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News

IFRS - SEC Image

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.

PSAS - IPSASB Image

IPSASB issues updated IPSAS-IFRS alignment dashboard

Jul 02, 2019

On July 2, 2019, the In­ter­na­tional Pub­lic Sec­tor Ac­count­ing Stan­dards Board (IP­SASB), which develops the of International Public Sector Accounting Standards (IPSAS) for financial reporting by governments and other public sector entities, has released an updated IPSAS-IFRS alignment dashboard showing how far individual IPSAS are aligned with corresponding IFRSs.

The alignment dashbord was updated for the June 2019 IPSASB meeting. It also offers a table showing for which IFRSs there is no IPSAS equivalent and whether the IPSASB intends to fill that gap.

Please click to access the updated dashboard on the IPSASB website.

US_AICPA Image

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.

IIRC (International Integrated Reporting Committee) Image

Corporate Reporting Dialogue publishes paper on transparency and accountability

Jul 02, 2019

On July 2, 2019, the Corporate Reporting Dialogue (CDP)—an initiative convened by the International Integrated Reporting Council (IIRC) bringing together the major international reporting frameworks—issued a position paper that sets out the seven key principles report preparers should follow for achieving transparency and accountability.

In the paper, entitled “Understanding the value of transparency and accountability”, CDP (consisting of the Climate Disclosure Standards Board, the Global Reporting Initiative, the International Accounting Standards Board, the International Integrated Reporting Council, the International Organization for Standardization and the Sustainability Accounting Standards Board) set out seven principles of transparency and accountability that they commonly believe are fundamental to corporate reporting: materiality, completeness, accuracy, balance, clarity, comparability and reliability.

Participants of the Dialogue have committed to promoting the application of these principles for the wider reporting landscape in future interactions or partnerships, as part of their commitment to providing greater clarity to the reporting landscape on how to use the individual frameworks of Dialogue participants to achieve effective, holistic reporting.

The paper can be accessed by visiting the Corporate Reporting Dialogue website.

IFRS - IASB Image

IASB posts webcast on IFRS IC and IASB agenda decisions

Jul 02, 2019

In April 2019, the Trustees of the IFRS Foundation issued an updated IFRS Foundation Due Process Handbook for public comment. Clarifications regarding the role and status of agenda decisions published by the Interpretations Committee (IFRS IC) and amendments to make agenda decisions a tool for the Board were the most prominent proposed amendments.

In the context of the proposed amendments, the IASB has posted a webcast with IASB Chair Hans Hoogervorst, IASB Vice-Chair Sue Lloyd and IFRS Foundation staff member Sam Prestidge that discusses some of the main elements of due process around agenda decisions.

The 13 minute webcast can be accessed through the press release on the IASB website.

CPAB - Assurance Image

CPAB response to IAASB Exposure Drafts for ISQM

Jul 02, 2019

On July 2, 2019, the Canadian Public Accountability Board (CPAB) released its comments on the IAASB’s Exposure Drafts for ISQM 1, ISQM 2 and ISA 220.

CPAB oversees all firms that audit reporting issuers; we have experience in overseeing firms that vary in size and nature. They have found that the most relevant factor to consider in assessing the need for a quality management system is the nature of the engagements that a firm performs, and not the firm’s size, nature or circumstances. The exposure draft provides significant latitude to firms to opt out of the requirements due to their nature and circumstances (para 5), which they believe dilutes the proposed standards. They would strongly encourage the IAASB to reconsider its approach in this area.

They believe the IAASB could further enhance the exposure draft in a few key areas, by:

  • Adopting a more proactive approach to achieving quality results in the design and implementation of responses to quality risks, with greater emphasis on preventative measures;
  • Adding greater specificity to how the quality management system framework is defined so that it can be tested for operating effectiveness; and
  • Identifying the potential for conflict within the firm structure and including further guidance to foster skepticism and an appropriately independent mindset at different levels and locations.

Review the comments on the CPAB’s website.

CAQ Image

Hyperinflationary economies - updated IPTF watch list available

Jul 02, 2019

IAS 29 'Financial Reporting in Hyperinflationary Economies' defines and provides general guidance for assessing whether a particular jurisdiction's economy is hyperinflationary. But the IASB does not identify specific jurisdictions. The International Practices Task Force (IPTF) of the Centre for Audit Quality (CAQ) monitors the status of 'highly inflationary' countries. The Task Force's criteria for identifying such countries are similar to those for identifying 'hyperinflationary economies' under IAS 29.

The IPTF's discussion document for the May 21, 2019 meeting is now available and states the following view of the Task Force:

Countries with three-year cumulative inflation rates exceeding 100%:

  • Angola
  • Argentina
  • Democratic Republic of Congo
  • South Sudan
  • Sudan
  • Venezuela

Countries with projected three-year cumulative inflation rates exceeding 100%:

  • Islamic Republic of Iran
  • Yemen
  • Zimbabwe

Countries where the three-year cumulative inflation rates had exceeded 100% in recent years:

There are no countries in this category for this period.

Countries with recent three-year cumulative inflation rates exceeding 100% after a spike in inflation in a discrete period:

  • Suriname

Countries with projected three-year cumulative inflation rates between 70% and 100% or with a significant (25% or more) increase in inflation during the current period

  • Liberia
  • Libya

The full list, including exact numbers, detailed explanations of the calculation of the numbers, and observations of the Task Force are available on the CAQ website. We also offer the overview of the IPTF's assessment of hyperinflationary jurisdictions at the end of our Deloitte Global summary of IAS 29.

United States Image

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.

Securities - OSC Image

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.

Securities - ASC Image

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.

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