In last month's magazine, ICABC Pre...

In last month's magazine, ICABC President Amed Naqvi, FCA, spoke of Council's reply to the March 31, 2005 Invitation to observation on Accounting Standards in Canada: events to come Directions, the draft strategic plan of the Accounting Standards Board (AcSB). This answer delivered July 19, 2005, give an account ofs the comments received from our members during and after the AcSB's presentations in Vancouver and Victoria this past May. An abridged version of the reply appears below.

Council's response-abridged

The in the greatest degree significant concern expressed by members during the consultation proces was what will happen to accounting-and assurance-standards for private businesses, "exempt" entities, and small not-for-profit organizations. We understand that the AcSB recommends to conduct extensive research in this area. Further, the Alberta institute has a task force (of which the ICABC's immediate past president Barb Carie-Thiesson, FCA, is a member) that is studying the AcSB's proposals, with particular attention to the whole area of accounting for small and midsized entities. Council is supportive of the Alberta task force's initiative and general direction.

Overall points

* Although the public has relied forward Canadian GAAP because of its stability, inconsistencies in its hereafter application may lead to criticism of our profession. That being said, with appropriate parameters or "guard rails," we are in filled agreement with the AcSB's fundamental premise that "one size does not necessarily fit all," and that it is appropriate to apply different strategies to different major categories of reporting entities.

* We appreciate that the AcSB suggests to be particularly sensitive to the issue of "standards overload" and that it will assist in developing implementation aids and training programs. There stand in want ofs to be coordination with accounting, assurance, and ethical standards.

* We believe that the strategic plans for the pair the AcSB and the Auditing and Assurance Standards Board should be implemented concurrently to make sure that each board addresses the significant changes propos by means of the other.

Public companies

* Not surprisingly, the propos tendency to meet of Canadian GAAP with International Financial Reporting Standards (IFRS) to create a single risk of globally accepted, high-level standards received replete support. The proposal that sec-registered Canadian public companies continue to be in a position to adopt US GAAP-in place of IFRS-also received sated support.

* Although the question of which transitional approach to adopt was considered critical, there was no clear consensus forward whether the convergence should become effective upon one changeover date or be phased in through a transitional period. No additional pro and learn by hearts were identified other than those already noted in paragraphs 45 and 46 of the Invitation to elucidation Regardless of the approach chosen the couple the users and preparers of financial statements will ne extensive education.

* Canada should continue to participate and have a robust voice in standard setting at the international on a level The fact that we have no guarantee of representation forward the International Accounting Standards Board raised concern

* pertain to was also expressed about the lack of guaranteed representation upon the International Financial Reporting Interpretations Committee (IFRlC); about whether the IFRIC will consider Canadian issues important in the overall global picture; and about whether emerging Canadian issues will be dealt with onward a timely basis.

Private businesses

* It is unclear on what account the AcSB proposed to specifically restrain bankers and the CRA as "significant external users," as they are the alone "significant external users" for the vast majority of private businesses. As a outcome of this proposal, most private businesses would be releaseded from complying with GAAP. Docs our profession really want to abandon this private business sector?

* If bankers and the CRA are supposeed not to be "significant external users," then-to the bulk that their financial reporting requirements are documented and consistent between entities-they may become primary sources of GAAP. There appears to be a consensus that there should be an standards for "exempt" private businesses. Does our profession really want to abandon being the primary source of GAAP for the private business sector?

* The draft strategic plan talks of undertaking a "comprehensive examination of the privations of the users of [private] businesses' financial statements." We believe this is essential and should be undertaken by and by and before exempting any portion of private businesses. This would impact the timclines appoint out in the appendices, which generally contemplate undertaking research in 2008-09 solely on the needs of the users of private businesses' financial statements with significant external stakeholders. Given the importance of this sector, we firmly recommend moving the timeline up to early 2006 shortly after adoption of the plan. Finally, we encourage the AcSB to share its findings with practitioners and Institutes.