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.)

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.

Financial Reporting in Canada under IFRS 2011

Financial Reporting in Canada under IFRS 2011 is a concise, practical reference source that looks at the application of International Financial Reporting Standards (IFRS) from a Canadian perspective. It examines and explains IFRS requirements, illustrating their application using real-world extracts of financial statements from companies that have already adopted IFRS. It also includes: comparisons of the requirements under Canadian GAAP and IFRS; tables, charts and diagrams summarizing the requirements in easy-to-read point form; and examples of application presented in short case studies. The publication is available for purchase from the CAstore online. A free sample chapter (Chapter20 – First-time Adoption of IFRS) is also available online.

IASB and FASB Report Progress on Convergence

The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) have published a progress report on their joint convergence projects. Since their previous report in November 2010, the boards have completed five projects. In the next few weeks, the IASB will issue new standards on consolidated financial statements (including disclosure of interests in other entities), joint arrangements and post-employment benefits. Both boards will issue new requirements in relation to fair value measurement and the presentation of other comprehensive income.  In addition, the boards have made progress on the three remaining Memorandum of Understanding (MoU) projects — financial instruments accounting, leasing and revenue recognition — as well as insurance accounting. The boards have also agreed to extend the timetable for the remaining priority convergence projects beyond June 2011 to permit further work and consultation with stakeholders. The convergence projects are targeted for completion in the second half of this year. (Read the full article "IASB and FASB Report Progress on Convergence" at Journal of Accountancy online.

IIRC to meet in New York City on May 13, 2011

The International Integrated Reporting Committee (IIRC) will be meeting in New York City on May 13, 2011. The objective of the meeting is to discuss and agree on a Discussion Paper on Integrated Reporting. That Paper is to be released for business and investor testing and public consultation in June 2011. It will present proposals for an Integrated Reporting framework at the time of the G20 Finance Ministers meeting in October 2011. The IIRC is also undertaking a pilot program to give organizations the opportunity to test and provide feedback on the development of the Integrated Reporting framework. The initial phase of the pilot program will involve company and investor testing of the Integrated Reporting Discussion Paper in June-July 2011, followed by a full pilot program in September 2011 for a two year reporting cycle. (Read the IIRC announcement and get More information about the pilot program.)

CEO Round Table - What do the leaders of the top seven CA firms think about key issues?

In December 2010, Kevin Dancey, president and CEO of the Canadian Institute of Chartered Accountants (CICA), hosted a round table discussion with the CEOs of the top seven accounting firms. The discussion covered a wide range of topics of interest to the profession. Participants included Chris Clark of PricewaterhouseCoopers, Keith Farlinger of BDO Canada, Trent Henry of Ernst & Young, Alan MacGibbon of Deloitte, Phil Noble of Grant Thornton, Daryl Ritchie of Meyers Norris Penny and Bill Thomas of KPMG. Also present was Bill MacKinnon, chairman of the CICA. Read what these leaders had to say about key issues in the article "CEO Round Table" at CAmagazine online.

FINTRAC ANNUAL REPORT 2010 - Ten Years of Connecting the Money to the Crime

During 2010, FINTRAC, as Canada’s financial intelligence unit, celebrated its tenth anniversary. (Refer to the publication FINTRAC ANNUAL REPORT 2010 - Ten Years of Connecting the Money to the Crime.)

FINTRAC made 579 (556 in 2008-09) disclosures of information relevant to investigations of money laundering, terrorist financing, and/or threats to the security of Canada. Turnaround time on cases improved 17%, and requests for assistance went up 36%. By using electronic media for case disclosures, it sharply reduced delivery times, and provided a more flexible product for law enforcement and intelligence partners to work with.

FINTRAC published a new series of strategic intelligence assessments focusing on terrorist groups and countries arousing national security concerns, as well as reports informing partners about current and emerging typologies and trends in money laundering and terrorist financing. It was also the Canadian lead for the FATF typology project about the use of new payment methods for money laundering purposes.

The Office of the Privacy Commissioner (OPC) issued a report praising the Centre's management of personal information, and recommended the appointment of a Chief Privacy Officer. FINTRAC was pleased to implement this and other OPC recommendations.

(See Highlights from FINTRAC's 2010 Annual Report.)

Keeping your head above water… Recent issues in financial reporting

PricewaterhouseCoopers (PwC) Canada has published its latest Financial Reporting Release dated January 2011. The publication is called Keeping your head above water… Recent issues in financial reporting. Topics covered include: Transitioning to IFRS; Rate-regulated Accounting; Investment Companies; Recent IFRS Developments Affecting Transition; Debt Covenants under IFRS; Global GAAP Convergence; Financial Instruments; Hedge Accounting; and Life after Convergence. (To download previous editions of this publication, visit the PwC Canada website.)

IASB and FASB update to G20 Leaders

The IASB and the FASB issued a letter to the G20 Leaders on June 2, 2010 outlining the modified strategy for completing their convergence work. The letter states that "Reflecting our commitment to timely completion of the major MoU projects, the boards have significantly intensified their interaction. The boards are now meeting jointly for consecutive days on a monthly basis, either in person or by video. The boards have called, and will continue to schedule special joint meetings to address issues requiring timely joint resolution." (Read the IASB Web Announcement.)

