PCAOB Concept Release on Auditor Independence and Audit Firm Rotation

On August 16, 2011, the US Public Company Accounting Oversight Board (PCAOB) issued a concept release to solicit public comment on ways that auditor independence, objectivity and professional skepticism could be enhanced.


One possible approach on which the Board is seeking comment is mandatory audit firm rotation, which is explored in detail in PCAOB Release No. 2011-006. However, the Board seeks advice and comment on other approaches as well. Comments should be submitted no later than December 14, 2011. The Board will also convene a public roundtable meeting in March 2012, at which interested persons will present their views. Additional details about the roundtable will be announced at a later date.

Sustainability: Environmental and Social Issues Briefing

Environmental and social issues are increasingly having an impact on the bottom line and future prospects of companies in many industries. They can present both opportunities and risks. In addition, they can have important implications for strategy, competitiveness, risk management, stakeholder relations and business resilience. A company’s board of directors has key oversight responsibilities in relation to environmental and social issues.


Board awareness and attention are essential in keeping abreast of the fast-evolving business impacts of these issues. Sustainability: Environmental and Social Issues Briefing highlights the environmental and social issues directors need to consider, providing an understanding of the potential business implications of these issues and offers questions that directors might ask in discharging their oversight responsibilities.

Global Companies to Lead Unique Integrated Reporting Pilot Program

The International Integrated Reporting Committee (IIRC) has announced that over 40 leading companies from around the world have been chosen as participants in the IIRC Pilot Programme initiative and the number is growing. These global companies, representing various sectors and industries, met for a two day kick-off event in Rotterdam on October 17-18, 2011. This marked the beginning of a two year journey with the IIRC where they will be given the opportunity to demonstrate global leadership in this emerging approach to corporate reporting. The full list of participating companies is available on the IIRC website.

Academic Study Shows Investor Acceptance of XBRL Technology

A group of academics studying XBRL acceptance have determined that investors are warming up to using XBRL-enabled technology to do their research and make investment decisions. In their study of the effects of exclusive technology choice on the analysis of financial information, a trio of accounting professors found that 66% of non-professional investors chose XBRL-enabled technology to complete a financial analysis task because they perceived it would reduce the time it would take for them to complete the task.

The 34% of nonprofessional investors who chose spreadsheets over XBRL-enabled technology said they preferred it because of prior experience they had using that technology. No one in the study chose document exchange software, such as PDFs, to complete the task. These findings have implications for the technology choice literature, regulators mandating or considering mandating XBRL-based reporting, and XBRL-enabled technology adoption.

To learn more, read the June 2011 SSRN research article, XBRL-Enabled, Excel or PDF? The Effects of Exclusive Technology Choice on the Analysis of Financial Information, by Diane Janvrin of Iowa State University, Robert Pinsker of Florida Atlantic University, and Maureen Francis Mascha of University of Wisconsin-Oshkosh.

XBRL stands for eXtensible Business Reporting Language. It is one of a family of "XML" languages which is becoming a standard means of communicating information between businesses and on the Internet. XBRL is a language for the electronic communication of business and financial data which is revolutionizing business reporting around the world.  It provides major benefits in the preparation, analysis and communication of business information.  It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data.

XBRL is being developed by an international non-profit consortium of over 600 major companies, organizations and government agencies. It is an open standard, free of licence fees. It is already being put to practical use in a number of countries and implementations of XBRL are growing rapidly around the world. The idea behind XBRL is simple. Instead of treating financial information as a block of text - as in a standard Internet page or a printed document - it provides an identifying tag for each individual item of data. This is computer readable. For example, company net profit has its own unique tag. The introduction of XBRL tags enables automated processing of business information by computer software, cutting out laborious and costly processes of manual re-entry and comparison.  Computers can treat XBRL data "intelligently": they can recognize the information in a XBRL document, select it, analyse it, store it, exchange it with other computers and present it automatically in a variety of ways for users. XBRL greatly increases the speed of handling of financial data, reduces the chance of error and permits automatic checking of information.

The XBRL International website provides further information about the nature, uses and benefits of XBRL. It explains how individuals and companies can join the effort to move forward and make use of the language.

KPMG International Survey of Corporate Responsibility Reporting 2011

According to a recent KPMG survey, leading companies have combined their Corporate Social Responsibility (CSR) reporting and financial reporting, often by merging the two into the annual report. While this has been a valuable stepping stone in building an understanding of how CSR impacts the business, greater value will be gained once both sets of information are treated as part of the company’s comprehensive business performance reporting, both to internal management and external stakeholders.

