Public Accounts Committee on May 11th, 2010

[Sheila Fraser]

Thank you.

We actually have what we call a fellowship program with CIDA, which has been going on now for 30 years. Under the program, CIDA funds, through the CCAF, fellows who come in from developing countries. The countries are the target countries for CIDA, and the fellows come into Canada for nine months for training, largely in performance audit. In fact, over the years several of them have become auditors general in their own countries. CIDA is in the process of doing an evaluation.

I think the committee has met the Auditor General of Mali on a couple of occasions. That is part of a larger program that CIDA is funding in Mali to improve governance and accountability. The establishment of that office was a CIDA project. Again, there's an executing agency, which is the Canada School of Public Service, which manages the project. We also provide methodology training, and some of our people, as well, attend. We actually have someone in the Office of the Auditor General in Mali who's there on secondment for 18 months.

So we do selective projects. Obviously we can't do a lot, given the size of the office, but we try to work with CIDA goals and support them to the extent that we can in some of these areas.

As we've mentioned here, we're part of a broader organization of auditors general or equivalent of all the member countries of the United Nations, which is INTOSAI. My office has been very active for a very long time in INTOSAI. We've chaired various committees, and we participate on others in knowledge sharing. For example, in one now there's quite a large international project going on of audits on climate change, and we're members of that. There's another as well that's looking at the economic crisis, trying to identify what went wrong. I encouraged my colleagues to look at Canada to say what went right.

So there are a number of projects like that in which we are participating. I think it is always very beneficial to have those relationships and the sharing of knowledge, and we can learn a lot from our colleagues.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Dreeshen.

Thank you, Ms. Fraser.

Mr. Lee, go ahead for five minutes.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Thank you.

I want to go to the reference to international standards. You refer to the adoption of international standards. Who's adopting them? Who's implementing them, and what's the benefit of adopting those standards?

[Sheila Fraser]

In Canada, the Canadian Institute of Chartered Accountants establishes the accounting standards for the private and public sectors and also establishes auditing standards.

Up to now, and even now, there are what we call boards that do this standard-setting. About two to three years ago the Accounting Standards Board decided, for a number of reasons, that it would be appropriate to adopt international standards with some modification for Canadian reality, and the accounting standards were set by the International Accounting Standards Board, which has representatives from various countries around the world. It is a move to recognize the globalization and in capital markets the need, and to set uniform standards internationally. Canada obviously had to be part of that.

Also, I think realistically that it is very difficult and quite onerous to continue to set standards in Canada. So the international accounting standards are being adopted. Those will be adopted generally by all corporations in the private sector, though there will be some distinction made for the smaller owner-operated ones. But anything listed on the stock exchange, for example, will be adopting this IFRS, and all of the larger crown corporations are adopting IFRS.

As for auditing, it's the same thing. In Canada, the Canadian Auditing and Assurance Standards Board is adopting international auditing standards. So all auditors in Canada will be using, from the end of December 2010, international auditing standards. There's a movement across the country to go to these international standards.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

It's also a movement internationally.

[Sheila Fraser]

Yes.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

What's the benefit? Is it an easier interface between the people who work with you here and the rest of the accounting profession? What would be the bad thing if Canada had better, higher standards than everybody else internationally? Or is it an attempt to get better interoperability between accountants as they all go about their work in doing accounting or auditing?

[Sheila Fraser]

It was driven, I think, in good part by some of the very high-profile disasters--I think we can use this term--in the private sector and by some of the very large audit failures. There was unevenness in standards among countries. But with globalization many of these large multinationals access capital markets internationally, so to get uniformity in the accounting standards I think will help capital markets. And in the auditing profession there was a realization that, again, there needed to be more uniformity, more consistency internationally.

I think Canada has always been recognized as having good standards. Certainly Canada has played, in a number of roles, a very significant role at the international level as well. So it's trying to get uniformity.

We still are faced, of course, with quite a significant difference--hopefully that will be resolved over time--between the international standards and the U.S. Gradually, I hope that we will come to one standard, but that will take some time.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Thank you.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Lee.

We go now to Mr. Payne for five minutes.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Mr. Chair.

I'd like to thank the Auditor General and her staff for attending. I have been very impressed over the years, before becoming a member of Parliament, as to the work you have done. I'd like to compliment you and your department.

[Sheila Fraser]

Thank you.

[LaVar Payne, Conservative, Medicine Hat, AB]

I think it's very important work to get that information out, not only to the members of the House of Commons but also to the public. I think you're providing an excellent service.

I'm a former HR guy, so I understand some of the recruiting difficulties that go on. I'm just wondering if you could help me understand. Do you have ongoing recruiting activities? How do you do that?

[Sheila Fraser]

I'll let Ms. Sachs respond.

[Lyn Sachs]

Yes, we have an ongoing student program, as I explained. That's an annual student plan that we'll hire twenty students, pretty much no matter what, every year, and we make sure there's work for them. That's one plan.

The other thing is, we have ongoing advertisements on our website for openings. This goes on and off, but when we have needs—and currently we do have needs for auditors—we have ongoing spots on our website offering career opportunities.

Thirdly, when we are not getting enough CVs floating around, we also do some advertisement in the various journals across Canada.

Fourthly, we post on the Public Service Commission site.

And there's also a fifth program that we have, which is the issue of referrals from inside our staff. Again, this is just to have people talk, to see if people are interested. Those CVs would go through the normal process of selection inside our office. So there'd still be a competition to meet the criteria.

So we give constant attention. We look at the results on a monthly basis. We're looking at our head counts; we're looking at our needs. It's an ongoing process.

[LaVar Payne, Conservative, Medicine Hat, AB]

On that basis, you're filling all your requirements. I'm assuming that over the past years this has been the same process and you've been able to meet all the additional hires.

[Sheila Fraser]

Yes, I'd say we have been pretty successful. I would add that like many departments and even corporations during the 1990s, in the last economic recession, my office and others stopped the intake, the recruitment, of the junior-level staff. So we have a bit of a gap going through our system. I think a lot of the departments are faced with that. That would seem to be the general kind of approach at the time to dealing with fiscal restraint.

We do have certain areas, mid-management, where we will have competitions for promotions and we'll have more positions than we have people who actually succeed. So we have to work around that and try to figure it out. There are certain levels in the office where we would like to have more people, but certainly at the entry level we don't have a problem recruiting in. We have been successful, obviously, in doing the work planned and getting the jobs done.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay. Thank you.

One of my constituents was wondering about who audits the CBC. I actually went on your website to see if I could find that information, but it wasn't clear to me.

[Sheila Fraser]

We audit the CBC.

[LaVar Payne, Conservative, Medicine Hat, AB]

You audit the CBC.

[Sheila Fraser]

Yes.

[LaVar Payne, Conservative, Medicine Hat, AB]

You audit all of their financials and expenses, and so on.

[Sheila Fraser]

Yes, we audit the financial statements of the CBC every year. It should all be available on their website.

We do what we call a special examination once every ten years. The last one would have been about five or six years ago. We do quite an extensive review of all of the management systems and practices.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay. Thank you.

Do I have time?

[The Chair, Liberal, Shawn Murphy]

You have one minute, Mr. Payne.