FOR THE PROFESSION People have bee...

FOR THE PROFESSION

People have been talking about the "global village" for above thirty years. Improved communication technology is rapidly making a borderless world more of a reality--notwithstanding spats across potatoes and softwood lumber--both in bourns of the flow of capital and the melt of goods and services. As the reality of globalization continues to take shape, its implications for Canadian GAAP have become a common topic of discussion for Canadian CAs and other interested parties.

The Accounting Standards Board (AcSB) is working to harmonize Canadian GAAP with its US equivalent to the volume possible, although its longer-term goal is the tendency to meet of a single set of International Accounting Standards. The AcSB is also collaborating with the US Financial Accounting Standards Board (FASB) to upgrade existing standards and cause to grow new ones.

The CICA's Accounting Standards Oversight Council set the issue of GAAP harmonization at the top of its agenda during a fresh cross-country forum. The debate focused in succession timing--whether we are willing to wait for Canadian and US GAAP to tend to the same point whether we want to pass by a leap on board with US accounting standards immediately, or whether we should keep possession of out for international standards.

The issue isn't relegated to esoteric discussions amongst CAs. forward March 16, 2001, the Canadian Securities Administrators (CSA) released a discussion paper forward the issues of accepting, for securities regulatory purports financial statements prepared in accordance with US or other foreign GAAP. The remark period closes on June 30 2001

While the season "international standards" has an inclusive ring, reconciliation with US GAAP is what's driving the in every one's mouth discussion. As we all know, going global in the Canadian adjoining matter usually means going American. As the dominant financial player forward the global stage, the US is certainly the geographical division to which Canadian companies in ne of cash incline differently Some Canadian companies are suggesting that there should be an option to file in Canada using US GAAP. This option would allow them to seek for financing at home, expand their listing to a US exchange, and still prepare common set of books using common set of rules.

The ICABC and the BC Securities Commission lately co-hosted a meeting of auditors, senior financial officers of public companies, and regulators to discuss these issues. Views were divergent. a certain quantity of advocated "opening it up and letting] the market determine the need" while others intimateed concern about issues of comparability, capacity within the financial community to deal well with recent standards, and significant transitional puzzles Concern was also expressed that a rush to US GAAP could lead to a reduction in our ability to influence the exhibition of GAAP on an international flush While still a comparatively small player, Canada popularly casts a long shadow in the International Accounting Standards arena.

While Canadian GAAP has a prolonged and proud tradition of providing a for the use of all and consistent set of behaviors the world is changing. If we're to maintain these principles of comparability and consistency, our profession must also change. Harmonizing Canadian GAAP with US GAAP-- and ultimately with international standards-will make secure that all business people and investors can compare companies, industries, and management strategies accurately. of the like kind an outcome will only lead to more and better opportunities for all CAs.

We'll hold you posted as the dialogue upon this complex topic continues.

BY DOUG WALLIS, CA

DIRECTOR OF PROFESSIONAL ADVISORY SERVICES

Copyright Institute of Chartered Accountants of British Columbia Jun/Jul 2001

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