The Canadian Securities Administrators (CSA) regularly perform reviews of the quality of interim and annual information filed with the provincial securities regulators. Part of this review includes the quality of financial statements presentation and disclosure. In their July 2014 review, the CSA highlighted that there were many deficiencies related to financial statement note disclosure. Access the CSA Staff Notice 51-341 at www.osc.gov.on.ca/documents/en/Securities- Category5/ csa_20140717_51-341_cdr activities-fiscal-end.pdf .
REQUIRED
1. Refer to Appendix A of the Staff Notice and read the example on impairment of assets, and explain what presentation and disclosure assertions were violated.
2. How do you think the audit evidence for presentation and disclosure audit objectives is similar to the transaction-related and balance-related audit objectives? How do you think it differs?
3. Regulators such as the CSA are putting greater emphasis on presentation and disclosure and the international accounting standard setter, IASB, and its American counterpart, FASB, are working on a joint Financial Statement Presentation Project which plans to address fundamental issues related to presentation and display of financial information. Why do you think regulators and standard setters are so concerned about the presentation and disclosure assertions?