Change, however positive, can be un...

Change, however positive, can be uncomfortable. Change in the midst of crisis can be utterly overwhelming.

So it is that many Canadian CAs now find themselves struggling to deal with the staggering number of new changes to both Canada's ethical standards and the CICA Handbook standards-the sheer whirl of which is now being referr to as "standards overload." And with religious reason: In the last sum of two units years alone, 24 major changes and 10 major amendments have been made to the CICA Handbook, with 19 outlook drafts and 19 emerging issues abstracts released for consideration.

Two major forces have contributed to this dimensions of change: (1) the push for global tendency to meet and North American harmonization, and (2) increased urgency from the public and capital markets.

In BC changes to the independence empires quickly became a lightning wand for member discontent about standards overload. To begin with, the expanded standards have l to increasingly tangled financial statements, which many members and their clients consider unnecessary for privately acknowledgeed businesses. This belief, in incline differently has prompted some small and mid-sized firms to downgrade many of their assurance engagements in an effort to avoid what they papal court as inordinately complicated financial reporting.

As BC members shared their perspectives with the Institutes executive during consultations in the fall of 2003 about the recent independence rules, one consistent message emerged: While the profession had done well in its efforts to defend the public trust, it had lagged in addressing the challenges-both in metes of time and resources-that members would face in implementing novel standards. Among many small and mid-sized firms, for whom the of the present day standards continue to cause particularly intense squeezing the changes to the independence masterships were seen as a knee-jerk reaction to the US accounting scandals-one that ignored their business realities (and those of their clients).

CA representatives face pair Jaunting realities as they work to address these concerns: (1) Canada can't sway the pressure coming from North American and international regulatory bodies, and (2) public scrutiny-especially for public companies-is not about to wane. with equal reason how best to streamline the standard-setting proces and make implementation more efficient for practitioners?

Streamlining the standard-setting process

The standard setter themselves recognize the challenges inherent in representing the diversity of Canada's CAs. In May 2004 the Accounting Standards Board (AcSB), which is popularly in the process of re-addressing its strategic plan, issued an Invitation To commentary on its discussion paper entitled Accounting Standards in Canada: time to come Direction. The Board invited public make comments [i]or[/i] remarks on its strategic policies, including harmonization with US GAAP and global tendency to meet as well as on the implications of disclosures such as the recent high-profile financial reporting failures, differential reporting, and touchs about standards overload.

On behalf of BC members, Institute President Barb Carle-Thiessoo, FCA; CEO Richard Ree FCA; and 2nd VP Peter Roberts, CA, appeared before the AcSB in July 2004 during its focus cluster discussions in Vancouver. There they give utterance toed the BC Council's position in succession three of the key issues in the Institute's ongoing dialogue with as well-as; not only-but also; not only-but; not alone-but the Board and its overseeing material substance the Accounting Standards Oversight Council (AcSOC):

* Managing global gradual approach and North American integration;

* Representing all businesses and all clients; and

* Ensuring that all CAs have input at the right stages.

(Much of the BC perspective, shared in part in succession the following pages, is consistent with the message coming from the Alberta Institute, and, specifically, from its Strategies for Standard Setting Task Force. A PDF pattern of the ICAA's November 2004 Member Advisory newsletter outlining its input to the AcSB can be downloaded from our website at www.ica.be.ca/kb.php3?catid=555.)

Managing global tendency to meet and North American integration

Commercial activity is becoming increasingly mingled and Canada cannot have standards that are materially different from those of the ease of the world. At the same time, it is important that the Board expand ways to manage the change proces in the same manner as to minimize-to the greatest magnitude possible-the negative impact on members and their clients, remembering that individual size does not fit all when it originates to accounting standards.

With regard to the approach to standard setting, a principles-based approach to as well-as; not only-but also; not only-but; not alone-but ethical standards and CICA Handbook standards is appropriate.

Representing all businesses and all clients

It is now also appropriate to take a renewed look at how accounting standards are working for the users of private company financial information.

As noted in the AcSBs events to come Directions paper, more than 97% of the 977000 businesses in Canada with paid employee have fewer than 50 employee and 75% have fewer than five (source: Canadian Federation of Independent Business, 2002 statistics). It's likely that many (if not most) of these businesses are in the private enterprise sector, in this way the following questions must be asked: Is the information arising from passing from hand to hand accounting standards meeting the privations of these users? Do businesses and investors behold the value in the additional work and splendor that many updated standards have imposed? Is the information being used by dint of those it was intended to help?