The Independent Review Committee on Standard Setting in Canada issued its final recommendations report on March 1, 2023. The recommendations aim to ensure Canadian accounting and auditing – and now sustainability reporting and assurance – standard setting continues to be independent and internationally recognized. A summary feedback statement will soon be issued, outlining the feedback the committee received during its consultation process.
The Accounting Standards Oversight Council (AcSOC) and Auditing and Assurance Standards Oversight Council (AASOC), with support from Chartered Professional Accountants of Canada (CPA Canada), initiated a review of Canadian standard setting in 2021. This led to the formation of the committee, which reviewed the governance and structure for establishing Canadian standards and worked to identify what might be needed for the future.
“We want to thank the committee for the rigorous review process they led,” says Kevin Nye, AASOC chair. “The final report illustrates the extent of the consultations that were undertaken with organizations and individuals throughout the country, as well as the committee’s own research and work.”
The importance of independence
The committee issued 26 recommendations that aim to ensure the structure and oversight of standard setting continues to have a sustainable funding model and processes that are effective and responsive to the public interest.
“A key focus for the committee was the importance of independence, both real and perceived, in establishing standards given the role they play in fostering a common understanding of organizational performance and risks,” says Ed Waitzer, committee chair. “These standards impact the welfare of all Canadians and are a public good, requiring processes that are proactive, adaptive, participatory, responsive, and transparent.”
Fit for the future
An early recommendation that was already issued by the committee and approved by the oversight councils was the establishment of the Canadian Sustainability Standards Board (CSSB), which will soon be operational.
“The pace of change is clear, and Canada's continued ability to develop timely, high-quality standards that are relevant to organizations' reporting needs is critical to our economy,” says Lorraine Moore, AcSOC chair. “Implementation of some recommendations is already underway, and we are committed to moving forward quickly with others.”
In addition to the establishment of the CSSB, implementing recommendations regarding effective oversight of standard setting is now underway – beginning with a joint effectiveness review of the current oversight councils that aims to streamline and harmonize current oversight activities and processes.
Next steps
CPA Canada has agreed to continue its funding support of standard setting, including supporting next steps associated with implementing the committee’s recommendations.
For further information:
Daniella Girgenti, Director, Communications - Standards, Financial Reporting & Assurance Standards Canada, [email protected], 416-204-3482