Companies are also quickly evolving the method by which they communicate their CSR information to their various audiences. As more and more companies start to employ multiple vehicles for communication, the focus will be on developing and implementing a comprehensive communication strategy that enhances trust and value for the company within its different stakeholder groups.

(For more information, read the full report, KPMG International Survey of Corporate Responsibility Reporting 2011, available online.)

CICA seminar on integrated reporting features Robert Herz

Robert Herz, the recently retired chair of the US Financial Accounting Standards Board (FASB), will be in Toronto, Canada on November 23, 2011, for a breakfast seminar.

At the seminar, organized by the Canadian Institute of Chartered Accountants (CICA), Mr. Herz will review the proposals outlined in a Discussion Paper, Towards Integrated Reporting – Communicating Value in the 21st Century. The Paper was published on September 12, 2011, by the International Integrated Reporting Committee (IIRC) with a call for comments by December 14, 2011.

The IIRC was established in August 2010 by the Prince of Wales Accounting for Sustainability Project, the Global Reporting Initiative, and the International Federation of Accountants.  The IIRC brings together a cross section of representatives from the corporate, investor, accounting, securities, regulatory and standard-setting communities.

The Discussion Paper features proposals for the development of an International Integrated Reporting Framework and outlines the next steps toward its creation and adoption. The goal of integrated reporting is to provide more comprehensive and meaningful information about how an organization creates and sustains value.

(For more information, see the CICA media release on November 18, 2011.)

Corporate reporting - From compliance to competitive edge

Today’s business information and reporting is under fire from companies, investors, government and regulators alike. In response, PricewaterhouseCoopers (PwC) has published a paper called "Corporate reporting - From Compliance to Competitive Edge" which explains why today's business information and reporting is falling short, what's driving change, where insight is missing and how companies can take action. This report incorporates some of the findings from the PwC annual survey of the quality of FTSE 350 reporting.

(For more information on recent developments, visit the PwC corporate reporting website and also see the PwC Corporate Reporting Blog by David Phillips, Senior Corporate Reporting Partner in the Assurance practice of PricewaterhouseCoopers LLP.)

Announcing the Investis Online IR Rankings

Investis Online IR Rankings, a unique free feature, aims to help investor relations professionals identify companies that are international leaders in online IR communications. The initial rankings cover major international stock exchanges, including the S&P 100 index of the largest US companies, the FTSE 100 of the largest UK-listed companies, the DAX index of blue chip German companies, the Italian FTSE MIB index, and Finland’s OMXH 25. New indexes will be added in future quarterly updates to eventually cover about 800 companies, which will be reviewed twice per year.

The evaluations are conducted by Investis, a leading corporate website service provider based in London, and validated through random sampling by IR Web Report. Investis has been evaluating corporate websites for its IQ Benchmarking service since 2008. The Online IR Rankings are an offshoot of its corporate website rankings and use an IR-focused scoring system devised by IR Web Report. For more information, see the October 25, 2011 posting “Introducing the Investis Online IR Rankings” by Dominic Jones at IR Web Report online.

Highlights of Corporate Governance Research

Several corporate governance developments have occurred in the wake of the high-profile scandals of the past decade. Some of these developments are motivated by legislation, such as the Sarbanes-Oxley Act of 2002 (SOX). Others are best practices enhancements intended to shore up investor confidence. Academic research has monitored these developments. The article “Highlights of Corporate Governance Research” in the September 2011 issue of the Journal of Accountancy summarizes important academic findings and observations recently published in prominent accounting and finance journals.

This article is part of a series that samples accounting research and distills key findings for busy practitioners and preparers. These summaries explain the implications of a wide range of research and give CPAs the opportunity to apply the results in day-to-day activities. Readers interested in more detail should review the full text of each article to explore the hypothesis, research process, statistical analysis, supporting theories and conclusions.

What makes a good annual report?

What’s the secret for a good annual report? It usually boils down to keeping things simple, but keeping them simple these days is a challenge. Rising demands for more disclosure and the integration of sustainability reporting are factors making annual reports ever longer and more complex. Unfortunately, too many annual reports are choked with low-quality information, disconnected content and boilerplate, all of which obscures key messages.

