Waiting in line to buy some stamps at a mobile post office this week, the guy standing in front of me tried to talk the postal worker into waiving the clearly marked "No International Mail" rule for a stack of wedding invitations he needed to send to Canada.
The postman did crack a small smile when the groom-to-be sang the first line to "O Canada," and attempted to make the case that as far as international mail is concerned, "Canada doesn't really count, eh?"
Nearly every week brings me news and press releases from the International Accounting Standards Board and the International Federation of Accountants, plus such stateside favorites as the Public Company Accounting Oversight Board and the Financial Accounting Standards Board. Never mind regulatory standbys like the U.S. Securities and Exchange Commission.
They all make for a delightful blend of alphabet soup in my e-mail inbox, but it wasn't until the Canadian Public Accountability Board issued its second public report last week that I even realized our neighbors from the Great White North had been absent from the mix.
It was in September 2002, a few months after the passage of the Sarbanes-Oxley Act led to the creation of the PCAOB, that the IASB and FASB signed on to an agreement to work together on a short-term convergence project to eliminate the differences between the IASB's International Financial Reporting Standards and the Generally Accepted Accounting Principles used in the United States.
Around that same time, in the summer of 2002, federal and provincial financial and securities regulators in Canada, as well as the country's chartered accountants, announced the creation of the CPAB, a new independent public oversight system for accountants and accounting firms that audit reporting issuers. The board is required to submit at least one public report annually. By June of the following summer, the Canadian Securities Administrators released a draft rule that would require auditors of public companies to be members in good standing of the CPAB.
The board's first report, released in October 2004, focused on the work the Big Four accounting firms were doing in the county. The second report, based on the inspection of 23 public accounting firms, which collectively audit more than 5,500 public companies, covered about 80 percent of Canada's public companies. Both reports struck a chord familiar to anyone who has read the reviews of auditors working in the United States -- with the CPAB recommending nearly across the spectrum for substantial improvements to be made to firm's internal controls, their tendency to accept clients that pose an unacceptable risk and their failure to implement new auditor independence rules.
Making sure the numbers in Europe are based on the same principles as the numbers used in the United States, and vice versa, is an important aspiration for the international rulemakers, especially as globalization increasingly becomes a matter of course for businesses. But much closer to home, Canada is grappling with nearly identical issues -- from the staffing needs of its accounting companies to how to better provide training on current accounting and auditing rules -- all the while hoping it won't ever have to deal with the fallout from an Enron or a WorldCom implosion.
It's fine to dabble in the international, but I'd like to hear more about cross initiatives between the CPAB and the PCAOB that revolve around idea sharing, with the ultimate goal of bettering the work the profession as a whole is performing, rather than the semantics involved in accounting for pension deficits or defining financial instruments. I've been as remiss as anyone in failing to consider what Canada might be able to contribute to the discussion, and hope it doesn't take another year before I hear from the CPAB again.
