Public accounting in Canada: a new CMA public accounting program, soon to be available as a post-designation area of specialization for CMAs, will create expanded opportunities for management accountants and enhance their value proposition for businesses and clients.
The public accounting landscape
CMAs are currently eligible to practice in the field of public accounting in all provinces and territories except Quebec and Prince Edward Island. The right to practice in public accounting is normally bestowed through provincial legislation. Some CMA Canada partners have established defined public practice rules and codes of ethics, and provide practice reviews to ensure the quality of the work provided by CMAs.
Internal trade interpretations
Much of the impetus for opening up the practice of public accounting in Canadian jurisdictions to qualified CMAs and CGAs, in addition to CAs, is the result of the interpretation of the Agreement on Internal Trade (AIT), legislation enacted by Ottawa in 1995 to limit trade restrictions between Canadian jurisdictions. The AIT requires provinces to provide access to public accounting for professional accountants from any Canadian jurisdiction. It recognizes that each jurisdiction can establish its own standards for public accounting (potentially using CA standards as a benchmark), provided such standards don't infringe mobility rights or favour one professional body over another.
It was in this context, as well as the need to enhance public accounting standards in light of corporate fraud, that Ontario implemented changes to provincial legislation providing equal access to licensure in public accounting to all qualified professional accountants. Proclaimed in December 2002, the Justice Statute Law Amendment Act in Ontario opens the practice of public accounting to qualified CMAs and CGAs, in addition to CAs. The Act broadens competitive choice in public accounting services to support economic growth, while ensuring that businesses, investors and the public are protected through the consistent application of high regulatory standards.
The Ontario Public Accounts Council
Under the Ontario legislation, the Public Accounts Council, which is the regulatory body for the industry, has been reconstituted as the guardian of public accounting standards in Ontario, responsible for standard-setting and oversight of the licensing bodies. Direct licensing and regulation of individual public accountants is being carried out by CMA Ontario, CA Ontario and CGA Ontario, upon meeting the required standards set by the Council.
The new Public Accountants Council is now establishing the standards that CMAs, CAs and CGAs will be required to meet in order to qualify for a license. These standards will enable CMA Ontario to define the additional training and evaluation that CMAs will need to fulfill to practice public accounting, including incremental education, examination and practical experience requirements. Throughout the reform process, CMA Ontario has been consistent in its call for higher standards, and has made specific recommendations to the Attorney General in this regard.
In Quebec, the Office des Professions, the provincial body that oversees professional corporations, is brokering discussions with the Quebec CMA, CA and CGA accounting bodies to allow non-CA professional accountants full access to public accounting practice. This follows the release of an official ruling that Quebec's current audit restrictions are inconsistent with the Agreement on Internal Trade. Discussions may lead to the establishment of new legislation in Quebec and the subsequent development of agreed-upon public accounting standards.
New opportunities post-designation
"Opening up public accounting to CMA Canada members offers significant opportunities for CMAs," notes Richard Benn, vice-president of knowledge and program development at CMA Canada. "CMAs who meet the requisite requirements to practise in the area of public accounting will clearly benefit from the ability to undertake work as it relates to audits, review engagements and compilations. On a much broader front, equipping CMA Canada members with public accounting expertise will enhance their competitive position. It will enable CMAs to provide a continuum of professional accounting services to employers and the public, and greatly strengthen the CMA value proposition for business."
CMA Canada is establishing public accounting for CMAs as a post-designation area of practice. This ensures that expanding the field of practice for CMAs to encompass public accounting does not compromise the CMA brand, nor diminish in any way the strategic focus of the organization. The public accounting area of practice is an extension of the CMA designation that adds incremental knowledge, skills and attributes that prepare CMAs to practice in the assurance area at the highest standards. This area of practice builds on the core competencies of CMAs and will require additional education and work experience that is incremental in relation to the CMA designation.