Clear, crisp communication, on the other hand, is a sign of strong leadership. It’s also an opportunity to improve engagement and dialogue with stakeholders. Four techniques for creating a good annual report are: (1) focus on strategy; (2) cut the clutter; (3) sum it up; and (4) speak plainly.

(To learn more, read “What makes a good annual report?” by Richard Ketchen at IR Web Report online.)

Canadian Standards in Transition - ASPE Resources Available

The Canadian Institute of Chartered Accountants (CICA) has recently issued three new resources to help private companies make a smooth transition to the new accounting standards for private enterprises (ASPE).

A Guide to Understanding Transitional Options and Accounting Policy Choices
This guide helps practitioners understand the choices and decisions available under the new accounting standards for private enterprises (ASPE) and provides practical examples and worksheets.

A Case Study: Financial Statement Comparison
This publication presents an example of non-consolidated and consolidated financial statements prepared in accordance with pre-changeover accounting standards - XFI Version, and financial statements restated in accordance with ASPE.

Transition Considerations for a Non-Complex Entity
This summary highlights significant changes in the new standards as well as items that require management consideration. The information, geared to non-complex entities, raises awareness for typical balances on a set of financial statements.

PwC’s “To the point: Current issues for boards of directors – Fall 2011”

As the title suggests, “To the point” addresses contemporary issues and is meant to be impactful, insightful and concise. Each quarter, PwC addresses select topics that are of immediate interest to directors. The Fall 2011 edition shares insights on several matters.

Next year's proxy season: The SEC's plan for proxy access was struck down by a US Court of Appeals decision in July, but directors should prepare for the possibility of private ordering proxy access.

A new discussion about mandatory auditor rotation: The idea of mandatory audit firm rotation has resurfaced in a recent PCAOB concept release, and comments are requested on the matter.

Technology in the boardroom: Directors are increasingly using electronic portals and tablet devices to access board materials and books, and the trend is likely to continue.

(Read PwC’s To the point: Current issues for boards of directors – Fall 2011.)

Amsterdam Roundtable on Integrated Reporting

An Executive Roundtable on Integrated Reporting was recently organized by the International Integrated Reporting Committee (IIRC) and Duisenberg School of Finance in Amsterdam. It was one of a series of roundtables hosted around the world to encourage the exchange of views on Integrated Reporting among leaders in business, investment, civil society, accounting and the standard setting community. The focus was on the Integrated Reporting Discussion Paper, Towards Integrated Reporting – Communicating Value in the 21st Century, which was launched on September 12, 2011.

It was noted that Integrated Reporting is about accountability regarding past financial and non-financial performance and providing insight in how a company aims to create and sustain value for shareholders and other stakeholders. Integrated Reporting only makes sense if it is part of an integrated business strategy. It should not be a data collection exercise, just for the sake of reporting. In addition, legislation has a role to play in creating a level playing field for Integrated Reporting. It should avoid being compliance based and rather be designed along the lines of a “comply or explain” approach. A Summary of the Roundtable Discussion is available online.

Communication Technologies put Privacy at Risk

According to a recent survey, Canadians are heavy users of social networks and other communications technologies, but many are not taking basic steps to protect their personal information. A telephone survey of 2,000 randomly selected adults, commissioned by the Office of the Privacy Commissioner of Canada (OPC), found that three-quarters (74%) of respondents own at least one mobile communications device, such as a cell phone, smart phone or tablet. However, only 4 in 10 use password locks for the devices, or adjust their settings to limit the sharing of personal information that may be stored on the devices.

The Canadians and Privacy Survey 2011 found that one-third of Canadians use public Wi-Fi sites, such as those located at coffee shops and airports, where online communication may not always be protected by encryption. Of those, fully 85% admitted to some concern about possible risks to the security of their personal information.

The poll, conducted by Harris/Decima, also found that just over half (51%) of respondents use social networking sites, such as Facebook, MySpace and LinkedIn. Fortunately, 4 in 5 said they take advantage of privacy settings that allow them to control access to their online content. Even so, 45% of all respondents who use social networking sites acknowledged that they are concerned about the associated risks to their privacy.

Global Anti-bribery and Corruption Survey 2011

In Canada, managing bribery and corruption risks has not assumed the importance and urgency seen in other jurisdictions. To date, Canada’s Corruption of Foreign Public Officials Act (CFPOA), has received little attention from corporations and enforcement by officials. This is in stark contrast to the situation in the United States where the Foreign Corrupt Practice Act (FCPA) is robustly and strictly enforced.


