SEC: 20th Anniversary of Regulation FD

 

On August 15, 2000, the United States Securities and Exchange Commission (SEC) adopted Regulation Fair Disclosure, often referred to as Regulation FD. The rulemaking was controversial, and the vote of the Commissioners to approve Regulation FD was 3 to 1 in favor. The SEC’s Chairman at the time, Arthur Levitt, believed that Regulation FD was necessary to “level the playing field” for investors, by prohibiting the selective disclosure of material non-public information to market professionals. On the other side of the debate, some feared that Regulation FD would have a chilling effect on the communications between public companies and the market, while others worried that Regulation FD would lead to information overload, where public companies would be obligated to frequently disclose too many material developments.

Over the past twenty years, Regulation FD has significantly shaped the framework for public company communications. The SEC has enforced Regulation FD judiciously, seeking action in the most egregious cases to send a clear message to public companies about the conduct that is expected in accordance with the rules. Regulation FD has also adapted with the changing times, as the Commission has provided guidance on the dissemination of material nonpublic information through websites and social media channels. Today, Regulation FD stands as a key component of the regulation of corporate disclosure.

The SEC Historical Society has prepared an extensive review on the 20th Anniversary of Regulation Fair Disclosure. The review includes an audio program that provides A Historical Perspective on the Development, Implementation and Enforcement of Regulation FD on its twentieth anniversary.

Understanding Reports on Financial Statements

Over the years, the CICA has published guidance to help readers understand the various reports that may accompany financial statements. The 2010 version of the Guide states that: "Chartered Accountants are valued for their integrity and proven financial expertise. The CA’s signature on an audit report means that the CA has conducted an examination of the organization’s financial statements, has expressed an informed opinion on the fairness of the financial information, and can provide reasonable assurance on the presentation of the organization’s financial position, performance and cash flows."

It is important to note, however, that not all financial statements are audited. Many small organizations do not require an audit. Their reporting needs can be met in other ways — through reviews or compilations. Whether the CA is required to perform an audit, a review or a compilation those who read financial statements and the accompanying communication can be confident that the engagement was conducted with the utmost integrity and professionalism.  

Chartered Accountants provide three levels of service with respect to communications on financial statements — an audit, a review or a compilation. These services are conducted in accordance with relevant ethical requirements that are set out in Rules of Professional Conduct/Codes of Ethics applicable to the practice of public accounting issued by the various accounting bodies. These Rules/Codes apply to the services provided by public accountants and generally cover the fundamental principles of professional ethics.

To learn more, download the 16-page Guide titled Understanding Reports on Financial Statements.

Rogers’ Chocolates since 1885

 

Rogers' Chocolates celebrated its 125th Anniversary on October 25th, 2010. The company is steeped in tradition and a rich history that has earned them a reputation as one of Canada's premiere chocolate makers. The first Rogers' chocolates were made in 1885 by Charles "Candy" Rogers in the back of his grocery store in Victoria, British Columbia. He quickly became a popular man.

In 1891, Rogers expanded his chocolate operation to the company's current heritage storefront on Government Street in Victoria and the rest, as they say, is history. Today, there are 8 retail stores, several hundred wholesale outlets that ship to over 50 countries, and a 20,000 square-foot factory.  For more information, visit the History webpage. Also, see the timeline on A Brief History of Chocolate from 250BC to 2010, and view the Rogers Videos on YouTube.

 

A short history of female Chartered Accountants (CAs) in Canada

As the above chart shows, women in Canada have come a long, long way since their beginnings in the CA profession. To gain a true perspective on how far women have come in the profession, it’s enlightening to look back — way back — to 1922, when Mercy Ellen Crehan and Florence Eulalie Herkins became the first women to be admitted to membership. It seems the welcome was not exactly glorious: in the June 1966 issue of CAmagazine (then called The Canadian Chartered Accountant), FCA and former federal MP Ellen Fairclough wrote that one of the women “found it necessary to ‘defect’ to the United States to earn a living in her chosen profession.”

