CSA Views On The Current State Of Canada's Financial Reporting

 
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"I feel like a fugitive from the law of averages." – William H. Mauldin

In June, the Canadian Securities Administrators issued their annual report on the results of their continuous disclosure review program for their year ended March 31, 2012. Not only does it provide the CSA's views on Canada's crossover to IFRS last year, it also assesses the quality of the country's ongoing IFRS accounting, Mangement Discussion and Analysis and other reporting such as executive compensation details. The report thus isn't merely a memorial to a transition exercise that no one cares about anymore, but rather one that is actually relevant to your future reporting. Here are the principal findings:

Canada's transition to IFRS. "Generally positive" (though about five percent of issuers were required to restate financial statements). Financial statement presentation. Debt too often is being shown as longterm when it's current, at least under IFRS. Accounting policies. Too much boilerplate and vague disclosure. Also, a failure to disclose all policies that are relevant to understanding the financial statements (e.g., companies that issue flow through shares not disclosing their accounting for these arrangements). Business combinations. Frequent failure to make all IFRS-required disclosures. MDA. Often insufficient and less than incisive analysis (e.g...

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