However, there have been important developments on the Canadian anti-bribery and corruption (AB&C) front. The new reality for Canadian companies is one of increased AB&C enforcement activity, both at home and abroad.

KPMG Forensic commissioned a survey of 214 executives (106 in the US and 108 in the UK) who consider themselves “one of the most senior persons in charge of day-to-day AB&C matters at their company.” The three most significant AB&C compliance challenges cited by both US and UK respondents are auditing third parties for compliance, difficulty in performing effective due diligence on foreign agents/third parties, and variations in country requirements and local laws on issues, such as data privacy and facilitating payments. (Read the Global Anti-bribery and Corruption Survey 2011.)

Integrated Reporting: Performance insight through Better Business Reporting

KPMG has issued the first edition of the publication Integrated Reporting: Performance insight through Better Business Reporting. It focuses on the challenge of providing better corporate reporting. Many who read this may not be familiar with the topic but, with the publication by the International Integrated Reporting Committee (IIRC) of its Discussion Paper, it is likely to receive more attention in the future. In the past, KPMG has looked at this as “Better Business Reporting” which captures the essence of the subject.

The first edition provides some background on Integrated Reporting with a series of short articles by some of the firms’ specialists. After a brief summary that explains what Integrated Reporting is, Michael Bray sets out the case as to why senior executives and non-executives ought to be interested.

XBRL International Conference – October 2011

XBRL (eXtensible Business Reporting Language) is transforming business reporting. Does your company seek recognition as a thought leader on XBRL? If you have business interests or plans for business development, do not miss this opportunity to take the stage! The 23rd XBRL International Conference: "XBRL23:  Enhancing Business Performance" is produced by XBRL International, Inc. and hosted by XBRL Canada. The Conference will be held on October 25-27, 2011 at Le Centre Sheraton, Montreal, Canada.

XBRL is an XML-based, royalty-free, open standard for business reporting. XBRL was developed by XBRL International, a not-for-profit consortium of leading companies and organisations around the world. For more information about the XBRL standard,  visit the XBRL International website. XBRL Canada conducts seminars and webinars for companies and individuals wishing to learn more about XBRL. Currently, it is also working on projects to assist companies with convergence to IFRS.

Mobile insecurity

The proliferation of mobile computing has brought on a number of challenges, specifically around security issues. Smartphones are repeating a pattern witnessed in the 1980s with desktop computers. They flood into the corporate fold without any rational plan. And very often, they are introduced by employees who can’t resist the status statement these devices make. The greatest obstacle to security is the users themselves. People believe nothing of value resides on their device, yet much can be used for identity theft, intellectual property theft or espionage. Everyone likes these devices for the immediacy and convenience, and don’t want to be bothered with security barriers, especially passwords. This is why many users deactivate the password protection, which to begin with is very rudimentary and requires only a four-digit PIN identification. In a regular notebook, that would never be accepted as security. To learn more, read the article “Mobile insecurity” in the September 2011 CAmagazine online.

The "cloud" and what it can do for your business

When someone talks about joining “the cloud” are you puzzled? What is it, what does it do and what does it mean for the future? Some believe the cloud is a major step in the evolution of the Internet. Others say that, without a doubt, cloud computing will play a huge role in the design, reliability and speed of corporate websites. Many are convinced that, within the next five to six years, most computing services will be delivered from the cloud. Still, for many small business enterprises, cloud computing is an abstract concept. To learn more, read the article "Still foggy on cloud computing?" in the September 2011 issue of CAmagazine online. 

The World is Changing – Reporting Must Too

The Integrated Reporting Discussion Paper, Towards Integrated Reporting – Communicating Value in the 21st Century was launched on September 12, 2011. It is available for reading online and as a PDF document. The Paper considers the rationale for Integrated Reporting, offering initial proposals for the development of an International Integrated Reporting Framework and outlining the next steps towards its creation and adoption. Its purpose is to prompt input from all those with a stake in improved reporting, including producers and users of reports. The International Integrated Reporting Committee (IIRC) welcomes general comments on the Discussion Paper, as well as responses to the questions posed. The deadline for submission is December 14, 2011.

