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Securities - OSC Image

OSC makes doing business easier for Ontario market participants

Nov 19, 2019

On November 19, 2019, the Ontario Securities Commission (OSC) moved forward with more than 100 specific actions to reduce burden for market participants doing business in Ontario’s capital markets. As these changes are made, individuals and businesses regulated by the OSC can expect to see enhanced service levels, less duplication and a more tailored regulatory approach.

The changes will make it easier to start, fund and grow a business in Ontario, and make Ontario’s markets more competitive. While these initiatives will benefit businesses of all sizes, the OSC has carefully considered opportunities to benefit small and medium-sized companies, which make up nearly 70 per cent of those regulated by the OSC, and smaller registrant firms, which make up nearly a third of Ontario registrants.

Highlights include:

  • Small and medium-sized businesses that are registrants will see clear service standards for compliance reviews, and, in appropriate cases, be able to hire a Chief Compliance Officer (CCO) who acts in that role for other, unaffiliated firms. Companies will see more support for raising capital in the public markets, through a confidential prospectus review process prior to announcing an IPO or other financing.
  • Innovative businesses and startups will receive more flexibility in the OSC’s approach to registration, resales in the secondary market, and other regulatory requirements. Individuals applying to be CCO of fintech firms will be assessed based on their qualifications and on their broader business experience, and how the experience aligns with the firm’s business model. Startups seeking financing will see crowdfunding rules harmonized across the country.
  • Large businesses will see duplicative filing requirements eliminated in investment funds and registration rules; delivery of documents, like prospectuses, electronically; and measures to facilitate the registration of multiple CCOs for large registrants with multiple lines of business. Public companies will have the ability to conduct at-the-market offerings without obtaining prior exemptive relief.

The 107 initiatives outlined in the report address 34 underlying concerns identified by staff during the consultation process. The initiatives will address those concerns by clarifying regulatory expectations, improving technology, enhancing coordination with other regulators, and providing greater support during regulatory interactions.

Review the press release and report on the OSC's website.

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Integrated thinking, reporting and sustainability

Nov 19, 2019

On November 19, 2019, Accounting Today released an article on how we work with standards and systems that are entirely wrapped around the notion of protecting the investor and the returns due to them. However, these views are being challenged and we see it in current political debates around the world.

Individuals are critical of the short-termism that current systems encourage, and they are reflecting on how to change things for the better. Now the focus is upon shifting to wider societal obligations — how to deal with the current issues of jobs and employment, long-term profitability, sustainability and the implementation of technology? These real issues are the ones that past business leaders have not had to deal with. However, they represent an opportunity for the accounting profession to play a role in engaging with clients, businesses and colleagues, to help society evolve so it becomes resilient for the long term.

Review the full article on Accounting Today's website.

IAASB - Assurance Image

ISA 540 (Revised) implementation support: Audit client briefing

Nov 19, 2019

On November 19, 2019, the International Standard on Auditing (ISA) 540 (Revised) Implementation Working Group released an Audit Client Briefing (Briefing) based on the Canadian Auditing Standard (CAS) Audit Client Briefing of the Chartered Professional Accountants of Canada (CPA Canada), published in October 2019 and is used with permission of CPA Canada.

The purpose of this Briefing is to make chief financial officers, other senior management responsible for financial statement preparation, and staff directly involved in determining accounting estimates aware of matters to consider in preparing for the auditor’s requests pertaining to ISA 540 (Revised), Auditing Accounting Estimates and Related Disclosures.

This Briefing provides an overview of:

  • Management’s responsibilities in determining when accounting estimates are needed;
  • Management’s responsibilities regarding the main components of an estimation process; and
  • The impact on management because of changes to the auditor’s responsibilities, including broad questions auditors are likely to ask those involved in the detailed aspects of the estimation process.

This Briefing does not constitute an authoritative pronouncement of the International Auditing and Assurance Standards Board (IAASB), nor does it amend, extend or override the ISAs or other of the IAASB’s International Standards. It is not meant to be exhaustive and reading this Briefing is not a substitute for reading the ISAs.

Review the press release and Briefing on the IAASB's website.


Summary of the October 2019 ASAF meeting now available

Nov 18, 2019

On November 18, 2019, the International Accounting Standards Board (IASB) staff published a summary of the Accounting Standards Advisory Forum (ASAF) meeting held in London on October 3, 2019.

The topics covered during the meeting were the following (numbers in brackets are ref­er­ences to the cor­re­spond­ing para­graphs of the summary):

  • Financial instruments with characteristics of equity (1–7): The ASAF discussed the various project alternatives and were supportive of the IASB’s decision to make clarifying amendments to IAS 32. Several members also expressed that a fundamental review to develop a new approach to distinguishing financial liabilities from equity is warranted.
  • Dynamic risk management (8–16): The ASAF was given an update on the dynamic risk management project and provided feedback on how to perform an outreach on the core version of the DRM model.
  • IBOR reform and its effects on financial reporting (17–22): The ASAF was given an update on the IBOR reform project and provided feedback on potential accounting issues to be considered during the project’s Phase II.
  • Disclosure initiative — Accounting policy disclosure (23–30):  The ASAF provided preliminary views on Exposure Draft, Disclosure of Accounting Policies.
  • Agenda planning and 2020 Agenda Consultation (31–38) — The ASAF discussed the proposed agenda for its December 2019 meeting and the Request for Information for the 2020 Agenda Consultation.
  • Accounting policies and accounting estimates (39–43): The ASAF discussed KASB’s research project A Revisit to the Definition of Accounting Estimates.

