Linda Mezon chairs the September 20-21, 2018 AcSB meeting in Montreal.

The ONE conference speaker and chair of the Canadian Accounting Standards Board shares insight into what can be expected on regulation and reporting down the line (Photo by Ben Desjardins, CP Images)

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Three questions with Linda Mezon: an update on accounting standards, the impact on CPAs and Canada’s international reputation

The ONE conference speaker and chair of the Canadian Accounting Standards Board shares insight into what can be expected on regulation and reporting down the line

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Keeping up with accounting standards isn’t easy, but with ongoing regulatory changes and shifting reporting requirements at a global level, it’s more important than ever to keep on top of things that directly impact how business gets done. 

Thankfully, The ONE National Conference explores these updates in two sessions—Accounting Standards Update and Mind the Non-GAAP—the former providing an update on priorities and objectives of the Canadian Accounting Standards Board (AcSB), and the latter discussing the recent changes made by the Ontario Securities Administrators and the AcSB. 

“[We will] let people know what to watch for from a standards’ setting perspective because getting our stakeholders engaged early on is really important,” says AcSB chair and session speaker, Linda Mezon, FCPA, FCA, CPA (MI). “It’s hard for them to find the time to follow what we do. Yet it’s so important to get their input early on in the project, so we know what the real problems are and what their concerns would be.”

In an interview with CPA Canada, Mezon shares insights into where AcSB stands on key issues including the board’s stance on the reporting of non-financial performance measures and Canada’s international reputation from a standard’s perspective.

CPA CANADA: With the AcSB wanting to see more consistency, transparency and comparability in the reporting of financial and non-financial performance measures reported outside financial statements, what can we expect from its recently released Draft Framework for Reporting Performance Measures?

LINDA MEZON: The framework on performance measures is [from a] slightly different standpoint because traditionally we would really focus on setting accounting standards versus doing something like this. But we became persuaded mostly [by] talking to users of financial statements whether those are investment analysts that follow public companies or granting agencies that grant money to not-for-profits, or quite frankly private equity companie that invest in private enterprises…

Users told us they weren’t seeing a consistent quality of information, not from the financial statements, but from information outside the financial statements. Performance measures like, number of units sold or if you are in the cellular industry, number of subscribers, things like that. Numbers that aren’t governed by accounting standards…

At the end of the day, the board felt it was very important to get this conversation started by raising awareness of this issue and we think it’s important not just for public companies, but also as I said, private enterprises and not-for-profits. So that’s why we chose to step into this space because as a standards’ setters for all types of companies, we wanted all types of companies to hear this message.   

Linda Mezon chairs the September 20-21, 2018 AcSB meeting in Montreal.Linda Mezon chairs the September 20-21, 2018 AcSB meeting in Montreal.

CPA CANADA: Looking internationally, the EU is conducting a comprehensive check of the fitness of its reporting framework to determine if it is still effective. The International Federation of Accountants (IFAC) has stated that the EU should continue to endorse the existing IFRS. Not all that long ago, Canada made the transition to IFRS. Is it safe to say, the AcSB would like to see the EU continue to use IFRS? 

LM: For sure. We are aware of the EU fitness check. Our board responded to the EU fitness check for those questions that we thought were relevant for us to respond to. We work closely with our European counterparts and have regular dialogue with them from the accounting standards setting perspective, so clearly what Europe does is important to us. We are a very active component of the effectiveness of global standards, as long as they’re adopted on the same timeline. The reason we went to the IFRS quite frankly was that. We wanted to put Canadian companies’ raised capital, both in Canada and elsewhere, in a position on the same standards, where they as companies could be compared to other companies on the same standards, and they could do a more effective job of raising capital ideally at better rates. We are very clear that we think very highly of the European Union and that will continue for us. But we are very focused on the same adoption dates for everybody, so that companies are on a level playing field.   

CPA CANADA: Canada has a reputation for punching above its weight when it comes to standards setting internationally. Is that still true today?

LM: It’s a bit self-serving for me to answer this question, but I do think it’s still true today and I would say it might be even more true today. But let me tell you why I say that. The saying originated in the notion that Canadian markets are only three per cent of global capital markets. So, we are a relatively small player on global scale and yet when you go to international meetings, people are very interested in what we have to say. One of the reasons they are is that our market looks a lot like the U.S. market. We do thorough reporting. We have internal controls over financial reporting. We are known for taking a strict view on how standards are interpreted. And so, our financial reporting environment looks a lot like the U.S. marketplace but it’s under IFRS. 

Be in the know with CPA Canada

Linda Mezon speaks at two sessions, Accounting Standards Update and Mind the Non-GAAP, at The ONE National Conference on Oct. 1. To stay up-to-date on hot topics impacting the industry today, browse through CPA Canada’s upcoming events, from personal development courses and symposiums to networking opportunities.