PwC – 10 Minutes on the CEO agenda

PwC research has found that CEOs across the globe are redefining what growth looks like in a post-crisis world. Companies are reshaping their strategies and operating models—focusing on issues like talent, innovation and collaboration—to find new sources of revenue growth and competitive advantage. There are eight key questions leaders can ask— about where and how to change—to ready their businesses for the road ahead. Read the PwC March 2011 publication Growth reimagined: The eight questions every CEO should ask about getting—and staying—ahead.

Corporate Sustainability: A progress report

Corporate Sustainability: A progress report is a KPMG research report, conducted in cooperation with the Economist Intelligence Unit. It reviews the importance of sustainability within business today and executive attitudes toward this issue. According to the report, sustainability is rapidly becoming a strategic priority for businesses.

Around the world, there are encouraging examples of pioneering companies that have recognized the imperative of sustainability and created strategies and solutions. For a growing number, the concept of sustainability goes far beyond corporate social responsibility (CSR). It has become the strategic lens through which they view their businesses. For these organizations, sustainability offers an undeniable opportunity to gain competitive advantage, drive innovation and generate real bottomline results. Despite a complex array of challenges, these companies are already taking great strides towards shaping the global approach to sustainability. What propels these organizations past their competitors is the recognition that sustainability goals must be tied to operational strategy and measured in the same way as other investments. By treating sustainability as an investment rather than a cost, they have adjusted their business models to drive long-term change and make them more competitive in the market. 

This research report is based on an October 2010 global survey of 378 senior executives encompassing a range of industries and evenly split among North America (US and Canada), Asia Pacific and Europe, with a smaller representation from the Middle East, Africa and Latin America. Organizations of all sizes were represented: 40% of respondents worked for firms with revenues of at least US$ l billion, whereas 47% were from firms with revenues of US$ 500 million or less. The respondent base was very senior: 26% were CEOs, presidents or managing directors of their firms; half represented the C-suite or board; and all respondents were in a management position. To complement this and to provide specific context, the Economist Intelligence Unit conducted extensive desk research and in-depth interviews with numerous corporate sustainability executives and experts.

The Top Ten Tech Issues

The Canadian Institute of Chartered Accountants (CICA) Information Technology Advisory Committee conducts an annual survey of the most important IT issues facing the profession, which provides interesting insight into the prevalence and impact that technology has on businesses. While some topics come up every year, the relative importance of several issues changes from survey to survey.

This year was no different. Information management rose to the top spot from No. 3, pushing last year’s No. 1 issue, legislation and regulatory compliance, to second place. The impact of the recession, No. 2 last year, fell to No. 10 in this year’s survey, while new and emerging technologies rose to No. 3 from No. 5. (To learn more, read the article "The Top Ten Tech Issues" in the September 2011 CAmagazine online.)

Usefulness of the Independent Auditor’s Report

According to the CFA Institute, there is a growing worldwide debate on the usefulness of the independent auditor’s report. The current “pass/fail” model simply communicates that the financial statements are, in the auditor’s opinion, presented in accordance with generally accepted accounting principles, but there is no information available on how the auditor addressed the risks of material misstatements identified during the audit process. While it is clear that more information about the quality of the financial statements and the audit process might be useful, it is not clear what kind of information should be communicated through the auditor’s reporting model.

The CFA Institute sought feedback on this topic to assist in informing the audit standards-setting bodies as they consider how to modify the Independent Auditor’s Report to ensure that the user needs are being considered in any proposed changes. Survey results show that 58% think that the independent auditor’s report needs to provide more specific information about how the auditors reach their opinion. The most important additional information to include is: information about the independent auditor’s assessment of management’s critical accounting judgments and estimates (86% felt this was important to include); and, information about the independent auditor’s assessment of the quality, not just the acceptability, of management’s selection and application of accounting principles (90% felt this was important to include).

(For more information, read the March 2011 CFA survey report, Usefulness of the Independent Auditor’s Report, available online.)

Losing the excess baggage - reducing disclosures in financial statements to what's important

The Institute of Chartered Accountants of Scotland (ICAS) and the New Zealand Institute of Chartered Accountants (NZICA) have undertaken a project for the International Accounting Standards Board (IASB). The joint project is to review International Financial Reporting Standards (IFRS) disclosure requirements, to remove much of the detailed information in financial statements so that they can focus on what is important.



Following the Group's detailed review of financial reporting standards, the paper recommends enhancing the use of materiality in financial reporting disclosures and deletion of many disclosure requirements that do not contain material information. It is expected that later this year the discussion paper and its recommendations will be issued by the IASB for exposure and comment. Read the July 2011 paper, Losing the excess baggage - reducing disclosures in financial statements to what's important.

