TORONTO, Oct. 1 /CNW/ - The Canadian Institute of Chartered Accountants
(CICA) is developing a simplified accounting framework tailored to the needs
of Canada's 1.7 million owner-manager businesses.
"The new framework will be based on the existing CICA Handbook, but will
be focused solely on supporting owner-manager businesses," says Ron Salole,
CICA Vice President of Standards.
"This is a time of major change in Canadian accounting practices," Salole
says, referring to Canada's move to adopt international standards for public
companies by 2011. The Accounting Standards Board (AcSB) is also considering
changing accounting rules for private companies with significant external
users of their financial statements. The AcSB is reviewing three options for
changes to accounting for private companies with external users but has not
yet addressed the needs of businesses without external users.
"It is critical that we also address the specific needs of the
owner-managed businesses without significant external users that are Canada's
economic backbone," says Salole. "The CICA believes developing an accounting
framework for these businesses is necessary because they, like all businesses,
rely on clear, comparable financial information to manage operations, make
sound business decisions and continue the sector's role as a key engine of the
Owner-manager companies are a major economic force in Canada, accounting
for 86% of the nation's 2.2 million privately held enterprises. They employ
approximately 32% of Canadian workers and spend proportionately more on R&D
than Canada's largest companies.
To ensure the needs of this important business sector are addressed, the
CICA is developing a simplified framework based on accounting and financial
reporting standards in the existing CICA Handbook - Accounting, but focused
solely on transactions common to owner-manager businesses that do not have
significant external users of their financial information. The term
"significant external users" will be defined in the framework and generally
refers to parties such as investors or large creditors who do not have
independent access to a company's financial information. The new proposals
will be readily understood by those familiar with existing Canadian accounting
"The framework will ensure owner-manager businesses continue to have
access to clear, comparable and reliable financial information that will
enable sound decision-making and support their growth and contribution to
Canada's economy," says Salole. "It is our hope that it will be widely
accepted and adopted by the business community."
The framework will be published for comment this fall to give
owner-manager businesses and other interested parties an opportunity to review
the proposals and respond. The comment period will be open until January 31,
2008. The framework will be finalized as soon as possible thereafter and
incorporated into the CICA Handbook.
The Canadian Institute of Chartered Accountants (CICA), together with the
provincial, territorial and Bermuda Institutes/Ordre of Chartered Accountants,
represents a membership of approximately 72,000 CAs and 10,000 students in
Canada and Bermuda. The CICA conducts research into current business issues
and supports the setting of accounting, auditing and assurance standards for
business, not-for-profit organizations and government. It issues guidance on
control and governance, publishes professional literature, develops continuing
education programs and represents the CA profession nationally and
internationally. CICA is a founding member of the International Federation of
Accountants (IFAC) and the Global Accounting Alliance (GAA).
For further information:
For further information: or to arrange an interview, contact: Mary Ann
Prychoda at (416) 204-3292, or by email at email@example.com; Peter
McLean at (416) 204-3268, or by email at firstname.lastname@example.org