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Regulations

The case for quarterly and environmental, social, and governance reporting

Aug 27, 2019

In August 2019, the CFA Institute, a global association of investment professionals, published a report entitled "The Case for Quarterly and Environmental, Social, and Governance Reporting" that is based on a survey of its global membership on the topic.

Respondents to the survey believe that specific ESG and sustainability disclosures should be a regulatory requirement for public companies and that securities regulators should either develop ESG disclosure standards or support an independent standards setter (i.e., a single, global standards setter in this field) to develop such standards.

Review the press release and report on the CFA Institute's website.

Global Ethics Board proposes changes to promote role, mindset expectations

Jul 31, 2019

On July 31, 2019, the International Ethics Standards Board for Accountants (IESBA) proposed changes to the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) to promote the role and mindset expected of all professional accountants. The Exposure Draft, "Proposed Revisions to Promote the Role and Mindset Expected of Professional Accountants", puts forward changes that further strengthen the Code. Comments are request by October 31, 2019.

The proposed revisions respond to stakeholder calls for the IESBA to explore whether and how the Code could contribute to strengthening the application of concepts underlying professional skepticism by all professional accountants.

Among other matters, the proposals:

  • Highlight professional accountants’ wide-ranging role in society and the relationship between compliance with the Code and a professional accountant’s responsibility to act in the public interest;
  • Include enhancements to the robustness of the fundamental principles of integrity, objectivity and professional behavior;
  • Further strengthen the Code through requiring professional accountants to have an inquiring mind when applying the conceptual framework; and
  • Highlight the importance of being aware of bias and having the right organizational culture.

Review the press release and Exposure Draft in the IESBA's website.

Dr. Stavros Thomadakis reappointed as IESBA Chairman

Jul 25, 2019

On July 25, 2019, the International Ethics Standards Board for Accountants (IESBA) announced the reappointment of Dr. Stavros Thomadakis as IESBA Chairman for a further one-year renewable term commencing January 1, 2020, which was recently approved by the Public Interest Oversight Board (PIOB).

Dr. Thomadakis has chaired the IESBA since 2015. His dedication to high quality, fit-for-purpose ethics standards for the global accountancy profession is reflected in the IESBA’s ambitious Strategy and Work Plan 2019–2023.

New CBCA diversity disclosure requirements confirmed

Jul 22, 2019

On July 22, 2019, Norton Rose Fullbright LLP released a summary of the regulations supporting the amendments to the Canada Business Corporations Act (CBCA) related to diversity disclosure. The amendments will require publicly-listed CBCA corporations to provide certain information on board and executive officer diversity policies and statistics beginning in 2020.

Although the CBCA was amended on May 1, 2018 to require publicly-listed CBCA corporations to include diversity disclosure in their annual shareholder meeting notice or proxy circular, the amendments were not brought into force until the regulations supporting the changes could be finalized. These regulations have now been published and come into force on January 1, 2020. Accordingly, the following requirements apply for the 2020 shareholder meetings of publicly-listed CBCA corporations. Of particular note, the amendments expand the existing Canadian securities law requirements on diversity disclosure to broaden the meaning of diversity beyond gender and to apply to all CBCA reporting issuers, including issuers listed on the Toronto Stock Exchange (TSX), TSX Venture Exchange (TSXV) and Canadian Securities Exchange (CSE).

Review the following resources:

SEC names new chief accountant

Jul 03, 2019

On July 3, 2019 the Se­cu­ri­ties Ex­change Com­mis­sion (SEC) appointed Mr. Sagar Teotia as chief accountant in the SEC’s Office of the Chief Accountant.

Mr. Teotia had been serving as the Commission’s acting chief accountant since the departure of Wesley Bricker in June this year. Previously, he has held positions as SEC professional accounting fellow, SEC deputy chief accountant, and partner at Deloitte LLP.

For additional information, see the press release on the SEC’s Web site.

AICPA Survey: Business Executives Say Complex Financial Instruments Continue to Pose Risk

Jul 02, 2019

On July 2, 2019, the Amer­i­can In­sti­tute of CPA’s (AICPA) released the results of a recent survey which indicates that financial instruments are a growing presence on company balance sheets, and business executives say more market awareness is needed to prevent another financial crisis.

