Independent Public Body Established to Oversee Canadian Auditing Standards

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Canada's Chartered Accountants have announced the establishment of an independent public body to oversee the setting of auditing and assurance standards in Canada, and at the same time announced its first Chair.

Prominent business and commercial lawyer James C. Baillie will chair the new Auditing and Assurance Standards Oversight Council (AASOC), which will oversee the Assurance Standards Board (ASB), providing input, strategic direction and the perspective of users into the setting of auditing and assurance standards in Canada.

AASOC will have between nine and 12 members, with the chair and majority of members drawn from outside the audit profession.

“In the wake of Enron and similar situations in the United States, public confidence in auditing and assurance standards is more important than ever,” said Baillie “Good oversight of the standard-setting process will contribute to the quality of that process and to public confidence. I look forward to working with other members of AASOC and with all of the constituencies served by the standard-setting process in helping to ensure that auditing and assurance standards meet the needs of today's users of financial statements.”

In addition to serving as Counsel at law firm Torys LLP, in Toronto, Baillie is Chair of the Independent Electricity Market Operator (Ontario), a director of Sun Life Financial Services of Canada Inc., and non-executive Chair of Corel Corp. He has had a career-long involvement in public policy issues affecting the capital markets, at the federal and provincial levels, and served as Chairman of the Ontario Securities Commission from 1978-1980.

The Assurance Standards Board is the national body with the authority and responsibility for setting auditing and assurance standards for the public and private sectors. The ASB continually aims to improve the quality of these services by developing and issuing guidance and generally accepted auditing standards (GAAS) and other assurance standards.

“The establishment of AASOC is another important step by the CA profession in ensuring public confidence in our capital markets and financial reporting system,” said David Smith, President and CEO of the Canadian Institute of Chartered Accountants (CICA). “It will provide independent oversight of the development of standards by which financial statements are audited, with the aim being to ensure that auditing and assurance standards are not only clear and transparent, but the standard-setting process itself is also open and independent, and subject to public scrutiny.”

The CICA, Provincial CA Institutes/Ordre, regulators and other key stakeholders have been working together to respond to Enron and similar situations. Initiatives to date are in four key areas: Accounting and Assurance Standards; Auditor Independence; Oversight and Discipline; and Quality Control. For more information, visit "The Profession Responds to Enron".

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