Integrated reporting - Exploring the business benefit

Black Sun is one of Europe’s leading strategic corporate communications consultancies. It brings together corporate reporting, corporate responsibility communications and digital communications for clients to create powerful integrated solutions.  Offering a combination of strategic research and analysis, and ambitious creative thinking, it aims to help large UK and international organizations produce effective communications that build greater trust and confidence with their stakeholders.

Black Sun has carried out extensive research about current integrated reporting on a country-by-country basis, examining a sample of over 100 companies from 8 of the G20 countries, with representation from both developed and emerging markets. A Seminar will be held in London on August 31, 2011 to provide a summary of this international integrated reporting research and to provide an in-depth analysis of those companies that are found to be leading the way.

(View recent research reports, briefing papers and other guidance, such as the publication on Integrated Reporting – Exploring the Business Benefit at the Black Sun website.)

CICA Financial Reporting and Accounting Conference (IFRS and ASPE)

The Canadian Institute of Chartered Accountants (CICA) is presenting its annual Financial Reporting and Accounting Conference on September 26-27, 2011 (optional workshops, September 28) at the Metro Toronto Convention Centre in Toronto, Canada. This conference is Canada’s leading financial reporting and accounting event and provides an up-to-date and extensive review of the most critical current and emerging issues facing both publicly-traded and privately-held corporations in Canada. Extensive coverage of the latest developments in both International Financial Reporting Standards (IFRS) and Accounting Standards for Private Enterprises (ASPE) will be delivered by prominent Canadian, US and international speakers. In-depth workshops addressing the most relevant and challenging financial reporting topics will also be available. (For more information on CICA Continuing Education products, visit the online CA Learning Centre.)

PwC Thought Leadership Highlights

Every month, PricewaterhouseCoopers (PwC) delivers a range of Thought Leadership materials that explore key business issues affecting companies around the world. This month the focus is on a variety of issues that address the following questions and more: What's the key to successful business innovation? What are the implications of the proposed FASB/IASB revenue recognition changes? How are businesses adapting to the changing needs of their talent? What's next for nuclear power? (for example, see View:Striking the innovation balance).

Also, experience the popular 10Minutes series on your iPad, now enhanced with new multimedia. With this inaugural issue, 10Minutes on the CEO Agenda, explore the eight pressing questions facing CEOs today, hear about the challenges directly from business leaders around the world. 10Minutes on the Cloud discusses how cloud computing can go beyond cost savings to offer a way to improve innovation and organizational agility, provide better customer engagement, and harness resources to focus on business imperatives.

Deloitte’s Top 10 Canadian TMT Predictions for 2011

In 2011, Canadian consumers and enterprises will continue to move away from a predictable but narrow world of standardized computing devices and are voting with their wallets in favour of diversity of choice. Between PCs, netbooks, tablets and smartphones, buyers must choose among a wide array of functionalities, platforms, operating systems, sizes, features and price points. Like kids in a candy store, consumers and enterprises will be both excited and overwhelmed by the sheer variety of options available to them. Canadians will use these various devices while shopping, while working, for social networking and for media consumption. (Read more about Deloitte’s Top 10 2011 Canadian TMT Predictions and download the Report.)

ACCA launches online Virtual Research & Insights Conference

More than 6,000 finance professionals have signed-up for the Association of Chartered Certified Accountants (ACCA) online Research & Insights Conference which launched last week. The conference sessions can be viewed on-demand via the ACCA website until October 27, 2011.

HRH Prince of Wales delivered a live address at the conference on his involvement with the Accounting for Sustainability Project, as part of the session on integrated reporting. The online audience also heard from Professor Mervyn King, deputy chair of the International Integrated Reporting Committee (IIRC), who talked about the future scope of integrated reporting, as well as the benefits and challenges of creating a framework that brings together financial, environmental, social and governance information in a clear, concise and comparable format.

The conference covered a wide range of topics from a wealth of expert speakers, including: the new business environment: opportunities for growth; why talent management in finance matters; integrated reporting: a framework for the future; financial issues from Brussels; extended audit reporting; the eProfessional: creating the next generation of accountants; making businesses accountable; cloud computing; social media; and XBRL.

(View the ACCA conference program and ACCA Attendee Guide, then register to access the conference presentations.)

