a 10-year lease indicates its commitment to remain in London.
- Regarding Brexit’s effect on IFRS Foundation employees, European Union (EU) citizens who have lived in the U.K. for at least five years will be able to apply for settled status once the U.K. withdraws from the EU. Those with fewer than five years’ residence will be able to apply once they reach the five-year-residence mark.
- The Due Process Oversight Committee discussed a staff paper on the outline, scope and timetable for the review of the IASB Due Process Handbook. Regarding the scope, the Committee decided that the focus should be on how the review of the Handbook could best serve the IASB’s future agenda and stakeholders’ evolving needs and expectations.
- Regarding the timetable, they discussed the importance of balancing the need to consult widely with the objective of completing the project on a timely basis.
- The Trustees received very favourable feedback on the 2017 IFRS Conference: Americas, which the AcSB hosted in Toronto.
- Regarding the IASB’s technical activities, Ms. Fraser’s remarks included the following:
- The revised Conceptual Framework project is on track to be issued in March 2018.
- The Transition Resource Group for Insurance Contracts to support the implementation of IFRS17 Insurance Contracts has met twice. The IASB also published four educational webcasts on IFRS 17.
- The IASB is focused on investor engagement. The staff and IASB members are continuing to conduct investor-education sessions.
- The IASB added to its November 2017 agenda a project to revise and update the IFRS Practice Statement Management Commentary that was issued in 2010.
- The IASB is finalizing its Discussion Paper, “Financial Instruments with the Characteristics of Equity,” which is scheduled to publish in the second quarter of 2018.
Ms. Fraser’s responses to questions included the following:
- The IASB has no plans to add its agenda the topic of non-GAAP measures used in financial reporting.
- Regarding the timeline for IFRS 17 implementation, this is a very complex standard. Canada is well placed to implement the standard, but many countries will find it challenging, particularly as the necessary accounting software is unlikely to be available for some time. The IASB is aware of stakeholders’ challenges.
- She commented on the IFRS Foundation Trustees’ location and noted that it is unusual to appoint as many as seven Trustees in one year.
- Although the term of the current Foundation Chair, Michel Prada, ended on December 31, 2017, it was extended until a successor assumes office. The search for his successor is underway and a decision will likely be made in June 2018.
Mr. Jewett thanked Ms. Fraser for her comprehensive update.
AcSB Chair Linda Mezon commented on the AcSB’s recent activities, stating that the AcSB is achieving its strategic objectives by connecting with key parties, opening and continuing dialogues, both domestically and internationally, recruiting quality volunteers and advancing its projects. She commented that the AcSB is leveraging its relationships and outreach activities with national standard setters and other key parties.
In particular, she said that the AcSB’s Insurance Transition Resource Group recruited individuals with broad representation from across Canada. The Group held a successful initial meeting. In addition, the AcSB engaged a strong team of volunteers to field test its proposed agriculture standard for Part II of the CPA Canada Handbook – Accounting.
The AcSB has endorsed IFRS 17 Insurance Contracts, which is now included in Part I of the Handbook. The knowledge base in Canada is more robust than that in most other jurisdictions, and Canada is therefore in a good position to implement the standard.
The AcSB’s risk attached to this project, and a key focus, continues to be whether there will be a delay in the endorsement processes in Europe. The AcSB stands ready to act so that Canada will not implement the new standard on its own. The AcSB continues to press for a global adoption date.
The AcSB is devoting considerable time and effort monitoring developments on this topic, and is in regular contact with the IASB. The AcSB is also monitoring the U.S. Financial Accounting Standards Board’s project on insurance.
An AcSOC member who is a member of the Actuarial Standards Oversight Council, which oversees the Canadian Institute of Actuaries, advised that the International Actuarial Association has exposed its model standard of actuarial practice (ISAP 4) being developed to accompany IFRS 17. She said that the Exposure Draft is open for public comment until June 30, 2018, and that a final standard is expected by the end of 2018.
Supporting the implementation of new standards
The AcSB continues to undertake various activities to support Canadian preparers and auditors in implementing significant new standards on revenue, financial instruments and leases. The AcSB’s activities include raising awareness, publishing non-authoritative material, supporting transition resource groups, socializing issues and raising matters with the IASB and its IFRS® Interpretations Committee.
