Preparing for the Unexpected

Operational risk is an evolving discipline in which many global banks are either currently improving their scenario analysis processes or actively thinking about doing so. This executive summary is the outcome of a study by KPMG in conjunction with the ORX Association, the leading global operational risk data exchange and association in the industry. Visit the KPMG website and read the full report on Preparing for the Unexpected. Also, view KPMG's Financial Services Risk and Regulatory Centers of Excellence video.

The top 10 risks for business 2010

In today’s business environment, conditions remain challenging for many, and risk retains its position high on every organization’s agenda. Businesses themselves are changing, which brings new risk horizons and, at the same time, they are grappling with the changes brought about by a post-downturn economy. The ability to anticipate threats, respond and continually adapt is as critical a part of the risk management process as it ever has been. The Ernst & Young Business Risk Report 2010 is part of an ongoing conversation about business risk — a conversation that has been taking place for several years, asking the question: How frequently are companies scanning their horizons and with what scope?

Keeping your head above water… Recent issues in financial reporting

PricewaterhouseCoopers (PwC) Canada has published its latest Financial Reporting Release dated January 2010. The publication is called Keeping your head above water… Recent issues in financial reporting. Topics covered include: IFRS in Canada; Canadian GAAP for private enterprises; Canadian GAAP for pension plans; Canadian GAAP for not-for-profit organizations; Auditing standards in Canada; Towards a single global GAAP; Financial instruments; Loans and trade receivables, and related revenue; Provisions; Securities Commissions’ continuous disclosure reviews; and Emerging issues committee abstracts. (To learn more or to download previous editions of this publication, visit PwC Canada website.)

Canada - World Economic Forum 2010

Canada's Prime Minister Stephen Harper is in Zurich, Switzerland attending the World Economic Forum in the ski resort town of Davos. Harper, who is president of the G8 this year, is accompanied by International Trade Minister Peter Van Loan and by Finance Minister Jim Flaherty. Harper's stay begins with a roundtable discussion with business leaders from around the world, where he is expected to argue that the world's banks must adhere to Canadian-style banking regulations to avoid another catastrophic economic crash. On Thursday, January 28, 2010, Harper will deliver a keynote address to the World Economic Forum, where he is expected to outline his desire to turn Canada's presidency of the G8 into an opportunity to improve the health of women and children in some of the world's poorest nations. The annual meeting in Davos has become a favorite stop for key players in the global economy and attracts more than 2,500 CEOs, heads of state, celebrities and representatives from leading non-governmental organizations. (For more information, read the National Post article Harper to G8: 'Less promises, more results'.)

IFAC 2009 Global Leadership Survey

The International Federation of Accountants (IFAC) Third Annual Global Leadership Survey sought to obtain the views of presidents and chief executive officers of its member bodies and associates, regional organizations, and accountancy groupings on critical matters for the accountancy profession. With over 100 responses, key findings cover a wide-range of topics, including the need to support small and midsize businesses in the current environment, the increasing importance of adoption of international standards, and the issues and risks anticipated to be of most relevance in the next three years for their jurisdictions around the world. (Read the IFAC 2009 Global Leadership Survey.)

SEC's Schapiro says focus on investor needs will restore confidence

Mary Schapiro, chairman of the US Securities and Exchange Commission (SEC), said that while there were many causes of the global financial crisis, much of it boils down to risk. Investors, financial institutions, credit rating agencies, regulators and other market participants either did not know or did not understand the risks of many products. Schapiro said it is time for the markets to return to an era where everyone "can compete based on real services and results." She said to get to that point, the industry needs to focus on investor needs. (Read the online articles  "SEC head Mary Schapiro: Blame us for financial crisis too" and "SEC to begin scrutinizing risks related to retirement products".)

CICA/RBC Business Monitor Webinar

Established in 2007, the quarterly Canadian Institute of Chartered Accountants (CICA) / RBC Business Monitor draws on the strategic thinking and business insight of CAs in leadership positions in industry to provide a view of business trends and economic confidence across our nation. The most recent CICA/RBC Business Monitor survey conducted in Q2 2009 found that optimism regarding the economy has improved, though it is still down from historical highs. The survey also found that corporate profits and revenue are still estimated to decline over the next 12 months, although less than indicated by the previous survey. (Register for the free CICA/RBC Business Monitor webinar on September 29th, 2009. )

PwC Financial Reporting Release August 2009

The August 2009 issue of the PricewaterhouseCoopers (PwC) Financial Reporting Release covers the following matters: The Future of Canadian GAAP; Crossing over to IFRS; Canadian GAAP for Private Enterprises; Reflections on the Financial Crisis; Global GAAP Convergence; Financial Instruments; Fair Value Measurement; Fair Value and Liquidity Disclosures; Investments in Debt Securities; Consolidation and Asset Derecognition; Rate-Regulated Activities; Income Taxes; Earnings per Share; and Emerging Issues Committee Abstracts. (Review the current and prior issues of Financial Reporting Release on the PwC website.)