Over the next decades, the number of women in the profession grew ever so slowly. As Steve Brearton wrote in “A century of CAmagazine” (June/July 2011), “Even the opportunities afforded women during the Second World War to demonstrate their obvious competence barely opened doors.” By 1966, there were still only 125 women members — a situation that Fairclough bemoaned. “[The number] leaves much to be desired, particularly when there is such a demand, even an urgent need, to fill the vacancies which appear to be increasing in number in the profession. The question arises whether the profession is to be deprived of the services of qualified people because of age-old prejudices and inhibitions.”

By the mid-1970s, things were slowly starting to move. In 1976, Pamela Jermey became the first woman to garner top marks on the Uniform Final Examination (UFE). And in 1979, women took all three top spots on the UFE honour role. In a January 1980 CAmagazine editorial, Nelson Luscombe wrote, “There’s every indication that [women’s] presence will continue to increase, both in numbers and significance.” He cited an article in the same issue predicting that females would begin to be appointed to partnership in the early 1980s and that by the end of the first decade of the next century, the proportion “should reach 30%.” That last prediction did not come true. Is it time to make another?

 Find out more by reading the articles in the December 2012 Special Issue of CAmagazine online, in particular, the article “Women at Work” by Rosalind Stefanac.

Project Gutenberg Literary Archive Foundation

 

The Project Gutenberg Literary Archive Foundation is a non-profit organization (since 2000) that maintains an electronic library of public domain materials that have been digitized (converted into electronic books or e-books) by volunteers. These materials are archived for download from the organization’s website (www.gutenberg.org).

The project got its start on July 4, 1971, when Michael Hart, a student at the University of Illinois, began typing the US Declaration of Independence into the school’s computer system for distribution free of charge. He soon followed with the works of William Shakespeare and the Bible. Thus began Project Gutenberg, the oldest digital library.

Over the next 20 years, Hart transcribed about 100 books before the spread of the Internet allowed for a vast international expansion in interest. The project grew to include hundreds and then thousands of volunteers around the world, and Hart took on more administrative duties, including fund-raising to maintain a website. The number of public works scanned (beginning in the 1990s) or transcribed steadily grew to 1,000 (1997), 10,000 (2003), 20,000 (2006) and 40,000 (2011).

In 2000, Charles Franks founded Distributed Proofreaders, a web-based program for parsing the difficult task of proofreading scanned texts for Project Gutenberg. In 2002 Distributed Proofreaders became part of Project Gutenberg. The ability to distribute the proofreading task among volunteer teams was reported in 2002 by Slashdot, a popular technology website. As word spread, hundreds of teams formed to scan and proofread new works. By 2009, roughly half of all Project Gutenberg books had been handled by using Distributed Proofreaders.

The vast majority of materials in the Project Gutenberg library are in English, although the addition of materials in other languages was started in 1997. In 2004, Project Gutenberg Europe and Distributed Proofreaders Europe were formed to facilitate the process of adding more non-English works. Project Gutenberg now includes works in more than 50 languages.

It is noteworthy that the copyright on any book published before 1923 expired no more than 75 years later, at which point it entered the public domain. Any work published between 1923 and 1977 retains its copyright for 95 years. The copyright on any work published in later years expires 70 years after the author’s death or 95 years after publication in the case of a corporate work.

Report on Specialization in the Canadian Chartered Accountancy Profession – December 1981

The 148-page Report of the Committee to Study Specialization in the Canadian Chartered Accountancy Profession was issued in December 1981. The Chairman’s Letter by W.D. Grace, FCA, states that: “The issue of specialization within the profession is not easily resolved. The Committee believes that the recommendations for a voluntary structured plan of specialization would prove to be of significant long term benefit to the Canadian public and to all members of the chartered accountancy profession. The Committee has addressed the issue of specialization through a lengthy process of research, discussion, and debate and by consideration of the present de facto situation and the specialty experiences of other accounting bodies and other professions.” The Committee recommended that four specific areas of practice be initially recognized as specialties: taxation, insolvency, business valuation and computer audit.

