Canada's Accounting Standards Setting to be Reviewed

The independent Accounting Standards Oversight Council (AcSOC) announced it is planning to address issues facing accounting standard-setting in Canada as a result of the Enron failure in the United States.

A sub-committee of AcSOC has been formed to assist the council in studying Accounting Standards Board (AcSB) research into which accounting standards might have been circumvented in the Enron case, and whether Canadian standards might be at similar risk in the future. The sub-committee will then facilitate discussion of these reports at a full meeting of AcSOC in May.

The sub-committee is chaired by Thomas Allen, QC, a partner with Ogilvy, Renault, Barristers and Solicitors. Vice-chair is The Honourable Michael Kirby, Ph.D (a full list of sub-committee members is below). Allen and Kirby also serve as chair and vice-chair of AcSOC, respectively.

AcSOC will examine what changes, if any, should be made to the priorities and programs of the AcSB to ensure that any shortcomings or vulnerabilities in Canadian accounting standards highlighted by the Enron failure are addressed on a priority basis.

"The Accounting Standards Oversight Council recognizes that a thorough consideration of Canadian accounting standards in the light of the Enron failure is an essential part of minimizing the implications of that failure for Canadian capital markets," said Allen. "AcSOC will be working closely with the Accounting Standards Board to identify any accounting and financial reporting issues raised by the Enron failure and to ensure that they are resolved carefully and expeditiously."

AcSOC will be accepting written submissions. To send a submission, contact AcSOC Secretary, Harry Klompas, at 416-204-3236 or by email at harry.klompas@cica.ca. An opportunity for oral presentations will be available at a date in the near future, to be determined.

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