Establishing a high national standard for the area of public practice reinforces the overall strength of the CMA brand for quality and integrity, and provides the potential to strengthen CMA Canada's position within the profession through participation in setting accounting and auditing standards, nationally and internationally.
In fact, the practice of public accounting fits well with the CMA brand. The essence of the brand-building success will continue to differentiate and distinguish CMA Canada members, whether they choose to enter public accounting or another field of strategic financial management practice. CMAs who practise public accounting, like CMAs who provide other strategic financial management services, will build successful businesses and careers, and deliver successful ideas, solutions and results for their employers and clients.
National standard for public accounting for CMAs
As a consequence of establishing a public accounting area of specialization, one of the strategic issues CMA Canada has addressed is determining how and when CMAs will acquire the tools, techniques, knowledge, training and support needed for the practice of public accounting at a level that will meet customer expectations and meet or exceed legislated requirements and those standards established by CMA Canada and its partners.
This has involved the establishment of a National Standard for Public Accounting for Certified Management Accountants, referencing and complementing the National Standard for the Accreditation of CMAs. The national standard for public accounting, approved by CMA Canada's Board of Directors in May 2004, addresses education content, work experience and quality control (encompassing continuing professional development, practice inspections, code of ethics, and professional conduct and discipline) required for CMAs who practise in the public accounting field. [The National Standard for Public Accounting for Certified Management Accountants is posted on CMA Canada's website at www.cma-canada.org.]
"A single national standard means that CMAs have complete and unrestricted mobility in their public accounting practice opportunities throughout Canada," says Benn. "It also ensures that all CMAs in Canada are educated and trained at a standard that is recognized by the marketplace for its quality and uniformity. We want it recognized that CMA public accountants are highly competent and capable, and that they are equal to, or exceed, the pre-eminent position of any other public accountants in Canada."
CMA Canada's National Standard for Public Accounting for Certified Management Accountants also addresses external forces in the accounting profession, affecting all professional accountants, whether they are working in the territory of management accounting or in public accounting. They include:
* The need to restore investor confidence by raising standards by which the accounting profession must comply;
* Addressing corporate governance issues and their impact on the accounting profession;
* Addressing issues around Sarbanes-Oxley and similar rules and regulations being implemented in jurisdictions across Canada, including the white paper issued by the Ontario Securities Commission and the introduction of Bill 198, which strengthens the Securities Act in Ontario;
* The global move toward developing and adopting uniform international accounting standards.
Meeting the standard
CMAs who are not practising as public accountants will have the opportunity to do so by completing the requirements of the CMA National Standard for Public Accounting, which includes a course of study covering assurance and select taxation and financial accounting topics not covered in the CMA accreditation program, a two-part CMA Public Accounting Examination testing topics from the post-designation course of study only, and a minimum number of chargeable hours in public accounting under the supervision of an approved training organization or individual.
At this juncture the design criteria for the two-part CMA public accounting examination has been developed, covering financial accounting and advanced taxation, and assurance. The plan is for CMA Canada's provincial and territorial partners to introduce CMA Public Accounting courses of study in the fall of 2006. CMA Canada is aiming to introduce the first CMA Public Accounting Examination in June 2007.
Benn emphasized that CMAs already practising in public accounting in various jurisdictions across Canada will not have to re-qualify to meet the CMA Canada national standard, provided they meet pre-defined requirements of practice experience and education. Practitioners who meet pre-defined requirements will not be required to take the CMA Public Accounting course of study or write the CMA Public Accounting Examination. These pre-defined requirements will be communicated to members by the CMA provincial and territorial partners in the months to come.
"The CMA designation will continue to be the pre-eminent designation for management accounting," says Benn. "The addition of the public accounting area of practice for CMAs is a logical step. All CMAs should have the opportunity to move into the public accounting area should they choose."
R. David Fletcher is vice-president of public affairs for CMA Canada.
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|Author:||Fletcher, R. David|
|Date:||Apr 1, 2006|
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