Review the full summary on the IASB's website.

IAASB - Assurance Image

Deloitte Canada's Julie Corden appointed to the IAASB

Nov 18, 2019

On November 18, 2019, the International Auditing & Assurance Standards Board (IAASB) announced their new appointments and re-appointments.

"It is a pleasure to welcome Ms. Almond, Ms. Jackson, and Ms. Corden, now in a permanent capacity, to the International Auditing and Assurance Standards Board.  I look forward to the diverse perspectives they will bring to our group of passionate, dedicated volunteers.  I am also delighted that Fiona Campbell will serve as Deputy Chair for another year," said Tom Seidenstein, IAASB Chair.  " I want to thank Karin French and Marek Grabowski for their steadfast service to our board.  Their contributions were invaluable, and we are grateful for their dedication and commitment".

Review the press release on the IAASB's website.

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Thoughts on the BRT Statement on the purpose of the corporation

Nov 18, 2019

On November 18, 2019, the National Association of Corporate Directors (NACD) published a blog that discusses the Business Roundtable's (BRT) new “Statement on the Purpose of a Corporation.”

The new statement is, in many ways, a reversion to the BRT’s 1981 “Statement on Corporate Responsibility.” The 2019 statement supersedes the 1997 “Statement on Corporate Governance” which had declared that “the paramount duty of management and of boards of directors is to the corporation’s shareholders.” None of this, of course, is news to the regular readers of the financial press. The new statement has received a tremendous amount of attention from investors, journalists, academics, and politicians. It will be carefully considered by public company management teams and boards of directors, even those not part of the BRT.

Review the full blog on the NACD's website.

FASB (US Financial Accounting Standards Board) (lt blue) Image

FASB issues ASUs to defer effective dates of certain major standards

Nov 15, 2019

On November 15, 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates (ASUs) 2019-09 and 2019-10, which delay certain effective dates of four major standards.

ASU 2019-09 gives all insurance entities that issue long-duration insurance contracts (e.g., life insurance and annuities) additional time to implement ASU 2018-12 (codified in ASC 944).

ASU 2019-10 gives private companies, not-for-profit entities, and certain small public companies additional time to implement the Board’s standards on current expected credit losses (ASC 326), derivatives and hedging (ASC 815), and leases (ASC 842).

Review the press release on the FASB’s website.

IESBA (International Ethics Standards Board for Accountants) (lt gray) Image

IAASB seeks public comment on exposure draft of conforming amendments to the international standards as a result of the revised IESBA Code

Nov 15, 2019

On November 15, 2019, the International Auditing and Assurance Standards Board (IAASB) released an Exposure Draft focused on conforming amendments to the International Standards as a result of the revised International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code). Comments are requested by January 10, 2020.

The project aims to align the IAASB’s International Standards with the revisions to the IESBA Code by way of conforming amendments, thus ensuring that the IAASB's International Standards can continue to be applied together with the IESBA Code.

This project falls under the umbrella of IAASB-IESBA coordination, a strategic commitment of the two Boards, and builds on their overarching commitment for enhanced connectivity and coordination to better serve the public interest.

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

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How and why human capital disclosures are evolving?

Nov 15, 2019

On November 15, 2019, the Harvard Law School Forum on Corporate Governance and Financial Regulation released an article on how the talent paradigm is shifting.

A company’s intangible assets, which include human capital and culture, are now estimated to comprise on average 52% of a company’s market value. At the same time, the nature of work is rapidly evolving, new generations are reshaping the workforce and businesses are redefining long-term value and corporate purpose through a stakeholder lens. In this era of disruption, talent and culture have leapt to the forefront of thinking around enabling strategy and innovation and creating long-term value. Accordingly, human capital has rapidly emerged as a critical focus area for stakeholders.

Review the full article on the Harvard Law School Forum's website.

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Alignment on risk management is dangerously askew

Nov 15, 2019

On November 15, 2019, the National Association of Corporate Directors (NACD) released a blog on how boards are under increasing pressure from investors, regulators, and the general public to adapt to and better manage the factors that influence how organizations are created, grow, and succeed—and to do so with transparency and accountability. This requires unparalleled collaboration and harmony of purpose among those charged with risk management.

But findings from a new Institute of Internal Auditors (IIA) report paint a troubling picture that is anything but harmonious. Worse yet, the report’s key findings suggest that boards generally have an overly optimistic—and potentially dangerously skewed—view of how risks are managed.

Review the full blog on the NACD's website.

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