Public Sector Accounting Board
Terms of Reference

(Approved by the Accounting Standards Oversight Council on June 4, 2010, and amended by the Council on June 21, 2013, February 28, 2014 and February 20, 2015)


Mission

  1. The Public Sector Accounting Board (PSAB) serves the public interest by establishing standards and other guidance for financial reporting by all Canadian entities in the public sector and by contributing to the development of internationally accepted public sector financial reporting standards. The mission of the PSAB shall be to contribute to supporting informed decision-making and accountability by maintaining a framework that provides a basis for high-quality information about organizational performance reported by Canadian public sector entities.

Objectives

  1. The PSAB shall have the following objectives:
    1. To establish financial reporting standards and guidance that improve the quality of information reported by Canadian public sector entities, with due consideration for the costs and the benefits to the preparers and users of financial reports of different categories of reporting entity, and changes in the economic environment.
    2. To facilitate the resource allocation process in the public sector through improved information.
    3. To participate with other standard setters in the development of a single set of high-quality internationally accepted public sector financial reporting standards.
    4. To support the implementation of financial reporting standards and the resolution of emerging application issues.
  1. In meeting its objectives, the PSAB shall be committed to:
    1. Meeting the financial reporting needs of governments and various categories of government organizations.
    2. Providing high-quality standards that promote confidence in reported financial information.
    3. Respecting and encouraging input from all of its stakeholders.
    4. Bringing objectivity to the consideration of issues.
    5. Respecting the ability of its stakeholders to exercise professional judgment.
    6. Responding to stakeholder needs in a timely manner.
    7. Improving the process of standard setting.
    8. Acting as thought leaders on financial reporting issues.

Responsibilities

  1. The PSAB shall have the following responsibilities:
    1. To develop or adopt financial reporting standards and other 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).
    2. To implement effective working process for all projects and activities. The PSAB may commission task forces, advisory groups, consultative groups or study groups to aid in the development of financial reporting standards, guidelines or other material.
    3. To undertake research and encourage research by others in support of the development of financial reporting standards.
    4. To communicate with, and seek input from, stakeholders on a timely basis.
    5. To account to the Accounting Standards Oversight Council ("AcSOC") for the effective, efficient and economical fulfillment of its mission and objectives. The PSAB shall submit plans and performance reports annually to the AcSOC to demonstrate how it is meeting its responsibilities. The PSAB shall give due consideration to the input from, and recommendations of, the AcSOC in carrying out its work.
    6. To advise the AcSOC as to the human and financial resources needed to accomplish the PSAB's objectives.

Membership

  1. Membership of the PSAB shall, except for temporary vacancies, be as follows:
    Voting Members
    1. A paid Chair, appointed on either a full-time or part-time basis; and
    2. Ten to twelve volunteer members. A Vice-Chair may be appointed from among the volunteer members to assist in carrying out the role of the Chair.
  2. Non-Voting Members
    1. The Vice-President, Standards of the Chartered Professional Accountants of Canada (CPA Canada); and
    2. The Director, Public Sector Accounting Standards.
  1. The PSAB's voting members shall be appointed by the AcSOC. Voting members of the PSAB shall be selected and their terms of office set by AcSOC to ensure that the PSAB has an appropriate balance of competencies and experiences to meet its objectives.
  1. The role of the Chair shall include:
    1. Presiding over meetings of the PSAB and communicating with members between meetings, as necessary, concerning the PSAB's activities;
    2. Serving as a non-voting member of the AcSOC and its committees;
    3. Acting as Canada's leading spokesperson and contact on public sector financial reporting standards matters for both the media and the public;
    4. Representing the PSAB in meetings of other parties involved or interested in the PSAB's activities; and
    5. Making presentations nationally and internationally on financial reporting matters.
  2. The Chair may delegate these responsibilities to the Vice-Chair, if one has been appointed, or to the Director, Public Sector Accounting Standards, except that the responsibilities in sub-paragraph (b) may be delegated only with the agreement of the Chair of the AcSOC.
  1. 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:
    1. presiding over meetings of the PSAB;
    2. presiding over meetings of committees of the PSAB that are normally presided over by the Chair and, similarly, attending meetings of other committees of the PSAB that are normally attended by the Chair; and
    3. attending meetings of AcSOC or any of its committees, with the agreement of the Chair of AcSOC.
  2. 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.
  1. Any voting member of the PSAB who either:
    1. fails to attend more than two meetings of the PSAB in succession; or
    2. fails to attend, in any twelve-month period, at least 50% of all meetings of the PSAB
  2. shall, in the absence of extenuating circumstances, cease to be a member of the PSAB 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 shall decide whether the defaulting member may continue as a member. A member shall be deemed to be absent from a meeting of the PSAB unless he or she is in attendance for substantially all of it

Reporting to AcSOC

  1. The PSAB shall report annually to the public and the AcSOC on its activities.
     
  2. Each year, the PSAB 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 PSAB does not wish to incorporate specific views and comments of the AcSOC into its priorities and agenda, the PSAB shall advise the AcSOC as to its reasons and provide the AcSOC with an opportunity to respond. The PSAB shall discuss with the AcSOC any changes to the annual plan and advise the AcSOC of significant decisions made in carrying out the plan.
     
  3. The PSAB 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.
     
  4. The PSAB 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 PSAB and the public. The PSAB shall report the results of these reviews to the AcSOC.

Operations

  1. The PSAB 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 AcSOC may provide.
        
  2. The PSAB shall create such committees, including committees of its own members, as it deems necessary in carrying out its responsibilities.

Consultation and Communication

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