Resources on the Global Financial Crisis

The Canadian Institute of Chartered Accountants (CICA) has developed information resources to help leaders in Canada’s business and governance communities manage during these challenging times. The resources on the Global Financial Crisis are provided along with relevant commentary, guidance and announcements from Canada's Accounting Standards Board (AcSB), Auditing and Assurance Standards Board (AASB) and Accounting Standards Oversight Council (AcSOC).

Global megatrends 2009

The world is changing more rapidly than ever. Globalization continues its march. Gaps in power between developed and emerging countries continue to narrow, driven in part by the politics and economics of energy. The financial landscape is in turmoil, driving increased regulation. Aging populations and the different demands of the younger generation challenge the workforce model that has existed for decades. Technology continues to alter how we communicate and act. And climate change concerns challenge how businesses operate. (Read the Ernst & Young report on Global megatrends 2009.)

Global challenges demand global solutions

The world’s business and government leaders only have a short time to develop effective solutions to the current economic crisis, participants at this year’s World Economic Forum Annual Meeting were told. The message is that leaders must continue to develop a swift and coordinated policy response to the most serious global recession since the 1930s: global challenges demand global solutions. (Read The Global Agenda 2009.)

Financial Reform: a Framework for Financial Stability

The Group of Thirty (G30) has issued a report called "Financial Reform: a Framework for Financial Stability." The report addresses flaws in the global financial system and provides 18 specific recommendations to: improve supervisory systems by redefining the scope, boundaries and structure of prudential regulation; enhance the role of the central banks; improve governance practices and risk management; address pro-cyclicality via capital and liquidity standards; enhance accounting practices; strengthen the financial infrastructure; and increase coordination internationally.

IFAC launches webpage on The Global Financial Crisis

Accountancy organizations, regulatory bodies, standard setters and other international organizations have developed guidance on issues related to the global financial crisis. The International Federation of Accountants (IFAC) has launched a new webpage on The Global Financial Crisis. It serves as an international clearinghouse of programs, articles, speeches and other initiatives undertaken by IFAC, its independent standard-setting boards, members, associates and others that are relevant to professional accountants both in public practice and in business.

Global accountancy leaders address credit crisis

The International Federation of Accountants (IFAC) has released the results of its 2008 Global Leadership Survey. The survey summarizes the views of leaders of 110 accountancy bodies worldwide on the credit crisis and other top issues for the profession. The majority of these organizations have been actively engaged in identifying and executing appropriate responses to the crisis, supporting their members in understanding applicable international standards and working with regulators, business groups and others to find solutions.

Fair Value: Clarifying the Issues

Drastic events in the credit markets have converted what used to be a technical issue in accounting - fair value - into a public debate and a point of bitter contention in the business community. A White Paper by PricewaterhouseCoopers (PwC) summarizes the key points of the debate and offers a balanced perspective on the issues. The Paper weighs the significant benefits and limitations of reporting fair value; both have been forcefully evident in the past year and continue to emerge. (Read the PwC Paper on Fair Value: Clarifying the Issues.)

Canada’s CAs providing assistance to help directors deal with financial crunch

The Chartered Accountants of Canada have released a new publication aimed at helping corporate directors understand the business implications of the global financial turmoil. The publication, which is titled Director Alert: The Global Financial Meltdown – Questions for Directors to Ask, highlights key topics for directors to consider to better understand their company's exposure and their own obligations. There are four categories of questions:
Uncertainty, Risk and Business Strategy; Financial Condition and Liquidity; Reporting and Disclosure; and Leadership and Corporate Governance.

Fair Value Accounting: Statement by Paul Cherry, Chair, Canadian Accounting Standards Board

The clarification issued this week by the US Securities and Exchange Commission's Office of the Chief Accountant and the staff of the Financial Accounting Standards Board in relation to fair value accounting requirements is consistent with Canadian accounting standards. In Canada, the Accounting Standards Board has already issued three staff commentaries to help companies apply fair value accounting requirements when dealing with this country's own liquidity crunch. These commentaries provided guidance on how to report to investors on their holdings of Asset-Backed Commercial Paper (ABCP). The first was issued almost a year ago. (View the CICA Media Release and ABCP Commentary.)

CSA Proposals in Response to the Credit Market Turmoil

The Canadian Securities Administrators (CSA) have issued a Consultation Paper outlining several securities regulatory proposals related to the Canadian non-bank sponsored asset-backed commercial paper (ABCP) market. Shortly after events in international credit markets led to a seizure of the non-bank sponsored portion of the ABCP market in Canada, the CSA took a number of immediate steps, which included the formation of an ABCP working group to address securities regulatory issues stemming from the credit market turmoil. Those issues are examined in the CSA Consultation Paper.