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L08Standards - Accounting Standards A Introduction The...

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Accounting Standards A.Introduction The practice of accounting is regulated in practically all industrialized economies. In Canada, the CICA’s Accounting Standards Board (AcSB) provides the accounting rules (GAAP). The Auditing and Assurance Standards Board (AASB) provides the generally accepted auditing standards (GAAS) for verifying that financial statements comply with GAAP. Canada is in transition to international standards for GAAS (by December 14, 2010) and GAAP (for publicly accounting enterprises, by January 1, 2011). International Auditing Standards (IAS) are issued by International Auditing and Assurance Standards Board (IAASB) in New York, while International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB) in London. While the standards will be set by the international bodies, the Canadian standards boards will retain authority over GAAP and GAAS. In other words, the AcSB and AASB will evaluate new standards issued by the international bodies to determine if they are suitable for application in Canada, and in some circumstance provide additional guidance or clarification. In addition, the AcSB will continue to issue standard for non-publicly accounting enterprises. December 14 2010 January 1 2011 Cdn GAAS Cdn GAAP Publicly accountable enterprises Cdn GAAP Private enterprises Cdn GAAP Not-for-profit organizations Cdn GAAP Public sector All enterprises choosing or required to have an assurance report ? ? ? Cdn GAAP = IFRS Cdn GAAS = IAS Type of reporting entity In this chapter, we review what GAAP and GAAS mean at a broad level, and consider why we need regulated standards in accounting. 10-1
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B. GAAP and GAAS Below is an example of a standard auditors’ report. Auditors’ report To the Shareholders of . .............................. We have audited the balance sheet of . ......... as at . ......... , 20. .... and the statements of income, retained earnings and cash flows for the year then ended. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on my audit. We conducted my audit in accordance with Canadian generally accepted auditing standards.
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L08Standards - Accounting Standards A Introduction The...

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