Raising awareness through the IFRS Discussion Group
To date, the IFRS Discussion Group has posted reports discussing 26 topics to consider when adopting the new standards. Members have also shared views on emerging topics, such as cryptocurrencies and cloud computing. Twenty-three observers were present at the Group’s last meeting in January 2018, including an IASB member and staff.
The IASB continues to develop an accounting model for this topic. After seeking more input from its Accounting Standards Advisory Forum in April 2018, the IASB will decide whether to issue an exposure draft or discussion paper.
The AcSB is considering updating its research paper on the decision-usefulness of financial information that reflects the economics of rate-regulated activities and is reassessing when best to publish the paper.
Private enterprises and not-for-profit organizations
In December 2017, the AcSB completed its deliberations to develop its proposed new standard on agriculture. After reviewing and providing feedback on a preliminary draft of the new Section, the AcSB directed the staff to arrange a fatal-flaw review and a field test of the proposed standard. Twelve participants are assessing how the proposed standard applies to eight different agricultural sectors. The Board will consider this feedback in March 2018 and plans to issue an exposure draft no later than September 2018.
Ms. Mezon said that the proposals require inventory to be measured at cost, unless it meets certain conditions for net realizable value. She commented that the AcSB considered the accounting for cannabis in developing the proposed standard, but has not referred specifically to that product in the standard. She said that fair values for cannabis are subjective, owing to the absence of a developed commodity market. Stakeholders are considering how to apply IAS 41 Agriculture, and the AcSB is monitoring developments on accounting for cannabis.
A few members commented that the accounting for cannabis was similar to the accounting for other agricultural products that take a lengthy time to come to market.
Priorities for Parts II and III of the Handbook
The AcSB priorities are as follows:
- carry out a diagnostic of financial statement concepts to see if they are fit for purpose;
- revenue and contributions for Parts II and III of the Handbook;
- related party transactions;
- combinations when there is no clear acquirer; and
- financial instruments – hedging.
Over the next few years, the AcSB will act as needed, including leveraging work between the Part II and Part III frameworks.
The AcSB’s compliance with due process
Members were advised that there were no reportable departures from due process or “comply or explain” actions, nor was there any unusual event in the application of due process during the October 2017 to January 2018 period.
2017-2018 Performance Report
Rick Neville, the Performance Review Committee Chair, said that his predecessor, long-time Committee Chair Bob Muter, and Neil Le Blanc would be completing their terms with AcSOC and the Committee on March 31, 2018, and thanked them for their dedicated service and excellent work. He noted that Marie Giguère and Tom Linsmeier had joined the Committee.
Mr. Neville stated that, at a Committee meeting, members reviewed the AcSB’s draft Performance Report in detail and provided their observations to the AcSB’s Chair and Director. Committee members agreed that the AcSB is having a successful year.
Ms. Mezon prefaced her remarks by thanking Mr. Muter for his wise council and support over the years.
She provided some highlights from the AcSB 2017-2018 Performance Report, including the following key successes:
- the high level of engagement with stakeholders, including numerous roundtables, meetings, webinars and presentations;
- progress on domestic standard-setting projects, including significant progress on the Part II Agriculture project; and
- a strong presence on the international stage, including hosting the 2017 IFRS Conference: Americas, in Toronto.
Ms. Mezon discussed two major challenges the AcSB faces:
- Time to market:
- A persistent challenge for all standard setters.
- Timely execution of projects has continued to be a focus for the AcSB.
- Keeping pace with technological change:
- It is critical that the AcSB continues to use technology efficiently and effectively, both in its interactions with stakeholders and in its internal processes.
Mr. Neville said that the final performance report will be presented to the Performance Review Committee in April 2018. It will then be presented to the full Council at its meeting on June 7-8, 2018, for its input and assessment of the AcSB’s performance during the year ended March 31, 2018.
Draft 2018-2019 Annual Plan
Mr. Neville said that the Performance Review Committee discussed the AcSB’s 2018-2019 draft annual plan and provided its observations to the AcSB Chair and Director. The Committee was pleased with the document’s format and succinct content. Committee members agreed that the draft annual plan provided a basis for the Committee to assess the AcSB’s performance for the year ended March 31, 2019.
