Accounting Standards in Canada Enhancing Relevance

In its just-released strategic plan for 2022-2027, Canada’s Accounting Standards Board (AcSB) sets out the broad strategic objectives that will guide it in achieving its public interest mandate over a multi-year period.

In her preface to the plan, AcSB Chair Linda Mezon notes that “we have seen a tremendous change in the reporting needs of Canadian entities. Investors and stakeholders demand more

transparency and decision-useful information, beyond what is currently available in the traditional financial statements. COVID-19 also taught us how quickly things can change. It presented some novel and unpredictable risks and opportunities for reporting entities. Like the rest of the world, we had to deal these changes and impacts.”

Looking ahead to the next five years, she says, “I am reaffirming the AcSB’s vision of enhancing the relevance of financial information and supporting the improvement of non-financial information reported to stakeholders. With so much changing around us, we are focused on identifying how best to support Canadian stakeholders’ needs – inside and outside traditional financial statements.”

The new Strategic Plan for 2022-2027 identifies strategies to do just that across all stakeholder groups – helping financial statement users make well-informed, economic decisions and allowing financial statement preparers to explain their results in a cost-effective way. This, Mezon says, “includes continuing with our core mandate of serving the public interest through the development of accounting standards and other reporting guidance.”

She adds that “we continue to think that one size does not fit all to meet the reporting needs of Canadian entities. We will continue to establish accounting standards that are appropriate for each category of reporting entity, and this plan includes strategies to enhance the relevance of those standards to better meet the diverse needs of Canadian reporting entities.”

In 2021, the Independent Review Committee on Standard Setting (IRCSS) in Canada began reviewing the governance and structure for establishing Canadian accounting, auditing, and assurance standards, as well as what might be needed for the future. This includes considering whether a separate Canadian sustainability standards board is needed.

“Environmental, social, and governance (ESG) reporting is at an important juncture in Canada and around the world, Mezon writes. “With the establishment of the International Sustainability Standards Board (ISSB), there continue to be strides taken toward the development of a global set of sustainability standards. We are seeing developments in Canada as well, with the ISSB’s Montreal office location, and sustainability reporting guidance like the Canadian Securities Administration’s proposal on climate-related matters. We recognize that the environment in which we operate is evolving rapidly, and we will continue to monitor and revise our strategic priorities as needed. We are also keeping a close eye on the IRCSS’

final recommendations and stand ready to continue our collaborative approach to standard setting in the public interest.”

Globally, Canada has developed a reputation as a strong standard setter, and this will continue to be important to ensure that Canada has a seat at the table when issues that matter to Canadians are discussed. “I am confident in the direction of this plan and look forward to continuing to work with stakeholders during my remaining tenure as Chair to deliver high-quality and relevant standards that serve the public interest.”

For all the details on the new plan, its objectives and how it will meet them, see Strategic Plan (