A discussion paper, released by the Certified General Accountants Association of Canada concludes that Canada would be well served by adopting International Auditing Standards (ISAs) for use as the domestic auditing standards in Canada.

In The Adoption of International Auditing Standards in Canada, author Dan Simunic, Professor of Accounting at the Sauder School of Business at the University of British Columbia, assesses the arguments for and against adoption of ISAs. While adoption of ISAs would involve legislative changes and one time costs, Simunic argues that such a change would yield net benefits.

“Through this analysis, I find few good reasons for retaining the present system of domestic auditing standard setting,” said Simunic. “I therefore conclude that, from a social policy perspective, the maintenance of separate Canadian domestic auditing standards is difficult to justify.”

Simunic notes that while there has been considerable discussion about the relative merits of international accounting standards, the same attention has not been paid to auditing and assurance standards.

“In cooperation with Professor Simunic, CGA-Canada is publishing this paper to contribute to the ongoing discussions related to the global evolution of international auditing and accounting standards,” said John Nagy, chairman and CEO of CGA-Canada. “CGAs have been leaders in advocating the adoption of international accounting standards in Canada. This paper makes a strong case that adoption of international auditing standards should also be considered.”

In 1999, CGA-Canada formally recommended the adoption of international accounting standards in Canada. That position was supported by a research study by Alan Richardson, and Ian Hutchinson, The Case for International Accounting Standards in Canada: A Detailed Report. Both reports are available on the CGA-Canada Web site.