According to the booklet called Another Great Leap - CA•Designated Specialists, Chartered Accountants in Canada now have access to six profession-endorsed specialist designations, some offered directly by the Canadian Institute of Chartered Accountants (CICA) and others through organizations that have been accredited by the CICA. Currently, more than 1,000 have earned the advantage of a CA specialist designation. Regardless of the route to the specialist designation, candidates for specialist certification need to demonstrate experience in the field, in addition to completing an evaluation process. As well, specialists must comply with continuing experience and professional development standards to maintain the designation.

For more information, read the CAmagazine article, “Breaking new ground” (published in December 1997, page 2). This article discusses the first specialist designation for investigative and forensic accounting. Also, refer to the CICA website section on CA Specialization and the Institute of Chartered Accountants of Alberta (ICAA) website section on Specialty Designations.

PSAAC - What It Is & What It Does

“PSAAC” stands for the Public Sector Accounting and Auditing Committee of the Canadian Institute of Chartered Accountants (CICA). PSAAC was established in 1981, to improve and harmonize public sector accounting and auditing practices. Its creation followed extensive consultation with federal and provincial governments and legislative auditors, and an in-depth CICA study of their financial reporting.

 

That study, Financial Reporting by Governments (1980), found wide disparities in government reporting practices. Government financial statements often reported fragmented and incomplete information, leaving out major operating units and liabilities. So, the financial statement information was inadequate for both decision-making and accountability. In addition, similar transactions were being reported very differently from government to government. As a result, useful comparisons of one government’s financial statements with those of another were almost impossible. The study called for accounting standards tailored to reflect the nature of government objectives and operations, and to meet information needs of the users of government financial statements and reports.

 

In 1991, a tenth anniversary pamphlet was issued on PSAAC - What It Is & What It Does. The pamphlet explains: what it is; why it was formed; how it works; what it’s done; where it’s going; and progress to date. According to the pamphlet: “PSAAC’s role is: To serve the public interest by strengthening accountability in the public sector through developing, recommending and gaining acceptance of accounting and auditing standards of good practice. The Committee issues its recommendations in Public Sector Accounting and Auditing Statements and Guidelines. It also initiates research studies to serve as input to the standard-setting process and to stimulate thought and debate on contentious or complex issues.” An Appendix to the pamphlet lists seven accounting statements, four auditing statements, two auditing guidelines and four research studies issued up to that point in time.

A Review of Bookkeeping and Accounting in 1945

A 1945 Vocational Guidance Film on Bookkeeping and Accounting is available for viewing online at the SEC Historical Society website. This entertaining 10-minute video was provided by courtesy of the Prelinger Archives, United States Library of Congress. It discusses a variety of matters including the household budget book, business bookkeeping, the role of the bookkeeper compared to that of the accountant, an accounting department, calculating and bookkeeping machines, cost accounting, special investigations, preparing tax returns and business principles. It also distinguishes a private accountant from a public accountant (such as a CPA) who should have a pleasing personality, a strong moral character and legible handwriting.

 

50 years ago in the October 1962 CAmagazine

The October 1962 edition of CAmagazine discussed the “Need for reform in the Bankruptcy Act.” It stated that: “Bankruptcies and their attendant losses have become a most pressing problem…. A tremendous volume of business is presently conducted in Canada by ‘thin’ corporations — where the shareholders have very little of their own money in the company. [One] might well remark that such a corporation should not be given credit…. Our present Bankruptcy Act … displays no recognition, whatsoever, of the need of a separate set of ‘ground rules’ in dealing with corporations.”

Also, read about the “60th Annual Conference” (from the summary of the CICA annual meeting in Fredericton, New Brunswick) and “The new management theories make for poor performance” (a summary of “Executives who can’t manage,” from The Atlantic Monthly, July 1962).

