Proposed changes to ethics standards and NFP accounting standards

Proposed changes to ethics standards and NFP accounting standards

Comments Needed!

There are four current Exposure Drafts that may be of interest to Alberta CPAs. Three, from the International Ethics Standards Board (IESBA), deal with ethics, and the fourth, from the Accounting Standards Board (AcSB), deals with not-for-profit standards. Alberta CPAs are encouraged to take the time to review the Exposure Drafts and provide comments in order to ensure feedback is taken into consideration.

The three IESBA Exposure Drafts are:

  • Improving the Structure of the Code of Ethics for Professional Accountants – Phase 2 which includes restructured select sections of the Code, including recently finalized provisions addressing accountants’ response to non-compliance with laws and regulations (NOCLAR), long association of audit firm personnel with an audit or assurance client, and ethical issues that professional accountants in business (PAIBs) often face (Structure ED-2);
  • Proposed Revisions Pertaining to Safeguards in the Code—Phase 2 and Related Conforming Amendments which includes revisions to the safeguards-related provisions in the independence sections of the Code pertaining to non-assurance services provided to audit and other assurance clients (Safeguards ED-2); and
  • Proposed Revisions to Clarify the Applicability of Provisions in Part C of the Extant Code to Professional Accountants in Public Practice which seeks to clarify the applicability of PAIB provisions to professional accountants in public practice (Applicability ED)

Comments for the first ED above are due May 25, and are due April 25 for the other two.

As well, ACsB has been busy since issuing the April 2013 joint AcSB/Public Sector Accounting Board (PSAB) Statement of Principles, Improvements to Not-for-Profit Standards.” For example, the organization has:

  • carried out extensive consultations to reach its stakeholders, including several cross-county roundtable meetings as well as various private meetings with interested groups;
  • developed its 2016-2021 Strategic Plan, which reaffirms its commitment to retain and improve accounting standards for not-for-profit organizations in Part III of the CPA Canada Handbook – Accounting;
  • established  its Not-for-Profit Advisory Committee, which provides expertise and input to the AcSB on issues relating to accounting standards for private sector NFPOs; and
  • approved three projects: Accounting Standards Improvements for Not-for-Profit Organizations (NFPOs), Contributions — Revenue Recognition and Related Matters, and Reporting Controlled and Related Entities by NFPOs.

As a result of all this activity, the AcSB recently issued its Exposure Draft, “Accounting Standards Improvements for Not-for-Profit Organizations.” The proposals relate to tangible capital assets, intangible assets, works of art, historical treasures and similar items not part of a collection, and collections held by NFPOs.

The Exposure Draft is open for comment until May 31, 2017. Comments, with specific reasons for the support or objection to the proposals, are especially important. As always, the AcSB will redeliberate the proposals in light of comments received. Part of the deliberation process includes consultations with its Not-for-Profit Advisory Committee.

Get more information on this project and keep up to date on its developments via Accounting Standards Improvements for Not-for-Profit Organizations project page.

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