Although the Canadian Securities Administrators is on target with proposed changes to financial reporting requirements, the regulations must be fine-tuned. Furthermore, companies and auditors need a better explanation of how to comply with them.
That’s the meat of a submission to the CSA Thursday from participants in a roundtable discussion organized by the Institute of Chartered Accountants of Ontario and the Ontario Chamber of Commerce.
Earlier this year, the CAS released proposed regulatory changes (Multilateral Instruments 52-109 and 52-111) that would bring Canadian requirements in line with those of Section 404 of the U.S. Sarbanes-Oxley Act. This requires CEO and CFO certification of a public company’s systems of internal control of financial reporting and an auditor’s report on their efforts. The CSA originally asked for comment by June 6, 2005.
The comment period has been extended to June 30, 2005, which was the first of five recommendations made by the roundtable.
The group also recommended that:
- the CSA and Ontario Securities Commission commit to the same standards of compliance and enforcement that the U.S. Securities and Exchange Commission and Public Company Accounting Oversight Board committed to on May 16, 2005;
- the CSA and OSC commit to high-level principles that will help define the proposed assessment process;
- a Canadian equivalent to the Securities and Exchange Commission Advisory Committee on Smaller Public Companies be established to look for ways to help small companies comply;
- audit firms be reassured that the use of reasonable judgment will be recognized and respected by regulators.