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 In the next few weeks chartered accountants will have an opportunity to approve the new independence standard released by the CICA's Public Interest and Integrity Committee. The new standard, which reflects updated international and US rules and provides a framework auditors must use in every assurance engagement, is one of the key planks in restoring investor confidence, says CICA President and CEO David Smith.
"When James Court founded this profession in 1879, he said CAs could only earn the public's confidence if they upheld the highest standards of leadership, ethics and objectivity. In 2003, nothing has changed," says Smith. "I urge CAs to approve this independence standard, which is as good as any standard that exists in the world today, to give a clear signal about their commitment to restoring public confidence in capital markets."
The standard, which provides a more rigorous "principles-based" approach, outlines the threats to auditor independence as well as safeguards to protect independence. It also prohibits certain non-assurance services for which there cannot be adequate safeguards. "The principles-based framework goes a lot farther than the old requirements," says Smith, explaining it can be applied to new and developing situations. "If you just have rules, you can't cover every occasion that could arise."
First released as a draft standard for public comment in September 2002, it received substantial feedback with approximately 180 responses from stakeholder groups, the vast majority of whom now express satisfaction with the standard.
The member vote on the standard is currently taking place in each province except Quebec, where the approval for implementation must follow a government process.
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