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Assurance on Integrated Reporting and other EER – AASOC

Date recorded:

At its meeting on June 13-14, 2019, the AASOC received a presentation from Mr. Richard Talbot who is currently a Senior Advisor to the CFA Societies of Canada and was most recently the Chief Operating Officer of RBC Capital Markets. The Chair noted that Mr. Talbot and Mr. Tom Trainor, Managing Director, Hanover Private Client Corporation, have been leading a Canadian initiative on Alternative Performance Measures. Mr. Talbot informed the Council of concerns that audited financial statements are losing their relevance.

Investors are increasingly allocating capital using unaudited information, or APMs, that is not covered by GAAP. In speaking to a group of senior investors, Mr. Talbot reported that they stated that 15 to 20 per cent of the information investors use to make their investing decisions are obtained from the audited financial statements.

Mr. Talbot noted that APMs are different from GAAP information because they are typically sector-specific and, therefore, requiring the standard setters to know the subject industry in detail. He informed AASOC that the Alternative Performance Measures Working Group was created in May 2018 at the suggestion of the Governor of the Bank of Canada. The Group’s goal is to develop a set of industry-specific standards that can be implemented and ultimately improve corporate disclosures. The Group will form industry-specific teams that will utilize a collaborative approach with an agile cycle time. Mr. Talbot invited the AASB to support this initiative by being represented on the Group.

Review the minutes on the AASOC's Web site.

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