Public Sector Accounting Board
Terms of Reference

(Revised and approved by the Accounting Standards Oversight Council on February 24, 2017)


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 PSAB is 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. PSAB has the following objectives:
    (a) 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 entities, and changes in the economic environment.
    (b) To facilitate the resource allocation process in the public sector through the provision of improved financial information.
    (c) To participate with other standard setters in the development of high-quality internationally accepted public sector financial reporting standards.
    (d) To support the implementation of financial reporting standards and the resolution of emerging application issues.
     
  2. In meeting its objectives, PSAB is committed to the following:
    (a)    Meeting the financial reporting needs of public sector entities.
    (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) Seeking ongoing improvement to the process of standard setting.
    (h) Acting as thought leaders on financial reporting issues.

Responsibilities

  1. PSAB has 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 contribute to and work to influence the development of International Public Sector Accounting Standards.
    (c) To implement effective working processes for all projects and activities. 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.
    (d) To undertake research and encourage research by others in support of the development of financial reporting standards.
    (e) To be accountable to stakeholders by responding to them in a timely manner, and facilitating their participation and input into the development of standards that affect them.
    (f) To account to the Accounting Standards Oversight Council (AcSOC) for the effective and efficient fulfillment of its mission and objectives. PSAB submits plans and performance reports annually to AcSOC to demonstrate how it is meeting its responsibilities. PSAB gives due consideration to the input from, and recommendations of, AcSOC in carrying out its work.
    (g) To advise AcSOC as to the human and financial resources needed to accomplish PSAB's objectives.

Membership

  1. The membership of PSAB is, except for temporary vacancies, as follows:
    (a)    A compensated Chair, appointed on either a full-time or part-time basis.
    (b) Between 10 and 12 volunteer members. A Vice-Chair may be appointed from among the volunteer members to assist in carrying out the role of the Chair.
     
  1. The following have a right to attend and participate in PSAB meetings and receive any meeting materials:
    (a)    The Vice-President, Standards of the Chartered Professional Accountants of Canada (CPA Canada).
    (b) The Director, Public Sector Accounting Standards.
       
  1. PSAB's members are appointed by AcSOC. Members of PSAB are selected and their terms of office set by AcSOC to ensure that PSAB has an appropriate balance of competencies and experiences to meet its objectives.
      
  2. The Chair plays a crucial role in the standard-setting process. The Chair takes the lead role in ensuring the performance of PSAB’s responsibilities detailed in paragraph 4. This includes the following:
    (a)    Presiding over meetings of PSAB and communicating with members between meetings, as necessary, concerning PSAB's activities.
    (b) Attending meetings of AcSOC and its committees.
    (c) Acting as Canada's leading spokesperson and contact on public sector financial reporting standards matters for both the media and the public.
    (d) Representing PSAB in meetings of other parties involved or interested in PSAB's activities.
    (e) 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, Public Sector Accounting Standards, except that the responsibilities in sub-paragraph (b) may be delegated only with the agreement of the Chair of AcSOC.
       
  1. The role of the Vice-Chair, if one has been appointed, is 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 PSAB;
    (b) presiding over meetings of committees of PSAB that are normally presided over by the Chair and, similarly, attending meetings of other committees of PSAB 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 also undertakes such other responsibilities as the Chair may delegate to him or her from time to time in accordance with paragraph 8. An appointee to the position of Vice-Chair is not thereby designated as a successor to the current Chair.
      
  1. Any member of PSAB who either:
    (a)    fails to attend more than two meetings of PSAB in succession; or
    (b) fails to attend, in any twelve-month period, at least 50 per cent of all meetings of PSAB
    in the absence of extenuating circumstances, will cease to be a member of PSAB as of the end of the meeting at which he or she was in default. The Chair makes a recommendation to the Nominating Committee of AcSOC concerning any extenuating circumstances and the Nominating Committee decides whether the defaulting member may continue as a member. A member is deemed to be absent from a meeting of PSAB unless he or she is in attendance for substantially all of it.

Reporting to AcSOC

  1. PSAB reports annually to AcSOC and the public on its activities, including its risk management process.
      
  2. Each year, PSAB presents its proposed agenda and project priorities to AcSOC for comments and considers the views and comments of AcSOC in determining its priorities and agenda. If, for any reason, PSAB does not wish to incorporate specific views and comments of AcSOC into its priorities and agenda, PSAB advises AcSOC as to its reasons and provides AcSOC with an opportunity to respond. PSAB discusses with AcSOC any changes to the annual plan and advises AcSOC of significant decisions made in carrying out the plan.
      
  3. PSAB is accountable to AcSOC to demonstrate that it has used the resources allocated to it effectively and efficiently and that it has assessed how well it is meeting its mission.
      
  4. PSAB submits such reports as may be required by AcSOC from time to time in addition to those otherwise specified in these Terms of Reference.
      
  5. PSAB reviews its Terms of Reference and principal operating procedures at least once every three years to ensure that they continue to meet the needs of PSAB and the public. PSAB reports the results of these reviews to AcSOC.

Operations

  1. PSAB develops a statement setting out the principal operating procedures it follows in fulfilling its responsibilities and submits the statement of operating procedures for ratification by AcSOC. The application of those procedures is subject to such direction as AcSOC may provide.
         
  2. PSAB will create such committees, including committees of its own members, as it deems necessary in carrying out its responsibilities.

Consultation and Communication

  1. PSAB develops and publishes Due Process Procedures setting out its due process for the development and adoption of financial reporting standards and guidance, including communication and consultation with all interested stakeholders.
       
  2. PSAB disseminates information about standard-setting activities, together with invitations to the public to provide input on those activities.
      
  3. PSAB supports the development of examples and guidance to assist stakeholders in understanding and applying financial reporting standards consistently.