AICPA - Evolution of a Profession

The American Institute of Certified Public Accountants (AICPA) was formed in 1887 and is celebrating its 125th anniversary in 2012. As part of the celebration, this short video (about 6 minutes), called “Evolution of a Profession,” reviews the history of the accounting profession from its origins 8,000 years ago to present day.

The Accountant Who Changed the World

The birth of accounting rocked the world 500 years ago. In the 1400s, much of Europe was still using Roman numerals and finding it really hard to easily add or subtract. Arabic numerals (1, 2, 3, 4, etc.) started catching on and' with those numbers, merchants in Venice developed a revolutionary system we now call “double-entry” bookkeeping.

Every transaction gets entered twice in financial records. If one day, you sold three gold coins' worth of pepper, you would write that the amount of cash you had went up by three gold coins. You would also write in that the amount of pepper you had went down by three gold coins' worth. Before double-entry, people just kept diaries and counted their money at the end of the day. This innovation allowed merchants to see every aspect of their business in neat little rows.

Luca Pacioli was a monk, magician and lover of numbers. He discovered this bookkeeping in Venice. In 1494, he wrote a huge math encyclopedia and included an instructional section on double-entry bookkeeping. Thanks to the new printing press, his book was mass produced and became a hit. One of the first readers was Leonardo da Vinci, who at the time was painting The Last Supper. Pacioli’s encyclopedia covered the mathematics of perspective painting which fascinated da Vinci.

Read the article “The Accountant Who Changed the World” and listen to the full story (about 5 minutes) at NPR online.
 

Should Accounting Standards be Principles or Rules?

In a recently-published article, Sir David Tweedie notes that: “Forty-odd years ago, as a CA apprentice, I didn't have to study accounting standards because there weren’t any! There was one major standard – the true and fair view – augmented by accepted practice.” According to Tweedie, two disputed takeover bids soon changed that. The President of the Institute of Chartered Accountants in England and Wales (ICAEW), Sir Ronald Leach, senior partner of Peat Marwick & Co., and Professor Edward Stamp of Edinburgh University became embroiled in a public argument in the pages of The Times over the state of British financial reporting.

 

“Professor Stamp argued that for any major company, there would be a million ways which you could show a true and fair view, and that this was totally unacceptable. Sir Ronald reacted with alacrity, and together with the other Institutes (including a rather reluctant ICAS), agreed to form the Accounting Standards Steering Committee in 1969. Pressured by the Government, the Committee looked for a quick win and came upon a research paper of the ICAEW dealing with Associated Companies. This was rapidly turned into the Statement of Standard Accounting Practice 1. While to accountants such a topic would be a bizarre choice for the first standard, rather than what became SSAP2 – Accounting Policies – the profession needed to show it.”

 

“The argument continues over whether standards in financial reporting can best be governed by clear and detailed rules, or by principles and judgement could act quickly in a time of crisis. Since then, we have seen the SSAPs gradually replaced with Financial Reporting Standards and latterly by International Financial Reporting Standards (IFRS). These standards have become more and more complex.”

 

“Accounting is not rocket science. Writing a standard to deal with 80 per cent of the problems takes only a few pages, yet if our profession requires every avenue to be explored, then it can run into hundreds. ICAS is just completing a judgement framework to assist professionals who are unsure what exactly judgement involves. If you have been trained in what I term ‘search-engine’ accounting – looking up the answer in a massive book of rules –judgement can be scary.”

 

“The profession is at a crossroads, and the more we head down the rules route the harder it will be to pull back to simpler, more clearly expressed principle-based standards.” Read the article “Should Accounting Standards be Principles or Rules?” by Sir David Tweedie, President of the Institute of Chartered Accountants of Scotland (ICAS), as well as previous postings regarding the Principles versus Rules debate.