Ms. Mezon commented that several environmental factors have resulted in changes to the risks the AcSB faces. The increasing focus on the relevance of financial statements is a newly reported risk, as is the time taken to produce and publish new standards. Regarding residual risks, the AcSB is considering whether to reduce the risk level attached to its involvement in international standard setting and to its reputation, given the effectiveness of mitigating controls.
Ms. Mezon said that the Annual Plan’s performance indicators focused on qualitative and quantitative factors. She also stated that the Plan’s objectives are derived from the AcSB’s 2016-2021 Strategic Plan and commented that four new priority areas were recently identified:
- relevance of financial statements;
- leveraging technology and being innovative;
- expanding the Board’s involvement with national standard setters; and
- engaging with stakeholders.
Ms. Mezon also stated that the AcSB is focused on gaining traction in developing its research program.
AcSB Director Rebecca Villmann discussed the staff’s effectiveness and development, and the actions taken because a third of the staff has fewer than two years’ standard-setting experience.
AcSOC’s comments included that the AcSB should consider:
- the pervasive issue of the “cost to raise a dollar” faced by not-for profit organizations; and
- conducting an AcSB reputation survey.
Mr. Jewett thanked Mr. Neville and Committee members for their extensive and dedicated work. He noted the substantial improvement in the reports’ clarity and usefulness, and asked Ms. Mezon to thank the staff for the tangible progress made to address the AcSB’s challenges.
Ms. Villmann requested AcSOC’s input on an updated AcSB due process document for the AcSB’s consideration. The AcSB plans to approve a final version of the document at its March 2018 meeting.
She commented that there are no fundamental changes to due process. Redundant and information unrelated to the standard-setting due process has been removed, making the document shorter. The document focuses on using plain language to make it more understandable. In addition, the title has been changed from the AcSB Due Process Handbook to the AcSB Due Process Manual to avoid confusion with the CPA Canada Handbook. The AcSB also decided that it is unnecessary to expose the Manual given there are no substantive changes to the due process.
AcSOC made several minor suggestions for the AcSB’s consideration. Mr. Jewett thanked the AcSB Chair and Director for revising the Manual and substantially improving its clarity and usefulness.
Ms. Mezon stated that the AcSB and AcSOC have discussed the relevance of private sector entity audited financial statements for some time. The AcSB thinks that it should provide leadership on this matter, noting that multiple initiatives are required from all parties involved, including preparers, directors, auditors and users.
Ms. Mezon said that to enhance the usefulness of corporate performance measures, they should be transparent, consistent, and comparable. Ideally, a framework with influential supporters should be developed, and efforts made to build its acceptance. The AcSB has reached a verbal understanding with FEI Canada to work together on this topic.
Ms. Mezon suggested that a useful framework would assist in other initiatives, such as:
- looking at how GAAP can provide a better starting point;
- developing measures by industry in collaboration with relevant parties; and
- applying the framework to the not-for-profit sector to address the question of the “cost to raise a dollar.”
Ms. Villmann said that the AcSB is looking to involve others, including leveraging CPA Canada as an independent body, to assist with the work, which will be non-authoritative. She commented that performance measures should be relevant, representative and reliable, and should be focused on value creation.
Ms. Mezon said the AcSB plans to collaborate with experts to develop an initial draft framework by June 2018, adding that the topic is a multi-year initiative.
AcSOC’ comments included the following:
- Members agreed with the AcSB’s proposed approach, including its plan to collaborate with other relevant parties.
- The AcSB should examine the nature of non-GAAP measures in Canada, and investigate the type of reversed income statement items. The member stated that in the United States, reversed amounts are generally categorized as non-operating and non-recurring, and are usually losses.
- Some members cautioned the AcSB to narrow its scope to ensure that this project does not adversely affect its current workload. The project should only address measures linked to financial statements.
- A member asked the AcSB to talk with the Canadian Securities Administrators (CSA). The AcSB Chair noted that the CSA is concerned mainly with management discussion and analysis issues.
Mr. Jewett commented that the AcSB is taking an important first step and asked Ms. Mezon to convey the Council’s thanks to the AcSB.
PSAB Chair Charles-Antoine St-Jean commented on recent key Board activities, including decisions, public interest considerations, and governance and operations matters.
In December 2017, PSAB approved the full Statement of Concepts, “Revised Conceptual Framework for the Canadian Public Sector,” and the full Statement of Principles, “A Revised Reporting Model for the Canadian Public Sector.” PSAB plans to issue the documents for comment in the spring of 2018.
