Chapter 1 - Financial Reporting in Canadian Environment Flashcards
What is ASPE? Who must comply with ASPE?
ASPE is the Accounting Standards for Private Enterprises developed here in Canada. Private company’s that are not pension plans, government bodies, or not for profit organizations can use the ASPE method of accounting but they can also use the IFRS method.
What is IFRS? Who must comply with IFRS?
IFRS is the International Financial Reporting Standards. Publicly accountable enterprises must report under IFRS. However, if a Canadian company has shares listed in US stocks, they may report under US GAAP.
What are the different regulatory bodies?
1) Canadian Accounting Standards Board
2) International Accounting Standards Board
3) Financial Accounting Standards Board
4) Provincial Securities Commissions.
What is the Chartered Professional Accountants?
While typically the provincial governments have legislation and jurisdiction over the professionals, the CPA is a national organization that fosters activities on a national basis.
Where are the accounting standards of Canada enshrined within? Which legislation guides these rules?
The accounting rules are enshrined with the Chartered Professional Accountants Canada Handbook. The Canada Business Corporations Act defined these rules.
What is the Accounting Standards Board? (AsB)
A volunteer and independent committee of the CPA Canada, that is responsible for making changes to the CPA handbook after a due process, including setting up a task force and an exposure draft document that is publicly available to anyone for comment.
What is the Accounting Standards Oversight Council?
Oversees the activity of the ASB
What section is the AcSB responsible for in the CPA handbook?
They are responsible for the development of part 2 -4 of the CPA handbook. Regarding the ASPE and GAAP standards for the not for profit and pension plans.
What was the International Accounting Standards Committee?
It was an accounting committee in effect from 1973 to 2001 who sought to lessen differences in accounting standards between countries. They released International Accounting Standards (IAS 1-41) but has now been replaced by the IFRS.
What is the International Accounting Standards Board?
The predecessor of the International Standards Committee created in 2001 who created IFRS standards. They use major components of both the IAS and IFRS.
What is the International Financial Reporting Interpretations Committee? What was the predecessor?
Issue interpretations of the standards. SIC (Standard Industrial Classification)
What is the role of the IASB in Canada’s Small and Medium sized entities?
The IFRS has separate standards for the SME, however Canada has not adopted them and continue to use ASPE.
What are the IASB and FASB attempting to do?
Mitigate the differences in US GAAP and IFRS ultimately harmonizing it. Such that a firm that has shares in the States and Canada can use IFRS or US GAAP to report their information.
What is the Financial Accounting Standards Board (FASB) and the Securities and Exchange Committee (SEC)? When do these become useful for Canada standards?
They are the equivalent bodies in the USA to the Canada Accounting Standards Board and CPA. If there is a situation that is not covered in the CPA handbook we may look towards the US procurements to help guide the decisions we make,
Describe the Provincial Securities Regulations
Security regulations fall under the provincial jurisdiction, thus if a firm trades securities in Ontario or Alberta, the relevant rules and regulations must be known.