The First Quarter Century of the GASB (1984–2009): A Perspective on Standard Setting

 

The Governmental Accounting Standards Board (GASB) was established in April 1984 as the authoritative accounting standard-setting body for state and local governmental entities in the United States. There are over 87,000 state and local entities in the country and for the most part these entities are required to comply with the generally accepted accounting principles established by the GASB. Therefore, the standards promulgated by the GASB are significant. On June 30, 2009, the GASB completed its 25th year of standard setting. Because of its influence and the importance of its mission, a better understanding of the GASB and its accomplishments during its first 25 years of existence may be helpful.

 

Two research papers (Part 1 and Part 2) provide a complete sequential treatment of the GASB’s operational history through the end of its first quarter century. The first paper begins with an historical perspective about municipal accounting issues from colonial times to 1934. The origin of professional self-determining standards is the feature of the second paper, identifying standard-setting bodies that contributed to municipal accounting from 1934 to 1984. The early activities of the GASB are then reviewed. Two appendices are provided to detail the composition of the Board during its first quarter century, along with biographical information about the early Board members and later Chair and Vice Chair personnel.

 

The first paper concludes with a review of the relationship of other governmental standard setting bodies at the federal level and the international level. The second paper provides an overview of the future challenges faced by the GASB and supplies a digest of the standards including appendix and a synoptic summary of the standards the Board has promulgated by topic and by standard number.

 

Gary J. Previts

For more information, read the article “The First Quarter Century of the GASB (1984–2009): A Perspective on Standard Setting” by Helen M. Roybark, Edward N. Coffman and Gary J. Previts.

 

Part 1 of this article was published in ABACUS (Volume 48, Issue 1, pages 1–30, March 2012) and Part 2 was published in ABACUS (Volume 48, Issue 2, pages 147–198, June 2012).

 

 

 

In addition, refer to the article “The GASB Marks 25 Years of Standards-Setting” published in June 2009 on the GASB website.

 

The future of corporate reporting: a review article (2000)

 

In a research article published in 2000, Professor Vivien Beattie noted that: “Significant changes in the corporate external reporting environment have led to proposals for fundamental changes in corporate reporting practices. Recent influential reports by major organisations have suggested that a variety of new information types be reported, in particular forward-looking, non-financial and soft information.”

This paper presents a review and synthesis of these reports and provides a framework for classifying and describing suggested information types. The academic antecedents for certain current proposals are identified and the ambiguous relationship between research and practice is explored. The implications for future academic research are discussed and a research agenda is introduced.

For additional insight, read the article “The future of corporate reporting: a review article” by Vivien Beattie published in the Irish Accounting Review 2000, 7(1), pages 1-36. As well, refer to the 1991 landmark research study called Information to be included in the Annual Report to Shareholders published by the Canadian Institute of Chartered Accountants (CICA). This 317-page study was drafted by J. Paul-Emile Roy, CA under the direction of a seven-member Study Group chaired by Gerald Trites, FCA.

Paul Pacter: Profile and Interview

 

Accountancy Age online published an April 2010 article called “Profile: Paul Pacter, international standard setter.” The article states that, although some people may not recognise his name, Paul Pacter is one of the most influential men in the history of international accounting standards."  Since 2000, he has played a variety of roles including director of standards for small and medium-sized entities at the International Accounting Standards Board and director at the global IFRS office for Deloitte in Hong Kong. During the 1990s, he served as staff member at the International Accounting Standards Committee working on projects including financial instruments, interim financial reporting, segment reporting, discontinuing operations, extractive industries, agriculture, and electronic financial reporting. From 1984-1989, he was vice chairman of the advisory council to the US Governmental Accounting Standards Board.

 

On July 12, 2011, an Interview with Paul Pacter was conducted in New York City by James Stocker for the Securities and Exchange Commission Historical Society’s virtual museum and archive on the history of financial regulation. A 53-page transcript of that interview notes that, during the 2000s, he also set up a very popular website (www.iasplus.com) for accountants involved in international accounting standards. Pacter comments that: “This was done for Deloitte. We just had an idea that there ought to be someplace out on the Internet where all sorts of information about international accounting standards was available. The old IASC didn’t have much of a website, although I did that too, I taught myself the HTML and the graphics and how to do FTP. Deloitte said, “Why don’t you set something up for IASs?” We opened shop as a free site. We opened the door in December 2000. Visitor numbers grew dramatically. When I left Deloitte in June 2010, we were getting 60,000 to 70,000 visitors a week – unique visitors. We had about 1,000 webpages. We had 4,000 downloadable PDF files. It was, and still is, the biggest website in a very narrow area of interest, international accounting standards.”

