Advancing Canada's Competitive Advantage – A national forum on management

Workshop with simultaneous translation

Wednesday September 30th

Accounting, a Question of Governance: The Role of Audit Committees and Interfacing Between Governance and Financial Fraud (10:30 am to 12 pm)

Speakers:

• Joseph Carcello, Ernst & Young Professor, Department of Accounting and Information Management, College of Business Administration, University of Tennessee; Director of Research, Corporate Governance Center
• Jean Bédard, Professor, School of Accounting, Faculty of Business Administration (FSA), Université Laval

Moderator:

• Michel Magnan, Professor (Lawrence Bloomberg Endowed Chair in Accountancy), Department of Accountancy, John Molson School of Business, Concordia University

Abstract

Corporate governance is now widely believed to be a critical factor in the success or failure of organizations. What is less widely known is that accounting plays a major role in ensuring that the governance process functions efficiently and effectively. In the context of this session, Professors Carcello and Bédard will provide participants with leading-edge findings with respect to the interface between the accounting and audit functions and corporate governance. Professor Carcello will focus on the U.S. experience with respect to fraudulent financial reporting and corporate governance. More specifically, he will discuss a forthcoming study by COSO (Committee of Sponsoring Organizations, a leading source of fraud detection guidance) on fraudulent financial reporting in the U.S. between 1998 and 2007 with a focus on how the governance characteristics of fraud firms differ from those of non-fraud firms. Professor Bédard will discuss the ability of audit committees to achieve regulators’ objectives of improving the quality of financial information and to maintain/strengthen investor confidence in the quality of financial reporting and financial markets. Relying on a meta-analysis of audit committee research and his recent work, he will provide a critical assessment of audit committees’ effectiveness. Both presentations are extremely timely considering that accounting scandals never seem to go out of style.

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Financial Reporting Standards and the Public Interest (1:30 to 3 pm)

Speakers:

• Patricia C. O’Brien, Ernst & Young Professor of Accounting, School of Accounting and Finance, University of Waterloo [slideshow]
• Paul Cherry, FCA; Chairman of the Standards Advisory Council (SAC) for the International Accounting Standards Board (IASB) [slideshow]
• Thomas Scott, Vice-Dean and Professor, Department of Accounting & Management Information Systems, School of Business, University of Alberta

Moderator:

• Michel Magnan, Professor (Lawrence Bloomberg Endowed Chair in Accountancy), Department of Accountancy, John Molson School of Business, Concordia University

Abstract

In recent years, accounting standards, and their elaboration and implementation, have received widespread attention from policymakers, investors and creditors. The latest example is the discussion surrounding the potential role that fair value accounting may have played (or not played) in the still ongoing financial crisis. The crisis helped expose the fact that accounting information is widely used throughout our economy for regulatory, contractual, investment, compensation and other purposes. Therefore, accounting standards have the potential to affect decision-making by economic agents such as corporate managers, creditors, bank regulators or investors. The purpose of this panel is to discuss the benefits to be derived from the accounting standard-setting process as well as its convergence with public interest. Focusing on recent changes in the conceptual framework underlying financial reporting, Professor O`Brien will provide a critical assessment of how accounting standards are in the public interest. Relying on their experience on Canada’s Accounting Standard Board as well as on their interactions with the International Accounting Standards Committee, Professor Scott and Mr. Paul Cherry will bring their own perspective on the issue. Both viewpoints will be informed by the latest research findings.

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The Challenges of International Harmonization in Accounting and Auditing Standards (3:30 to 5 pm)

Speaker:

• William R. Kinney, Jr., (Charles & Elisabeth Prothro Regents Chair in Business and Price Waterhouse Fellow in Auditing), Department of Accounting, McCombs School of Business, University of Texas at Austin; member of the International Auditing and Assurance Standards Board (IAASB) [slideshow]

Moderator:

• Michel Magnan, Professor (Lawrence Bloomberg Endowed Chair in Accountancy), Department of Accountancy, John Molson School of Business, Concordia University

Abstract

Firms from around the world are currently in the midst of a major and perhaps unique harmonization experiment as countries converge toward a single framework for both the preparation (International Financial Reporting Standards) and the audit (International Auditing Standards) of their financial statements. In this session, Professor Kinney will rely on his extensive experience, in both the United States and internationally, to discuss the tensions brought by trying to integrate International Financial Reporting Standards (IFRS) and Fair Falue accounting into auditing standards and practice. Moreover, he will discuss how the interaction between IFRS and Fair Value affects the future conduct of accounting and its value to prospective clients and users. In some sense, the value of services provided by accounting professionals may be changed forever by these new developments.

Partners:

• John Molson School of Business and Lawrence Bloomberg Endowed Chair in Accountancy, Concordia University