In December 2017, PSAB discussed the responses to the Exposure Draft, “Revenue, Proposed Section PS 3400”. PSAB supported the proposals put forward by its Revenues Task Force. This includes exploring a simplified approach to the proposals to help alleviate some of the application challenges respondents noted, especially regarding transactions involving the granting of rights. PSAB decided to continue with the Revenue project, with the expectation that an update will be provided at its March 2018 meeting and that it will be finalized in June 2018.
Public interest considerations
Timeliness of standard setting
PSAB’s Due Process Procedures document is being updated as part of a broader project to improve the Standards Group’s processes and procedures. The review and update of PSAB’s Due Process Procedures will leverage the AcSB’s work in this area. PSAB anticipates receiving a draft document from the staff in June 2018.
PSAB will receive an update on non-traditional pension plans from its Employment Benefits Task Force at its March 2018 meeting.
The reporting of some rate-regulated transactions by the Ontario and British Columbia governments has come to PSAB’s attention. It is monitoring the situation, and will determine if there are any systemic issues with the relevant Public Sector Accounting Standards.
Public Sector Accounting Discussion Group
The Group’s livestreamed meeting on November 17, 2017, was successful in terms of outreach, stakeholder inclusiveness and engaging observers.
To create greater consistency, PSAB will develop a blueprint (for internal use) detailing the process to develop future guidance on discount rates.
Governance and operations
PSAB has updated its key criteria for evaluating its composition and developed a systematic approach when seeking potential Board members for consideration by AcSOC’s Nominating and Governance Committee.
2017-2020 Strategic Plan
Mr. St-Jean commented on aspects of the five major strategies in PSAB’s 2017-2020 Strategic Plan: the international strategy, the NFPO strategy, the conceptual framework, encouraging stakeholder acceptance of its standards and the public interest.
PSAB is reviewing its approach to International Public Sector Accounting Standards (IPSAS) and is developing a consultation paper for public comment (see below).
To understand further users’ needs for public sector NFPOs, PSAB consulted more than 100 NFPOs across Canada over the past year. PSAB will approve a consultation paper later in 2018. Thereafter, it will develop and implement a NFPO strategy that serves the public interest.
As noted, PSAB plans to issue the documents for public comment in the spring of 2018. Following extensive consultations, two Handbook Sections (PS 1000, Financial Statement Concepts, and PS 1100, Financial Statement Objectives) will be replaced with 10 new chapters. In addition, the Canadian Public Sector Reporting Model will be revised.
2017-2018 Performance Report
Mr. Neville said that, at a Performance Review Committee meeting, the Committee reviewed PSAB’s draft Performance Report in detail and provided its observations to PSAB’s Chair and Director. Committee members agreed with PSAB’s assessment that it is on track to achieve its 2017-2018 Work Plan objectives and its 2017-2020 Strategic Plan.
He commented on PSAB’s key accomplishments, including the following:
- PSAB approved the Statement of Concepts, “A Revised Conceptual Framework for the Canadian Public Sector,” and the Statement of Principles, “A Revised Reporting Model for the Public Sector,” to issue in the spring of 2018.
- PSAB approved a project plan to develop and communicate the options for its International Strategy.
- PSAB’s extensive outreach on public sector NFPOs.
- Timely standard setting – PSAB discussed the importance of providing stakeholders with standards in a timely manner and undertook a number of initiatives.
- Stakeholder engagement – The PSAB Chair and staff continued extensive outreach activities, using multiple channels to reach, engage and receive input from stakeholders.
Mr. Neville also noted PSAB’s challenges regarding the acceptance of its standards. Although PSAB has had success with the PSA Handbook’s acceptance and application, it notices that some governments are legislating a departure from the PSA Handbook’s direction. It also sees a trend toward public sector entities receiving a qualified opinion because of not complying with certain PSA standards.
Mr. Neville said that the final performance report will be presented to the Performance Review Committee in April 2018. The report will then be presented to the full Council at its meeting on June 7-8, 2018, for its input and assessment of PSAB’s performance during the year ended March 31, 2018.
