The General Synod office of the Anglican Church of Canada is leading what it hopes will be a co-ordinated response with dioceses and parishes across the country commenting on proposed changes to the rules governing the way they report their financial information.
The Accounting Standards Board (AcSB) in Canada has invited not-for-profit organizations to comment on the proposal that would see them use the same system of financial reporting that publicly traded corporations will soon be using. “There’s been a movement to try to align accounting standards across the world, so when one person looks at a set of financial statements in one country, they are using the same standards that are used in another country,” says Michael Herrera, interim treasurer for the Anglican Church of Canada. “That is the whole basis for IFRS, which is the International Financial Reporting Standards,” he says, but “when you try to put charitable organizations in the same realm as publicly traded organizations it becomes a challenge because the users of the financial statements have very different needs than a shareholder would have.”
If the church was required to use IFRS, Mr. Herrera says it would greatly increase the amount of financial reporting required, and the accounting and audit costs associated with it would increase “at least ten-fold.” The additional information that it generated would be of no benefit to end users. For example, potential donors wanting to give money to a diocese would have to sift through consolidated financial statements that include all of the information for individual churches in the diocese as well. “They are interested in seeing what the diocese did as a separate entity. Picking up all the individual churches is not a meaningful number for the user,” says Mr. Herrera.
Some not-for-profit organizations might want to use the IFRS system, particularly if they have an international donor base, says Mr. Herrera, but there should be a reasonable and comparable alternative similar to what the AcSB is developing for private enterprise but adapted for the not-for-profit sector. “Not-for-profits and charitable organizations need to be given a choice because we’re not all alike,” he says. “There are size issues, user differentials. A university or a college is very different from a faith-based organization which is very different from the Girl Guides, and all of their users have very different needs.”
The national office is writing a response which will be posted on the Anglican Church of Canada’s Web site, www.anglican.ca , in May, and it plans to share the document with all of the dioceses, encouraging them to submit their own responses. “We hope it will have a trickle-down effect with the dioceses sharing their response with the parishes. We don’t expect all of the various levels of the church to have the same technical savvy so if you see what our response is or the diocese’ response is you can simply make some minor editorial changes if you agree and then submit your letter,” says Mr. Herrera, noting that it is important for the AcSB to hear from many organizations of different sizes and that such input has been effective in the past.
The church has also had preliminary meetings with the United Church and the Presbyterian Church and agreed to share their responses with each other “so that it is not seen as an Anglican issue or a Presbyterian issue, but as a faith-based issue,” says Mr. Herrera.
The deadline for submitting responses is June 30. More information about the proposed changes and how to submit comments to the Accounting Standards Board are available at http://www.acsbcanada.org/4/6/0/1/4/index1.shtml