 

Looking back at a long career, Pacter comments: “...I must just say out of respect for the U.S. SEC, they’ve been a great contributor to accounting standards. They have stayed out of the development of the standards. They’ve encouraged and prodded and commented. They’ve insisted on high quality implementation. For that, I say I have the greatest respect for the commission and for their counterparts around the world. We don’t want politics setting accounting standards. We don’t want politicians setting accounting standards any more than I want them telling my surgeon how to do my surgery. Set the broad principles and let the private sector do the job. The commission has done that, and I thank them for that.”

The Auditor’s Standard Report (1975)

In November 1975, the Auditing Standards Committee of the Canadian Institute of Chartered Accountants issued an exposure draft dealing with The Auditor’s Standard Report. This Exposure Draft was the first stage of a complete updating and revision of the CICA Handbook Section 5500 - The Auditors’ Report.

According to the exposure draft, “The auditor's report is a comprehensive subject and the Committee believes that it would be useful and more efficient to divide present Section 5500 into several separate sections within the Handbook under such section headings as the following: Section 5400 The Auditor’s Standard Report; Section 5500 The Auditor’s Reporting Reservations; Section 5600 Special Reports; and Section 5700 Other Reporting Matters.”

The exposure draft stated that: “The auditor’s standard report is normally presented in two paragraphs. The first ("scope") paragraph identifies the financial statements reported on and contains a reference to the scope and nature of the auditor’s examination. The second ("opinion") paragraph expresses the auditor’s opinion resulting from that examination.” The major changes proposed in the exposure draft were (a) revision of the scope paragraph to state that the auditor’s examination was made in accordance with generally accepted auditing standards; and (b) removal of the two-part opinion concept.

Achieving International Harmonization of Accounting Standards (1975)

In July 1975, the Accounting Research Committee of the Canadian Institute of Chartered Accountants (CICA) issued an exposure draft on International Accounting Standards for inclusion in the CICA Handbook. The exposure draft notes that the CICA is a member of the International Accounting Standards Committee (IASC) whose objectives are “to formulate and publish in the public interest, basic standards to be observed in the presentation of audited accounts and financial statements,and to promote their worldwide acceptance and observance.”

The exposure draft sets out the procedures that the Accounting Research Committee will follow when an International Accounting Standard is issued. In addition, it notes that: “For companies that report in an international environment, it is desirable to disclose that accounting principles generally accepted in Canada have been followed in preparing the financial statements. It is also desirable to disclose conformity with or identify deviations from International Accounting Standards (but not necessarily the effect on the financial statements). Appropriate disclosure would be in the Summary of Accounting Policies.”

Principles-based standards and professional judgment - then and now

At a historic roundtable discussion in New York, the chairman (Charles B. Couchman) stated that: “For many years the leading practitioners of public accountancy have been reducing the practice of accountancy to rules and standards as far as it has been found practical and logical to do so. The elements that make up financial statements have been reduced to standard classifications to the extent permitted by complicated and constantly changing transactions of the business world. Rules have been adopted covering, to a large extent, the various entries affecting the financial classifications. These classifications and these rules have been made widely available through books, articles, addresses and accounting curricula. Practically all the progress that has been made in reducing accountancy to rules and standards has been accomplished by the public accounting profession.”

“If all of the transactions of business were susceptible to analysis into a definite and rigid number of effects that could be analyzed to an extent that would allow exact classification, then rules could be adopted that would cover correctly each one. However, that is not the case. No matter how long one is engaged in an extensive practice of accountancy, he is continually faced  by new and unexpected transactions, each legitimate but each presenting combinations of effects not previously encountered. That is why the sorting of accounting transactions is rigid classifications to which rules and standards may be applied without distortion of fact is a slow process and cannot be otherwise.”

