There are a number of impending changes on the horizon, whether you are a preparer or user of financial statements. Starting in January 2011, your organization will have to choose a new financial reporting framework as the old Canadian GAAP is gone (not-for-profit organizations still have one more year). If your financial statements are audited, you will also see a new auditors' report appended to your financial statements.
If your entity's year-end is December 31, 2010, the auditor's report will have a new look and additional content. Besides the report being much longer, it has a new title – Independent Auditors' Report. The new title is intended to emphasize the independent role of the auditor from the entity and its management. The revamped report now has subtitles and there is additional information outlining management's and auditors' responsibilities. Other pertinent matters for the reader may need to be included in the auditors' report depending on the circumstances. Your audit engagement team will discuss the report and other changes that may affect your audit before commencing the engagement.
If your organization is considered a "public" entity, which includes organizations that hold assets in a fiduciary capacity for a broad group of outsiders, starting January 1, 2011 you must prepare your financial statements using the International Financial Reporting Standards (IFRS). You should note that some regulatory agencies are mandating the use of IFRS even if you don't meet the public entity criteria. Private entities will start using Accounting Standards for Private Enterprises, which have been developed in Canada. Not-for-profit organizations have until January 1, 2012 when they will change over to financial reporting standards, which will be based on the private enterprise standards with supplemental standards addressing issues specific to not-for profits. There are additional reporting requirements in the first year the entity changes over to the new framework.
A number of resources are available to help you navigate these changes, not the least of which being your engagement team members at Soberman. We can advise and guide you through these challenging conversions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.