Global Accounting Alliance online journal

The Global Accounting Alliance (GAA) comprises the world's leading professional accountancy institutes. It promotes quality services, shares information and collaborates on important international issues. As part of this effort, the GAA publishes an online journal to which its member organizations, including the Canadian Institute of Chartered Accountants (CICA), contribute articles. The April 2010 issue of GAA Accounting is available online and as a Digital Edition.

IASB - Call for interest to Public Companies listed in the US who file in IFRS

XBRL (eXtensible Business Reporting Language) is rapidly becoming the global standard for electronic financial reporting. The IASC Foundation has played an important role in encouraging the development of online financial reporting using XBRL. In December 2008, the US Securities and Exchange Commission (SEC) adopted rules that require all US-listed Foreign Private Issuers (FPIs) to submit their financial reports, including their periodic reports, in Interactive Data format, and specifically in XBRL. FPIs, which will be mandated to file with XBRL in IFRS from June 15, 2011, are invited to participate in a pilot initiative being coordinated by the IASC Foundation. The pilot will focus on FPI use of the IFRS Taxonomy 2010 to tag SEC filings in XBRL. (Read the Call for interest to Public Companies listed in the US who currently file financial reports with the US SEC in IFRS.)

Dissecting the next decade of the new millenium

After the decade of relative peace and prosperity that was the ’90s,expectations were that the good times would carry on into the new millennium. Few could have predicted how different the reality would be: the worst terrorist attack in history, two draining US-led wars that continue today, US$150-a-barrel oil and the near-collapse of the international financial system, which led to a worldwide recession we are just now crawling out of. What are the big concerns confronting Canadian business in the next 10 years? Eight business leaders share their thoughts? (Read the article Dissecting the decade in the April 2010 issue of CA magazine online.)

Podcast summaries of IASB Board meetings

The International Accounting Standards Board (IASB) is currently testing Board meeting audio summaries (podcasts). These podcasts are recorded shortly after each Board meeting and provide a short (approximately 30 minutes) summary of the main topics and projects discussed. (The IASB meeting podcasts for December 2009 to March 2010 are now available on the IASB website.)

Global - IFRS in brief / briefing sheets by KPMG

IFRS in brief, provides news and factual information on developments concerning International Financial Reporting Standards (IFRS). It includes summaries of new standards and interpretations, comments on the IASB and IFRIC meetings, the agendas and projects of those bodies, as well as KPMG's views on specific issues when appropriate. IFRS in brief is supplemented by IFRS briefing sheets that consider individual issues or requirements in more depth.

Canada - Practical updates on accounting standards for Canadian companies

The IFRS in Canada newsletter provides practical, thorough and concise updates on changing accounting standards. Written by finance professionals with extensive industry experience, IFRS in Canada is a valuable and relevant resource for finance professionals in industry. With over 4,500 subscribers, it is a source of practical information on IFRS transition issues for public companies, as well as the new Canadian GAAP for private companies. (Subscription is free.)

Canada - IFRS Briefings by KPMG

KPMG publishes a periodic newsletter called IFRS Briefings to keep clients informed about International Financial Reporting Standards (IFRS) news and developments occurring internationally and in Canada. The newsletter provides commentary on how IFRS will affect Canadian publicly accountable enterprises. (To subscribe, visit the KPMG website.)

Canada - IFRS and Canadian GAAP Differences Series

International Financial Reporting Standards (IFRS) and Canadian GAAP are both principle-based frameworks. From a conceptual standpoint, many of the general principles are the same, but the application of general principles in IFRS can be significantly different from Canadian GAAP. Therefore, to understand the magnitude of the differences between IFRS and Canadian GAAP, it is essential to look beyond the general principles to the detailed guidance provided in the standards. This series of BDO Canada publications provides detailed information on the key differences between IFRS and Canadian GAAP. (Access the IFRS - Canadian GAAP Differences Series on the BDO Canada website.)

Practical updates on accounting standards for Canadian companies

The IFRS in Canada newsletter provides practical, thorough and concise updates on changing accounting standards. Written by finance professionals with extensive industry experience, IFRS in Canada is a valuable and relevant resource for finance professionals in industry. With over 4,500 subscribers, it is a source of practical information on IFRS transition issues for public companies, as well as the new Canadian GAAP for private companies. (Subscription is free.)

IASB - Live webcast on classification and measurement of financial liabilities, March 22, 2010

The International Accounting Standards Board (IASB) staff will present a webcast regarding the status of the Board's discussions about the classification and measurement of financial liabilities and the next steps in the project. The webcast will be on Monday March 22, 2010 at 10:30am and 3:00pm UK time. (Register to participate and view the project webpage.)

IASB - IASC Foundation Constitution effective March 1, 2010

The IASC Foundation approved changes to the Foundation's Constitution in January 2010 to take  effect March 1, 2010. One of the changes was to rename three groups to be more closely aligned with International Financial Reporting Standards (IFRS): the IASC Foundation becomes the IFRS Foundation; the International Financial Reporting Interpretations Committee becomes the IFRS Interpretations Committee; and the Standards Advisory Council becomes the IFRS Advisory Council. (Read the IASC Foundation Constitution.)