1 GFOA Municipal Accounting and Auditing Best Practices Workshop What’s on the Horizon – Panel Discussion Gail Stephens, CEO BC Pension Corporation

2 More Public Accountability Demands The political reality is that accountability means the government of the day justifying and explaining its actions.

3 More Public Accountability Demands Institute for Public Policy Research suggests that accountability consists of 3 strands:  Transparency  Clarity of responsibility  Responsive to citizen’s needs, priorities and expectations

4 Regulation in Accounting Standards Creation of an independent Public Accountability Oversight Board CEOs and CFOs certification Audit Committee expertise, evaluation, mandate, independence, training requirements

5 Regulation in Accounting Standards Strategies for minimizing accounting risk and liability, quality assurance programs, integrated risk management Accounting standards, harmonization and new regulatory requirements for GAAP Definition of non-GAAP financial measures

6 Regulation in Accounting Standards Internal Audit independence Class Action suits

7 Demands by Bond Rating Organizations The collapse of Enron and others raised fresh questions about the scrutiny efforts of the credit rating agencies

8 Demands by Bond Rating Organizations Impact of unfunded pension or other liabilities Aggressive actuarial assumptions Examination of financial contracts Hiring accountants, off- balance sheet risk transfer specialists and corporate governance specialists

9 Auditing of Performance Measures Can be difficult and costly Do not always measure what is most important and relevant Primary use should be for internal reporting and to funding bodies

10 Auditing of Performance Measures SMART:  Specific  Measurable  Achievable  Relevant  Timely

11 Questions