Punching above our weight

Canadian standard-setters bring a balanced point of view to the global standard-setting arena.

Canada has a reputation for playing a big part in the global accounting standard-setting arena — and that’s despite our small size of slightly more than 3% of the world’s capital markets.

The Canadian Accounting Standards Board (AcSB) keeps its finger on the issues in the accounting standards world. The board has regular discussions with Canadians to keep them informed about what stakeholders need from their accounting standards — from publicly accountable entities to private enterprises and private sector not-for-profits. Those of us who are part of the AcSB are fortunate to be members of (and to support distinguished Canadians who are members of) international boards and committees.

One of the reasons for Canada’s international reputation is how we exercise judgment to reflect our business activities. This can be seen in our adoption of international financial reporting standards (IFRS), which went relatively smoothly. After much effort on many sides — from accounting firms being proactive, to AcSB’s many consultations with stakeholders to develop a strategic plan that worked, to preparers who implemented the standards — publicly accountable enterprises made the transition with ample lead time and support.

Canada’s role in IFRS development

The AcSB pays close attention to the changes to IFRS proposed by the International Accounting Standards Board (IASB) and ensures Canada is heard when changes to standards occur.

For one, the AcSB organizes opportunities for Canadians to discuss proposals directly with IASB members and its staff. It also develops recommendations and responds to all documents for comments to ensure the IASB considers the financial reporting needs of Canadian entities. It even contributes research to the IASB and participates in the IASB’s consultations and activities on active projects.

The importance of convergence

The AcSB’s decision to use IFRS is a result of our belief that adoption of converged high-quality standards is the best path to follow for transparent financial reporting and effective access to capital markets. One language for financial reporting puts companies in the best position in global capital markets. But this means that the AcSB’s standard-setting work does not stop with the IASB.

Canada’s proximity to the US and the benefits the US market provides has prompted AcSB to develop a closer relationship with the US Financial Accounting Standards Board (FASB), which develops US GAAP. Its goal is to continue to participate in various global standards activities and seek ways to influence the IASB and the FASB to narrow the differences between their standards in support of international standards convergence.

Canada’s heavy hitters

Canadian standard-setters who volunteer their time on international committees bring a balanced point of view to the global standard-setting arena because they make it a priority to work together. This inevitably fosters good communication and supports a collaborative decision-making process.

The representatives who serve on international boards and committees are a reflection of Canada’s reputation as a leader in standard-setting. These professionals raise the prominence of Canada’s standard-setting process overall and further achieve the AcSB’s goal to give Canada a voice internationally.

To read about some of the notable individuals who represent Canadian standard-setting viewpoints at both the IASB and FASB, please see interviews below.

Micheline Dionne

Stephenie Fox

Xihao Hu

Daniel McMahon

Robert Morgan

Jean Paré

Lynda Sullivan