“No fixed rule may be laid down until all of the accounting elements that may fall within its scope have been studied and their effects determined so completely as to bring exact knowledge that the rule, when applied to them, will result in a proper statement of financial facts. Even then the rule must be subject to possible exception, as there is always the possibility that a new and unexpected set of circumstances may arise to which the rigid application of this rule would result in distortion of truth.”

“It is true, not only of accountancy, but of almost every other complicated subject, that the one who has only a smattering of knowledge of it considers that the subject is reasonably simple and that he can readily devise rules governing each phase thereof. To the simple, all things are simple. It is only when one goes deeply into the subject, whatever it may be, that he becomes aware of the complications and the difficulties of proper treatment that is applicable to each element.”

To learn more about the history of the principles versus rules debate, read the transcript of an October 19, 1937 roundtable at the Waldorf-Astoria, New York titled “To What Extent Can the Practice of Accounting Be Reduced to Rules and Standards?” For more information and different perspectives regarding this ongoing debate, refer to previous postings during the past year.

Generally Accepted Auditing Standards: Audit Evidence – 1977

In February 1975, the CICA’s Auditing Standards Committee (AuSC) proposed, subject to comments received following exposure, to publish the contents of an Exposure Draft as CICA Handbook: Section 5100 - Generally Accepted Auditing Standards. In July 1976, the AuSC issued a 32-page Exposure Draft on “Internal Control” (for inter-related Sections 5200 to 5230).

Then, in May 1977, the AuSC issued a 12-page Exposure Draft on “Audit Evidence” (for Sections 5300). This material was intended to provide guidance, in general terms, as to the attributes of audit evidence and the manner in which the auditor obtains and evaluates such evidence to adhere to field work standard (iii) within generally accepted auditing standards. Field work standard (iii) states: “"Sufficient appropriate audit evidence should be obtained, by such means as inspection, observation, enquiry, confirmation, computation and analysis, to afford a reasonable basis to support the content of the report.”

The Exposure Draft emphasized that “The auditor is concerned with audit evidence in all phases of his audit engagement, from the planning stage, through the study and evaluation of internal control including the performance of compliance auditing procedures, to the performance of substantive auditing procedures.” It addressed the following matters: Introduction and Definition; Knowledge of the Business; Necessity for Performing Substantive Auditing Procedures; Sufficiency and Appropriateness of Evidence; Methods of Obtaining Evidence; Timing of Auditing Procedures; Errors and Irregularities; and Evaluation of Audit Evidence. In this regard, “The auditor relies on his professional judgment [emphasis added] in deciding which procedures will give him sufficient appropriate audit evidence. He evaluates the audit evidence gathered to determine the content of his report.”

Canada Day 2012 – a country celebrates 145 years of confederation

Canada Day is often called “Canada’s Birthday,” ever since Canada was united into a single country on July 1, 1867, 145 years ago. Each year, Canadians celebrate that event on Canada Day, July 1. From coast to coast to coast, communities will put their unique stamps on the day.

On Parliament Hill in Ottawa, the Peace Tower carillon will ring in British-legacy military pageantry, including a 200th anniversary look-back to the War of 1812 and a concert. Elsewhere, people will celebrate with citizenship ceremonies, maple beer swigging, a yoga fest, block parties, some cheering for our Olympians, kicking back at the cottage, horse shows, “O Canada” singing contests, a Montreal “mega-cake,” salmon barbecues, Inuit games, bannock-making, a Bollywood fashion show, line-dancing, and all manner of revelry.

View a video from the Prime Minister, Stephen Harper, and statements from Thomas Mulcair and Bob Rae. See the Toronto Star article, “On Canada Day 2012, show the flag for all of us.” Also, refer to “Google celebrates Canada Day with home-page doodle.”