An email discussion with my teaching colleague, Richard Musselman, in relation to whether the delegation of Canadian accounting standard-setting authority to the International Accounting Standards Board should be of concern.

Thought there were some major concerns, as previously discussed.

Interchange reproduced with permission:


My understanding of legislative authority is that the laws (of Canada and/or Ontario?) delegate matters in accounting standards setting and the licencing of accountants to CPA Canada and then CPA Canada has full control to run the profession how they see fit. The government would take away this authority if the government felt that CPA Canada was not acting in the best interest of the Canadian public. You may need to do some fact-checking regarding this, but this is my understanding.


Remember the law of agency. A delegate cannot further delegate, without permission of the delegator. Or do I seem off here?


The delegations of authority in this situation do not seem problematic to me. I do think that accounting has become more complicated and more layered than it should have become, but I do not think the delegations of authority have played a role in this issue.


How could it not be problematic? It is a fundamental legal principle, applied to any form of delegation. In addition, I would think that the delegation of a licensing authority is different from delegating a legislative role. However, in both cases, CPA Ontario or CPA Canada, as the case might be, cannot simply hand the authority over to someone else. In addition, there is no concept of substitute performance in a delegation situation, which is similar to agency.

When CPA Canada has a delegated standard-setting authority, I don’t believe this relates to “running the profession”, since accounting standards are ultimately a matter of public welfare.

The argument that everything must be OK because the government hasn’t taken the standard-setting authority away is something along the lines of acceptance by silence. Which was the CPA Canada position all along. If nobody stops us, we must be OK to do it. But we won’t even consider formally asking for permission to do it, in case they wonder what we are doing.


I do not think that this potential technicality is important. That being said, I acknowledge that:

1) Sometimes technicalities are important,
2) Sometimes previously unimportant technicalities become extremely important and relevant, and,
3) I may be missing something here.


About brucelarochelle
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