November 26, 2010
The International Watch Centre for Financial Information was founded to assess the repercussions of the introduction in Canada of new accounting standards for reporting financial information, on January 1 next year. There is to be a major change in accounting practices across the country, affecting the some 5,000 firms listed on the stock market and 2,000,000 private companies.
Following a decision by the Canadian Institute of Chartered Accountants (CICA) in 2006, publicly accountable enterprises (listed companies) must comply with international financial reporting standards (IFRS) starting in the new year, while private companies will be subject to a new, “lighter” version of the Generally Accepted Accounting Principles (GAAP) now in effect in Canada (but may adopt IFRS if they wish) in their financial reporting.
The CICA decision is intended to harmonize Canadian accounting practices with international standards, which were adopted by the European Union in 2005. The United States, on the other hand, is going it alone and maintaining its own highly detailed standards calling for the processing of a large quantity of data.
“This is a very topical issue,” notes Louise Martel, FCA, Full Professor with the Department of Accounting Studies, and the new Centre’s founder and Director. “We will be serving as a centre for research, reference and action on matters relating to the consequences of the adoption of this new framework. We will monitor the application of the new standards and compile documentation on companies’ choices and the repercussions for the different stakeholders. Our goal is to improve the understanding of IFRS standards and come up with a set of best practices.”
To fulfill its mission, the Centre has established an Advisory Committee consisting of a number of experts: Laurent Liagre, Senior Manager, Ernst & Young; Andrée Lavigne, Principal – Research Studies, CICA; Martin Cloutier, Partner, Mazard Harel Drouin; Linda Lupien, Vice-President (IFRS), National Bank of Canada; and Nathalie Labelle, Partner, KPMG.
The Centre’s very first public activity was held on November 25 at HEC Montréal, a seminar entitled “Only 36 days until 2011: It’s time to hone your communications strategy or your strategic communications.” The 70 participants heard three speakers: Michel Bergeron, Partner with Ernst & Young; Patricia Curadeau-Grou, Chief Financial Officer and Executive Vice-President – Finance, Risk and Treasury, National Bank Financial Group; and Michel Nadeau, Executive Director of the Institute for Governance of Private and Public Organizations.
The Centre has already started offering training, in collaboration with the Executive Education Department at HEC Montréal, in the form of two seminars: International Financial Reporting Standards and Their Impact on Canadian Businesses and Les nouvelles normes comptables pour les entreprises à capital fermé (ECF) : caractéristiques et impacts (new accounting standards for private enterprises: features and impacts) (in French only).