CICA Assurance Standards Board Strategic Planning Process

1
CICA Assurance Standards BoardStrategic Planning
Process

• US Auditing Standards Board
• July 24, 2002

2
Presenters

• Peter Gregory, Chair Canadian ASB
• Paul Lohnes, Director, Assurance Standards - CICA

3
Objectives today

• Introduce draft plan
• Receive comments and questions
• Set stage for formal AICPA response by September
  30, 2002

4
Overview

• Introduction to Canadian standard-setting
• Strategic planning process
• Strategic planning framework
• Planning environment
• Long-term goals
• Objectives and related strategies
• Comments and questions

5
Introduction to Canadian standard-setting

• Accounting standards
• Accounting Standards Oversight Council
• Accounting Standards Board
• Public sector accounting standards
• Public Sector Accounting Board
• Assurance Standards Board

6
Strategic Planning Process

• Appointed steering group Fall 2001
• Board retreat March 2002
• Survey on potential projects
• Responses to draft - September 30
• Final - December 31, 2002
• Annual operating and communication plans
• Revise within three years

7
Strategic planning framework

• Vision statement
• The ASB envisions an environment where
• Decision makers in all sectors of society have
  the information they need to assess and to
  improve organizational performance
• The relevance, reliability and credibility of
  this information has been significantly enhanced
  by assurance services
• Decision makers understand and value assurance
  services

8
Strategic planning framework

• Mission statement
• Assist the profession in serving the public
  interest by enhancing the quality of assurance
  services
• Support the growth and relevance of such services
  by improving and disseminating guidance and
  standards for a broad range of assurance and
  related services
• Ensure standards and guidance reflect best
  practice and meet the needs of decision makers
  and assurance providers
• Commit to international harmonization and work
  with the IAASB and other national standard
  setters toward that goal

9
Strategic planning frameworkASB stakeholders
10
Planning environment

• International standard-setting developments
• US standard-setting developments
• UK developments
• Canadian regulatory developments
• Oversight of the ASB

11
International developments

• IFAC four-pronged restructuring and
  strengthening program
• IFAD and Forum of Firms
• Program to monitor compliance of IFAC member
  bodies
• Strengthening processes and broadening membership
  of IAPC
• Proposal for a Public Oversight Board

12
International developments

• Recommendations of IAPC Review Task Force
• Membership changes
• Public meetings and agenda papers
• Work closely with national standard setters
• Increase staff resources and funding
• Rename International Auditing and Assurance
  Standards Board (IAASB)

13
International developments

• IOSCO endorsement project
• European Commission to endorse the use of ISAs in
  Europe by 2005
• IAASB undergoing rapid and substantial change
• Not yet appropriate to adopt ISAs fully

14
US standard-setting developments

• Panel on Audit Effectiveness
• AICPA international strategic plan
• Changes to regulation of US accountancy
  profession
• Canadian actions
• Fraud
• Audit risk

15
Recent business failures in the US

• Corporate disclosure in the spotlight
• Restoring public confidence actions by the
  Canadian accounting profession
• Public hearing on accounting standards
• SPEs, guarantees, stock options, etc.
• Strengthening independence rules
• Canadian Public Accountability Board

16
Recent business failures in the UK

• New system of non-statutory independent
  regulation
• UK APB has majority of independent members
• Canada looking at oversight

17
Canadian securities regulators initiatives

• Modernize and harmonize
• Rule for long form prospectuses
• Continuous disclosure
• ASB response new EDs on auditors involvement
  with offering documents and annual reports

18
Themes for setting long-term goals

• Canadian planning environment has changed
• Significant momentum toward global assurance
  standards
• Need to restore public confidence

19
Revised long-term goals

• Set high-quality standards that enable the
  profession to serve the public interest
• Support and participate in the development of
  high-quality global assurance standards
• Maintain a strong Canadian assurance
  standard-setting capability to ensure public
  confidence

20
Serving the public interest

• ASBs goal is to set high-quality assurance
  standards
• For private and public sectors
• Used by a wide range of assurance providers
• Reflect the changing global environment
• Harmonized with international standards
• Minimal conflict with US standards
• Easily interpreted and applied
• Closely aligned with Canadian accounting standards

21
Global assurance standards

• Work with IAASB to develop international
  standards that will ultimately be the high
  qaulity ones used throughout the world
• Canadian standards must apply to
• Local and regional markets
• Canadian entities operating in US and global
  markets

22
Global assurance standards

• Ultimately, but not within this 3-year plan, a
  Canadian Handbook with same standards and layout
  as IAASB, with same standards, plus
  Canadian-specific material
• Convergence criteria to monitor annually

23
Ensuring public confidence

• Develop high-quality Canadian assurance standards
• Play strong role in developing global standards
• Due process to ensure standards help profession
  serve public interest
• Public oversight

24
Objectives and related strategies

• Set Canadian standards for the public and private
  sectors that converge with IAASB standards
  whenever possible, while minimizing conflicts
  with US standards
• Support the IAASB as it develops its standards,
  while fulfilling the ASBs criteria for
  convergence with international standards
• Follow a due process that is understandable, open
  to stakeholders, adaptable, sensitive to
  stakeholders ability to implement new standards,
  and efficient

25
Converging standards

• Strategies
• Expose IAASB standards and adopt unless legal,
  regulatory or other aspects of Canadian
  environment require different solution
• Monitor Canadian environment and develop national
  standards to respond to legislation, regulation,
  etc
• Monitor US and minimize new conflicts

26
Converging standards

• Performance measures
• Increase of Canadian standards converged with
  IAASB
• Minimize new conflicts with US standards

27
Support the IAASB

• Strategies
• Promote consideration of the needs of auditors of
  public and non-public entities, public and
  private sectors, large and small firms
• Work to develop partnership of Canada and other
  national standard setters with IAASB
• Exchange views with, and give technical support
  to, IAASB members from Canada

28
Support the IAASB

• Strategies
• Provide technical input on IAASB agenda materials
  and projects
• Identify opportunities for joint projects with
  IAASB and national standard setters
• Provide staff resources for IAASB projects that
  will result in new or improved Canadian standards

29
Support the IAASB

• Strategies
• Provide support to Canadian securities regulators
  involved with IOSCO endorsement
• Monitor status of convergence criteria
• Communicate convergence objectives and due
  processes to Canadian stakeholders

30
Support the IAASB

• Performance measures
• Increase number of joint projects with IAASB
  and/or other national standard setters
• Submit timely responses to IAASB EDs that reflect
  input from Canadian stakeholders
• Undertake national projects only to address
  unique Canadian circumstances
• Expand the range and nature of IAASB contacts

31
Due process

• Strategies
• Review ASB processes
• Continue to communicate project priorities,
  status of projects, meeting agendas and decisions
• Communicate more with stakeholders to understand
  their needs and satisfaction level, and to revise
  project priorities

32
Due process

• Strategies
• Assess resources required to meet goals of
  operating and communications plans
• Maintain and enhance links with provincial
  institutes, CICA groups and others, to ensure
  appropriate implementation guidance given to
  stakeholders

33
Due process

• Performance measures
• Achieve the ASBs performance standards
• Increase number and type of two-way
  communications with stakeholders
• Achieve high level of stakeholder satisfaction

34
Conclusion

• Commitment to convergence
• Influencing IAASB
• Keeping close to US standards
• High quality must prevail
• Restoring public confidence

35
Comments and Questions