Draft 2018-2019 Annual Plan
Mr. Neville said that the Performance Review Committee discussed PSAB’s 2018-2019 draft annual plan and gave input to the Board Chair and Director. The Committee was pleased with the document’s format and succinct content. Committee members agreed that the draft annual plan appeared to provide a basis for the Committee to assess PSAB’s performance for the year ended March 31, 2019.
The PSAB Chair discussed PSAB’s planned activities and future approval dates, including the timeline for its Conceptual Framework project.
Mr. St-Jean noted members’ comments on aspects of PSAB’s Annual Plan. He said that PSAB would not wait until 2020 (when PSAB plans to be in a position to decide on its international strategy) before attending to important matters that were in the public interest.
Commenting on the risk related to the relevance of PSAB’s standards, Mr. St-Jean noted that the multiplicity of auditor qualifications in government financial statements, and the apparent lack of any consequences, is a troubling development in Canada. PSAB needs to interact with relevant stakeholders on this matter.
Mr. Jewett thanked Mr. Neville and Committee members for their extensive and dedicated work and asked Mr. St-Jean to thank the staff for their efforts and the quality of their work.
Mr. St-Jean said that PSAB’s international strategy is one of the key elements of its 2017-2020 Strategic Plan. PSAB is currently reviewing its approach to IPSAS by researching differences between Canadian Public Sector Accounting Standards and IPSAS. The results of the review will be shared with stakeholders.
PSAB is developing a consultation paper that takes a business-case approach and presents four options for the Board to consider for its international strategy. The paper’s purpose is to solicit stakeholder feedback on whether additional options are required and whether additional criteria should be considered. PSAB intends to learn about the experiences of other jurisdictions that have elected to follow IPSAS. It plans to be in a position to decide on its international strategy by March 2020.
Members considered and commented on an initial draft of the first of two consultation papers.
Bailey Church, Chair of PSAB’s Public Private Partnerships Task Force and the leader of KPMG LLP’s National Public Sector Accounting Advisory service line, presented:
- the key public interest and accounting issues regarding public private partnerships;
- an overview of public private partnerships in Canada; and
- an overview of the key principles of PSAB’s project on this topic.
Public interest considerations
- Canada has a poor record for public-infrastructure maintenance, and there is a major drive for infrastructure with significant economic benefit.
- The Government of Canada has created the Canada Infrastructure Bank, a new Crown corporation. It is an additional resource that provincial, territorial, municipal and Indigenous partners can use to build infrastructure across Canada. The Bank uses federal support to attract private sector and institutional investment to new revenue-generating infrastructure projects that are in the public interest.
- There is no specific Canadian public sector accounting standard for public private partnerships. This can impede decision making because of inconsistent information in financial statements and is a potential barrier to structural investment.
Public Private Partnerships in Canada
- Public private partnerships are long-term performance-based contracts to procure public infrastructure.
- Although the government usually retains ownership and control, public private partnerships combine aspects of planning/design, finance, building and long-term maintenance, for which the private sector assumes a share of the risks.
The PSAB project’s key principles
- The objective is to develop a public sector accounting standard specific to public private partnerships.
- The project’s goal is to develop clear principles for recognizing assets and liabilities and identify how to measure the resulting infrastructure asset and liability.
- PSAB issued the Statement of Principles in July 2017 and plans to approve an exposure draft by September 2018 and issue a final standard by September 2019.
Mr. Church responded to members’ questions, including explaining the project’s boundaries and matters outside the scope of the project.
The Chair and members thanked Mr. Church for an excellent, comprehensive and helpful presentation.
Stephenie Fox, Vice-President, Standards, CPA Canada, provided information about the Monitoring Group’s current review to strengthen the governance and oversight of the international audit and ethics standard-setting boards. Because the outcome could affect standard setting in Canada, it is important that AcSOC be aware of these developments.
The Monitoring Group comprises international financial institutions and regulatory bodies committed to advancing the public interest in areas related to international audit standard setting and audit quality.
The Monitoring Group, which is responsible for the overall governance of the international auditing and ethics standard-setting process and the review of its implementation, effectiveness and responsiveness to the public interest, set up a Working Group in 2015 to consider whether the governance and oversight of the standard-setting process could be further enhanced to serve the public interest.
