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TORONTO, March 9, 2009 – Canada’s Chartered Accountants are providing further guidance to help companies communicate to investors as the global economic crisis continues. The Canadian Institute of Chartered Accountants (CICA) issued a special Alert last fall aimed at helping companies supplement financial statements by providing useful information through Management’s Discussion and Analysis (MD&A). The new Canadian Performance Reporting Alert titled MD&A Disclosures In Volatile and Uncertain Times — Volume2 sets out additional considerations when preparing MD&A in a challenging economy. “Investors want a frank discussion focusing on what has changed with specific attention to an entity’s ability to fund its plans for the immediate future,” said Chris Hicks, Principal, Knowledge Development, with the CICA. “This may involve entities changing the structure of their MD&A to better meet the information needs of investors in these challenging times.” The major drivers that have changed as a result of the tough economic climate should be considered when preparing MD&A. For many entities, these may be summarized as the 5Cs: - Credit availability and cost
- Customer demand
- Currencies
- Commodity prices
- Counter parties
“Investors rightly bring heightened skepticism to management’s assessment in tough times,” said Hicks. “A thorough discussion of liquidity is essential. This should be able to be read as a stand-alone part of the MD&A and should include how the risks of changes in the major drivers relate to liquidity.” Both the original Alert and Volume 2 can be found on a special CICA site dedicated to the global financial crisis (www.cica.ca/financialcrisis). The special site provides one-stop access to information and guidance to help CAs and other leaders in Canada’s business and governance communities manage in these challenging times. The Canadian Institute of Chartered Accountants (CICA), together with the provincial,territorial and Bermuda Institutes/Ordre of Chartered Accountants, represents a membership of approximately74,000 CAs and 10,000 students in Canada and Bermuda. The CICA conducts research into current business issues and supports the setting of accounting, auditing and assurance standards for business, not-for-profit organizations and government. It issues guidance on control and governance, publishes professional literature, develops continuing education programs and represents the CA profession nationally and internationally. CICA is a founding member of the International Federation of Accountants (IFAC) and the Global Accounting Alliance (GAA). -30- For more information or to arrange an interview, contact:
Tobin Lambie, Manager, Media
CICA
(416) 204-3228
tobin.lambie@cica.ca
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