A view from over the brow - 2. Auditor independence in Europe. Canada accounts for pension costs
A view from over the brow - 2
There may be too many accounting standards and too much expectation that financial reports be uniform. Flexibility is being lost. Another problem that accountants face is accounting during inflationary times. The Accounting Standards Committee has not been able to come up with a standard covering this due to various reasons including politics and communication problems. An additional area of difficulty is whether commercial substance should take precedence over legal form in particular transactions. Various approaches and problems are analyzed. Communication is an essential function of accounting and auditors should take more care in this area then hithertofore. Other observations are concerned with the accountant's image, and with government control over the profession - which should not be resisted, but seen an an opportunity for challenge.
Author: McMonnies, Peter
Financial statements, Corporation reports, Company reports
Auditor independence in Europe
The European Economic Community's Eighth Company Law Directive, passed in 1984, stipulates (among other things) that auditors performing statutory audits must be professional auditors who are independent of their audit clients. Problems of complying with this independence standard for auditors are discussed; in general, the problems are concerned with: the definition of 'incompatible activities', parallel client work, financial and other relationships with client, and trusteeships.
Europe, Auditing, European Economic Community
Canada accounts for pension costs
Canada has followed the United States and generated a new standard for pensions accounting, Pension Costs and Obligations. The accounting standard makes a clear distinction between defined benefits plans and defined contribution plans. The Canadian plan has the advantage of being much like the American one. Only time will tell how well the standard will work.
Author: Drummond, Christina
Canada, Innovations, Pensions
Subjects list: Standards, Accounting, Economic policy
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