www.lexisnexis.ca Vol. 30, No. 10 September 2014
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Pressure builds on audit panels as threats and liabilities abound

The role of the audit committee is evolving, partly because of increasing demands being placed on members and in part because of the rapidly changing landscape in which companies operate.

"Investors and other stakeholders are asking to hear more from audit committees generally. They know the audit committee plays a key role, but they donít know what they do. There is uncertainty," said Alaina Tennison of PwC Canada in Toronto.

Investors know what they want, she added. "They want to see more disclosure around risk areas. Itís about stepping outside of strictly financial areas. They want more timely reporting."

Cool reception to CRA program

The Chartered Professional Accountants of Canada and Certified General Accountants Association of Canada have suggested substantive, wide-ranging amendments to the Canada Revenue Agencyís proposed Registration of Tax Preparers Program.

While the national tax agency has not responded to the bodiesí joint submission, including the spectre of a possible CRA intrusion into CPA/CGA territory, a key concern is that registration in the RTPP is supposed to be open to all tax preparers, regardless of whether they are professional accountants or have undergone any competency training to prepare tax returns.

"As professional accountants, we strongly believe that the public interest in the tax system depends on a tax preparerís personal integrity and technical tax competency. Factors such as codes of personal conduct and education and training for tax preparation should be a fundamental part of the registration program," CPA Canada and CGA Canada commented.

Survey says: Chase big fish more, small fry less

The Canada Revenue Agency diligently investigates the average taxpayer, but they give up too easily when it comes to pursuing the wealthy who sock money away in offshore accounts, especially when the latter hire tax lawyers, tax intermediaries allege in a CRA-commissioned survey of attitudes towards the national tax body.

Walker Consulting Group conducted 12 focus groups in Toronto, Montreal and Vancouver with individual Canadians, representatives from small and medium enterprises (SMEs), and tax intermediaries. Their comprehensive findings could have a big impact on how CRA does business going forward.

"Intermediaries raised a few significant questions about the integrity of the tax system. Specifically they raised questions about the resources dedicated to those larger players who put money in offshore tax havens, versus smaller players who claim a few too many dollars in charitable donations," said the report.

Board unveils financial instruments standard

The International Accounting Standards Board has put the final piece of its financial instruments puzzle in place and issued the IFRS 9 standard, which aims to be more logical and simpler to use than the old IAS 39.

Although it was one of the major convergence projects launched by the IASB and the U.S. Financial Accounting Standards Board more than a decade ago, the two bodies could not come to terms and have gone their separate ways on the standard. The IASB released IFRS 9 on July 25, calling it the "final element" of its "comprehensive response to the financial crisis." It includes a simplified model for financial-instrument classification and measurement; a single, forward-looking expected loss impairment model; and a reformed approach to hedge accounting. The new standard will come into effect on January 1, 2018, with early application permitted.

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