Netwatch - Smartphones are changing everything

Jim Carroll recently noted that: "I was invited to talk to 250 students for my son’s Grade 12 class. When I ran the first text-message poll, I had about 247 responses within 60 seconds. For members of this generation, texting is like oxygen; their mobile smartphone is their view into the world. They’ll look at something like text-message-based banking and think it is a great idea. ...This speaks to a huge trend: significant business model change as a result of the impact of mobile or smartphone technology. ...And the trend isn’t limited to financial services — it’s happening in virtually every industry." To learn more, read the article "Smartphones are changing everything" in the August 2011 issue of CAmagazine online.

IFRS: the first quarter

The first IFRS Canadian corporate report filings are now in. How did the implementation go? What went right? What went wrong? What can we expect in the future? With a number of major IFRS projects underway at the International Accounting Standards Board — policy decisions for leases and financial instruments — the new reporting landscape is still a live environment. For a review of how selected companies were able to prepare their first IFRS reports, read the article "IFRS: the first quarter" in the August 2011 issue of CAmagazine online.

Interim Reporting Under IFRS — An Update

CPR Alert (Issue 14, July 2011) is a non-authoritative bulletin prepared by staff of the Canadian Performance Reporting Board (CPRB) at the Canadian Institute of Chartered Accountants (CICA). This issue, Interim Reporting Under IFRS — An Update, reviews: Filing deadlines – no extension for Q2 and Q3; Items to include in Q2 and Q3 2011 interim financial reports; Auditor review of interim financial reports; MD&A considerations for Q2 and Q3 2011; and Classification of bankers acceptances under IFRS. In addition, the Ontario Securities Commission published IFRS Release No. 3 – IFRS Interim Financial Reports –Tips For Q2 And Q3 on July 7, 2011. That release provides a useful filing tip sheet for Q2 and Q3.

What ethics means in business

On July 15, 2011, the Globe and Mail convened a panel of experts to discuss why companies should act with integrity. The panel comprised: Paul Klein, the founder of Impakt; Don McCreesh of Imagine Canada; Andrew Wilcynski, director of cause marketing for Telus; and Ben Packard, VP of global responsibility with Starbucks. Watch the video on What ethics means in business. Also, view related videos on corporate social responsibility at the Globe and Mail online.

Leveraging XBRL for Value in Organizations

The International Federation of Accountants (IFAC) and ISACA have jointly developed the paper Leveraging XBRL for Value in Organizations to provide accounting and assurance professionals with guidance to leverage value from XBRL (eXtensible Business Reporting Language) initiatives and compliance requirements. The benefits and opportunities of embedding XBRL within internal processes can enhance management communication and increase the value of data used within an organization. Examples and case study material are included, as well as XBRL Resources.

More evidence that few read annual reports

A new survey of Canadian online investors shows that few rely on formal disclosure documents like annual reports for investment information, even though most describe themselves as long-term investors. The findings of the latest RBC Direct Investing poll of 630 online investors once again highlights the need for companies and their regulators to rethink the role annual reports and prospectuses play in investor relations and financial disclosure programs. The results of this survey echo findings in a range of other investor surveys going back several years. All show that few investors use corporate annual reports and formal disclosure documents – and those who do consult them do so only briefly. (Read the full story by Dominic Jones at IR Web Report.)

Six Key Trends that are Shaping the Business World

A 2011 Ernst & Young report Tracking Global Trends looks at six broad, long-term developments that are shaping our world. Key trends include: Emerging markets increase their global power; Cleantech becomes a competitive advantage; Global banking seeks recovery through transformation; Governments enhance ties with the private sector; Rapid technology innovation creates a smart, mobile world; and Demographic shifts transform the global workforce.

The three underlying drivers that have helped establish and perpetuate these trends are:

1. Demographic shifts. Population growth, increased urbanization, a widening divide between countries with youthful and quickly aging populations and a rapidly growing middle class are reshaping the business world and society as a whole.
2. Reshaped global power structure. As the world recovers from the recession, the rise of relationships between the public and private sectors has shifted the balance of global power faster than most could have imagined just a few years ago.
3. Disruptive innovation. Innovations in technology continue to have massive effects on business and society. Emerging markets are now becoming hotbeds of innovation, especially in efforts to reach the growing middle class and low-income consumers around the globe.