The Working Group issued its Consultation Paper in November 2017. It proposes changes to strengthen the governance and oversight of the international audit and ethics standard-setting boards. Since the International Standards of Auditing are adopted in Canada, this Consultation Paper is of interest to the Auditing and Assurance Standards Board (AASB) and the Auditing and Assurance Standards Oversight Council (AASOC). The AASB, AASOC and CPA Canada submitted Canadian responses to the Consultation Paper, among other organizations.
A revised consultation paper of final proposals is planned for the fall of 2018.
The Monitoring Group’s concerns include:
- the adverse effect on stakeholder confidence in the audit and ethics standards due to perception of the profession’s undue influence;
- the responsiveness of the audit and ethics standards to the public interest; and
- the relevance and timeliness of these standards.
The Consultation Paper proposes significant changes to the international audit and ethics standard-setting boards and their governance and oversight, including:
- merging the International Audit and Assurance Standard Setting Board and the International Ethics Standards Board for Accountants;
- separating ethics standards for auditors from ethics for other professional accountants;
- reducing the Board size, compensating members, making its function more strategic than technical and expanding its professional technical staff;
- approving consultation papers, exposure drafts and standards by a simple majority; and
- making nominations to the Board independent from the International Federation of Accountants (IFAC) (currently the IFAC Nominating Committee performs the nominations process).
Although stakeholders in Canada generally agree there is room for improvement, there are concerns that the proposals are a disproportionate response. These concerns include:
- a lack of evidence supporting the proposals;
- merging the audit and ethics boards will have negative impact on ethics; and
- a lack of understanding of the urgency.
Ms. Fox asked members to be aware of the proposed changes to the governance and oversight of international audit and ethics standards, because of the following potential effects on accounting standard setting in Canada:
- The profession supports both accounting and auditing standard setting in Canada. The profession could be perceived as having an undue influence on standard setting.
- Ethical standards for professional accountants in business could be different from those for auditors.
- Risk to the International Public Sector Accounting Standards Board’s position in IFAC (which supports public sector standard setting at the international level) as PSAB considers its international strategy.
- A possible trend away from principle-based standards.
Members agreed that the Monitoring Group’s activities detailed in the Consultation Paper are important to AcSOC. They noted that, compared with the situation in other jurisdictions, AcSOC occupies a unique position in the private sector standard-setting world because it controls the nominating and appointment processes for itself and the boards under its aegis. Members agreed that the process to nominate and appoint candidates to the standard-setting boards in Canada was sound.
Ms. Fox said that following the review of each Council’s oversight processes by the AASOC/AcSOC Joint Subcommittee on Oversight of Standard Setting, as stated in previous meeting reports, the staff think that AcSOC should consider assessing its risks.
She discussed two possible approaches if AcSOC undertakes a risk assessment:
- a “purist” approach that would be undertaken, via a series of workshops, with the assistance of an external firm; or
- a “modified purist” approach led by an AcSOC subcommittee, supported by the staff, without the assistance of an external firm.
AcSOC decided to take the “modified purist” approach and to strike an ad hoc AcSOC subcommittee to perform a risk assessment. Because the Joint Subcommittee had encouraged the Councils to collaborate closely on items of mutual interest and relevance, members agreed that if AASOC forms a similar ad hoc committee, both Councils should consider the results of their respective ad hoc committees’ deliberations.
Two members reported on their attendance at recent AcSB meetings. They said the meetings were well run and chaired, and attention was paid to due process. Both members were impressed with the quality of the discussions and the calibre of the participants. They commented on the AcSB members’ ability to concentrate on, and to deal with, the important issues regarding the agenda items.
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The Accounting Standards Oversight Council (AcSOC) is an independent, volunteer body established by the Canadian Institute of Chartered Accountants (CICA)* in 2000. It serves the public interest by overseeing and providing input on the activities of the Accounting Standards Board (AcSB), which sets financial reporting standards for profit-oriented enterprises and not-for-profit organizations, and the Public Sector Accounting Board (PSAB), which sets financial reporting standards for governments and their organizations. AcSOC's responsibilities include appointing the AcSOC, AcSB and PSAB members. Reporting to the public and made up of representatives that include regulators, investors and other users, preparers and auditors of financial reports, AcSOC brings a broad perspective to complex issues facing standard setters in both the private and public sectors.
* The CICA, CGA-Canada and CMA Canada have since consolidated under the CPA Canada banner as the profession’s national body.