Public Practice News & Views Knowledge Base

• challenges you have in applying the CASs in audits of SMEs;
• how CASs could better address SME audits; and
• how the AASB can better involve practitioners like you in the standard-setting process.

There’s no cost to attend, so register now as space is limited.

We encourage all BC practitioners who conduct audits of small and medium-sized entities to attend. To prepare for the event, you will be provided with a discussion paper upon registration. Please read it in advance of the session. 

For additional details or to send questions to AASB staff, please email info@aasbcanada.ca.

Help BC businesses affected by wildfires
Small Business BC (SBBC) is seeking CPAs licensed in public practice to respond to calls from BC small business owners who have been affected by the wildfires with questions on accounting and business continuity issues. SBBC will handle signups and bookings which will minimize administration by the CPA. Calls will be scheduled from late September to early October. An honorarium will be paid for these volunteer services.

To participate in this program, please email your contact information to David Chiang, CPA, CA, CPABC’s vice-president of member services, at [dchiang#bccpa,ca]dchiang@bccpa.ca. Your contact information will be shared with SBBC.

Recent updates from CPA Canada

Dated August 30, 2017
CPA Canada is preparing its response to Finance Canada’s consultation paper on proposed changes to tax planning using private corporations. The submission will assess the proposals from the perspective of the public interest. It will also be informed by the input we have received from CPAs who have raised concerns about the effects of the changes.

While the final text and recommendations are still subject to ongoing analysis and consultation, CPA Canada’s submission will stress the principles of simplicity, efficiency, and fairness in the tax system and focus on how the changes may affect the public interest goals of sustainable economic growth and competitiveness.

CPAs who wish to communicate their views directly to their federally elected representatives may find the following key points – which will be reflected in CPA Canada’s submission -- useful in supplementing their own views.

A. Sustainable economic growth and competitiveness

• To support sustainable economic growth in the public interest, Canada’s tax system should reinforce our competitive position in the global economy and provide the proper incentives for business owners to take risks and invest in our economy.

• The current proposals are significant tax policy changes which, if implemented, could act as a barrier to business investment and job creation by further raising the cost of doing business in Canada, threatening our competitive position in the long run.
   

B. Fairness

• Fairness in the tax system is an essential principle that may not be improved as a result of the proposed changes, which will reach across taxpayers at all income levels.
• These corporate structures and rules have been available for as long as 40 years in some cases, and are used by private corporations and businesses of all sizes. If the government is going to change tax policy, it should allow for a reasonable transition period and appropriate grandfathering.
• A wide variety of business owners choose to structure their business through an incorporated entity for a number of reasons, including limitation of liability and tax incentives, in order to ensure their competitiveness and sustainability.
• Family-owned businesses, middle-class Canadians and entrepreneurs striving to build Canada’s economy will be among those affected by these changes.
   

• Adding further complexity to an already complex tax system in Canada, as these proposals may do, will work against tax simplification and its associated benefits for government, taxpayers and business.
• A simpler and more efficient tax system would assist taxpayers with compliance, improve fairness and increase tax revenue collections that are necessary to support economic and social challenges.
   

D. Efficiency

• Making ad hoc changes to long-standing legitimate tax structures that are utilized by a wide array of businesses of all sizes and income levels, may not be an effective way to improve Canada’s tax system and it could lead to unintended outcomes and require further fixes.
• These proposed tax changes will likely increase the tax and administrative costs of running a business, which could adversely impact the entrepreneurial drive.
   

In CPA Canada’s view, Canada’s tax system needs a comprehensive review to improve its simplicity, efficiency, fairness and competitiveness. By adding complexity and inefficiencies, these proposals may work against that goal. Further, they could undermine the government’s focus on building an entrepreneurial, knowledge-based, and innovation-driven economy.

In the public interest, CPA Canada has undertaken two recent actions. First, CPA Canada has brought views and concerns forward to the attention of the Finance Minister’s Office. Second, as previously mentioned, CPA Canada has called on the government to extend the consultation period to ensure that all of the concerns raised can be thoroughly researched and analyzed, and the potential impacts on Canadian businesses and individuals can be properly identified and estimated.

Dated August 22, 2017
The July 2017 paper  from Finance Canada and accompanying draft legislation set out proposals that would eliminate some commonly used tax planning strategies available to owners of private corporations.

These changes could have significant impacts on private companies of all sizes, their owners and families, and Canada’s economy overall. Given the scope of these changes, CPA Canada believes it’s crucial to the public interest for the government to examine all the implications and alternatives before enacting these proposals into law. Actions that CPA Canada is undertaking include:

• requesting the government extend the 75-day consultation period beyond October 2, 2017, to allow adequate time for research, analysis, and understanding of the proposals’ wide-ranging impacts;
• hosting meetings with tax practitioners, legal practitioners, and other stakeholders to evaluate the proposals, identify potential concerns, and develop solutions;
• inviting CPA members to provide their comments to help inform our submission;
• taking an active role in consultation events hosted by other national organizations, including the Society of Trust and Estate Practitioners and the Canadian Tax Foundation; and
• supporting the Joint Committee on Taxation of the Canadian Bar Association and CPA Canada in the development of its submission to the consultation.
   

These and other activities are helping CPA Canada to develop its response to Finance Canada’s consultation. In a detailed submission to the government, CPA Canada will assert the principles that any changes to tax policy in this area should be designed to ensure tax fairness for all taxpayers while avoiding undue complexity, and also to promote and support entrepreneurialism and competitiveness in Canada.

Further, tax policy changes of this magnitude should be developed with extensive consultation and collaboration with the tax community, Canadian businesses, and other key stakeholders. Ideally, CPA Canada believes that instead of adding more complexity to the tax system with these changes, the government should consider them within a comprehensive, top-to-bottom review of Canada’s tax legislation.

In June 2017, the Accounting Standards Board (AcSB) provided an information session and three roundtable member consultations in Vancouver. The resources used during these sessions are being provided here for the benefit of all members. Note that these documents contain links to more detailed information such as the Financial Reporting & Assurance Standards Canada website.

What’s New in Accounting Standards
This information session included standard setting in Canada, an update on the AcSB’s activities, new accounting standards, and various projects being undertaken by the AcSB

IFRS Implementation Matters
This roundtable consultation involved the IFRS accounting framework and covered issues that financial statement preparers face during IFRS transition, their experience with recent IFRS pronouncements, and their views on the cost and benefit of standards.  

Related Party Financial Instruments
This roundtable consultation on related party financial instruments covered how to account for and measure related party financial instruments after initial recognition.

Disclosure Problem & How to Address
The final roundtable discussed how to improve communication in financial reporting through the use of performance measures, including “non-GAAP” measures, and where best to provide this information to users.  

Expanded Registered Firm Directory Coming This Fall
A directory of registered CPA firms is already on the CPABC website (except for firms who have asked not to be included). This existing directory is at the top navigation on the CPABC home page and. A search can be performed by entering all or part of either the firm name or the city.

The public practice department will launch an expanded version of the firm directory this fall. Enhancements include a listing of all partners at the firm and the category in which each is licensed to practice. The new directory will also allow for a search by all or part of a partner’s name. The additional information and search functionality should assist members of the public in locating a firm convenient and suitable for their service needs.

If a firm wishes to be excluded from the directory or a currently excluded firm wishes to be added, please email [publicpractice#bccpa,ca]publicpractice@bccpa.ca