When asked about their company financial statements, 59 percent of the CPAs surveyed reported having complex financial instruments such as mortgage-backed securities, interest rate swaps or other derivatives on their company balance sheets. 

Of those respondents with complex financial instruments on their books:

  • 69 percent expect financial instruments to become more complex (57 percent slightly more complex, 12 percent substantially more complex) over the next one to three years, compared with 1 percent who expect them to decrease in complexity.
  • 53 percent believe there is not enough market awareness of complex financial instruments to prevent a financial crisis, compared with only 22 percent who believe there is adequate awareness.
  • 55 percent said they are concerned about the valuation of derivatives with 6 percent reporting significant concern and 49 percent reporting slight or moderate concern.
  • 56 percent said it would be easier to determine the value of complex financial instruments if they were measured and reported on a consistent and transparent basis.

Complex financial instruments historically have been difficult to value. That difficulty is seen as a major cause of the financial crisis that lead to the recession of 2008. The derivatives market exceeded $594 trillion in 2018. More than a quarter (28 percent) of respondents said they expect financial instruments to take a larger percentage of their balance sheets over the next one to three years, while only 15 percent see that decreasing.

For more in­for­ma­tion, see the press release on the AICPA’s Web site.

It’s time to focus on the CHRO: The hidden innovation hero

Jul 01, 2019

On July 1, 2019, the National Association of Corporate Directors (NACD) released an article on how CEOs are looking to their chief human resources officers (CHROs) to help lead cultural change and drive innovation.

Innovation is top of mind for most C-suite executives and directors of companies, and both have every reason to prioritize innovation as part of the company’s strategy. According to a study by Credit Suisse, the average lifespan of a S&P 500 company is now less than 20 years compared to 60 years in the 1950s. Additionally, Mercer’s 2019 Talent Trends Survey found that 73 percent of executives predict significant industry disruption in the next three years, up sharply from 26 percent in 2018. In many industries, continued innovation is critical to a company’s ability to survive and thrive.

Review the full article on the NACD's website.

OSC takes action to reduce burden for investment fund managers

Jun 27, 2019

On June 27, 2019, the On­tario Se­cu­ri­ties Com­mis­sion (OSC) an­nounced that, effective immediately, it will no longer require investment fund managers of pooled funds to apply for approval to act as trustees. As registrants, investment fund managers are capable of acting as trustees and are already subject to a securities regulatory framework for safeguarding the assets of pooled funds.

Revised Approval 81-901 Mutual Fund Trusts: Approval of Trustees Under Clause 213(3)(b) of the Loan and Trust Corporations Act  which sets out this change, can be found on the OSC’s website. The change will come into effect immediately. 

Re­view the press re­lease on the OSC's web­site.

ASC consults on energizing Alberta’s capital market

Jun 27, 2019

On June 27, 2019, the Al­berta Se­cu­ri­ties Com­mis­sion (ASC) published ASC Consultation Paper 11-701, Energizing Alberta’s Capital Market. This consultation is seeking input on steps the ASC can take to foster a vibrant public and private capital market in Alberta while protecting investors.

The Consultation Paper summarizes research and input from preliminary consultations held to date, which were undertaken to help the ASC better understand the changes occurring in the Alberta capital market and the challenges being faced. It also includes a number of preliminary ideas designed to elicit feedback from market participants on enhancements that can be made and red tape that can be reduced. Comments and feedback should be submitted by September 20, 2019.

For further details of this initiative, refer to the press release on the ASC’s website.

IESBA Meeting Highlights June 17-19, 2019

Jun 24, 2019

On June 24, 2019, the In­ter­na­tional Ethics Stan­dards Board for Ac­coun­tants (IESBA) re­leased the high­lights of its June 17-19, 2019 meet­ing.

The Agenda was as follows:

  • Introduction
  • Highlights & Key Developments
  • Role & Mindset
  • Non-Assurance Services
  • Fees
  • eCode
  • Chairman’s Final Thoughts
  • Closing Remarks

Re­view the high­lights and the pod­cast on the IESBA's web­site.

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