Canadian Public Accountability Board (CPAB) Report 2011

Since its incorporation in 2003, the Canadian Public Accountability Board (CPAB) has issued seven annual public reports. The first five reports summarized inspection findings. Two years ago, CPAB changed its approach to focus on the root causes of audit deficiencies and to highlight the key recommendations that, if implemented, would have the greatest impact on improving audit quality. In the past year, CPAB has enhanced its risk assessment capabilities and now uses a more robust risk analysis process to identify high risk firms and audit engagements, improving the effectiveness of its inspections. CPAB has also increased the frequency of its inspections of firms that audit fewer than 100 reporting issuers.

According to CPAB, audit quality in Canada continues to be sound. Nonetheless, the 2010 inspections showed no significant improvement in audit quality from the previous year. The report identifies the major areas that would enhance audit quality. These include engagement supervision and review, application of professional skepticism, improving substantive analytical procedures, providing sufficient audit evidence, improving communication with audit committees, preparing significant issues and completion memos, and enhancing consultation on 25 complex, non-routine transactions.

(Read the CPAB Report on the 2010 Inspections of the Quality of Audits Conducted by Public Accounting Firms, issued in April 2011.

Transocean: No Apologies Over Gulf Oil Spill

"Fourteen months after the Deepwater Horizon drilling rig exploded 50 miles southeast of Venice, La., killing 11 men and setting off the largest offshore oil spill in U.S. history, Transocean (RIG), the company that owned and ran the ill-fated 32,600-ton vessel, finally issued its official account of what happened and why. It produced a report on June 22 of no fewer than 854 pages, divided into two volumes, and spared no detail. The bottom line, though, isn’t complicated:It was BP’s (BP) fault." (Read the full story "Transocean: No Apologies Over Gulf Oil Spill" at Bloomberg Businessweek online.)

About the Global Accounting Alliance

The Global Accounting Alliance (GAA) comprises 11 of the world's leading professional accountancy institutes. It represents more than 775,000 professional accountants in over 165 countries from around the globe. The GAA promotes quality services, shares information and collaborates on important international issues. As part of this effort, the GAA publishes a bi-monthly online journal. GAA Accounting includes authoritative yet accessible articles to advance the understanding of theory and practice in accounting, business finance and related subjects for members around the world. The June 2011 edition is available online and also as a Digital Edition.

About the National Investor Relations Institute (NIRI)

Founded in 1969, the National Investor Relations Institute (NIRI) is the professional association of corporate officers and investor relations consultants responsible for communication among corporate management, shareholders, securities analysts and other financial community constituents. The largest professional investor relations association in the world, NIRI’s more than 3,500 members represent 2,000 publicly held companies and $5.4 trillion in stock market capitalization. Investor relations is a strategic management responsibility that integrates finance, communication, marketing and securities law compliance to enable the most effective two-way communication between a company, the financial community, and other constituencies, which ultimately contributes to a company's securities achieving fair valuation. (See IR Weekly and the President's Blog for the latest news and developments in investor relations.)

Sustainability Framework 2.0: Professional Accountants as Integrators

“The role of leadership and business strategy is to promote the integration of sustainability issues at a strategic level, so that they are embedded in organizational development covering strategy, planning, enterprise risk management, and operations. The importance of tone at the top is best captured by the King Code of Corporate Governance for South Africa, which specifically encourages the integration of governance and sustainability into strategy, operations, and reporting of an organization. The philosophy of the King code revolves around leadership, sustainability and corporate citizenship. Responsible leaders direct company strategies and operations with a view to achieving sustainable economic, social and environmental performance.” (Read the publication Sustainability Framework 2.0: Professional Accountants as Integrators, issued by the International Federation of Accountants (IFAC) in March 2011.)

Integrating the Business Reporting Supply Chain

High-quality business reporting lies at the heart of strong capital markets and sustainable economic growth. All those involved in the business reporting supply chain play a critical role in making business reports more relevant, understandable and reliable. This will enable the various stakeholders who use those reports to make informed decisions with respect to an organization’s social, environmental, and economic performance.

Recent interviews with key business leaders from around the globe capture recommendations on governance, financial reporting, financial auditing, and broader business reporting from prominent preparers, directors, auditors, standard setters, regulators and investors. This report analyzes what, according to interviewees, the various participants in the business reporting supply chain should do to further improve governance and the usefulness of business reports, as well as the preparation and audit of those reports. Unless otherwise stated, the recommendations in this report apply to all organizations and businesses. (For more information, read the March 2011 IFAC report Integrating the Business Reporting Supply Chain.)