Toward global strength: the proposed merger of CMA Canada and Canadian Institute of Chartered Accountants would create a stronger, more influential accounting voice in Canada and around the globe.
Why the proposal is on the table
CMA and CICA entered discussions on a potential merger because both felt it made sense, from both a strategic and public interest perspective.
The new accounting body would represent Canada's pre-eminent business professionals, who would offer a range of services in three principal areas of practice: management, audit and assurance, and taxation. They would be accountable to a profession that requires its members to adhere to the highest professional standards of certification, continuing education, integrity and discipline. Consisting of more than 100,000 members and 18,000 students, the new body would provide combined CA and CMA expertise in corporate governance, financial management, management accounting, tax, and audit and assurance, all delivered according to one high professional standard.
"This merger would create a larger, stronger, more influential body that is able to supply its markets with Canada's pre-eminent business professionals," said CMA Canada Chair Michael dos Santos. "It would generate growth for the new profession and provide its members with broader career choices and enhanced opportunities."
Such a move will have benefits on both a national and international level. It will reduce confusion in the marketplace and strengthen the profession's brand. It would also give the new profession new opportunities to enhance standards and strengthen and streamline relationships with regulators and educators.
Canada plays a prominent role in the international governance of the accounting profession, including standard setting in accounting, assurance and corporate governance. The merger would combine CMA and CA expertise in research and standard setting, create a broader base of resources for standard setting, and give the majority of Canada's professional accountants a single voice on the international stage as the fourth largest organization of its kind in the world.
CMAs and CAs share many objectives, values and qualifications, and bring to a merger many complementary strengths. This new organization would capitalize on the unique qualities of each designation and build on their common qualities, further equipping members to take on an even broader range of career opportunities and leadership roles in Canadian business. It would permit two outstanding professional organizations to combine to create a well-resourced, respected body that is ideally positioned to address common, complex issues, such as the rapid pace of change, increased competition, globalization, and shifting demographics.
"We believe the case for merger is a compelling one, not only for our members, but also for employers, clients and business generally," said Steve Vieweg, CMA, FCMA, president and CEO of CMA Canada. "The merger would bring greater clarity and strength to the accounting profession in Canada by eliminating much of the confusion that arises from multiple professional accounting bodies. It would improve services to employers, clients, the public and members resulting from economies of scale and increased coordination.
"Collectively, we will be able to offer outstanding skills, knowledge and expertise to strengthen, corporate accountability and restore investor and public confidence in our capital markets," continued Vieweg.
He also stressed that opportunities for members would expand. "The merger would generate growth for the new profession and provide members with broader career choices. It would provide enhanced opportunities for CMAs who wish to qualify to practice in audit and assurance or taxation, without requiring the establishment of new certification programs."
The designation for the new profession
One of the principles underlying the merger is that the designation of the new profession must have a high level of recognition and respect, both in Canada and internationally, clearly identify the profession of accounting to the public, not reflect any one principal area of practice, and be the same in every jurisdiction. The CA designation meets those criteria. Therefore, the designation for members of the new profession would be CA--Chartered Accountant. All existing CMAs in good standing would become members of the new profession on January 1, 2005, the merger's anticipated effective date. They would not have to take additional courses or be recertified to use the CA designation. All members of the new profession in good standing would be known as Chartered Accountants.
In certain jurisdictions, CMAs in good standing may have the choice to retain and use the CMA designation for up to five years after the merger date, but they could use only one designation (CA or CMA) unless they have earned both. At the end of the five-year period, all members of the new profession in good standing would be required to use the CA designation. CMAs in good standing would not have to undertake additional courses or recertification requirements to be able to use the CA designation at the end of the five-year period.
The merger would generate growth for the new profession and provide its members with broader career choices and enhanced opportunities. Members in the management stream would comprise about 70% of a larger, stronger, professional body, which would combine its resources to offer enhanced, coordinated services and support.
Regarding the areas of practice, the new profession would fulfill its statutory responsibilities, including supporting standard setting for accounting and assurance and its mandate to protect the public interest. During the transition period, the new profession would, at a minimum, maintain its current combined levels of commitment to research, development, education and member support in each area of practice--management, audit and assurance, and tax.
Regarding governance, the composition of the initial transitional Board of Directors in each jurisdiction, excluding public members, would reflect the new profession. The Board would be required to reflect the proportionate numbers of members of the CA profession and CMA profession at that time. However, CMAs would make up at least one-third of the Board where the regulatory framework permits. Provisions would also be put in place to ensure that no more than 50% of Board positions (excluding public members) could be held by individuals who are active for the majority of their time in any one of the three principal areas of practice (management, audit/assurance, taxation). Generally, the composition of the transition committee and associated committees would reflect equal representation from CMA Canada and the CICA.
The new certification process would maintain the current high standards of excellence, integrity and ethical conduct of the CMA and CA professions, meet or exceed international standards, and meet the requirements of the new profession's international reciprocity and mutual recognition agreements. It would incorporate the best of both certification programs. CMA candidates and students would be given a reasonable length of time to complete their programs. A joint CMA/CA Certification Task Force will be established to work out a detailed plan for the new certification process and the transition to it. New education and evaluation requirements would be phased in with sufficient lead time for candidates to adequately prepare. Candidates currently in the CMA program and who are scheduled to complete the program after January 1, 2005, would be awarded the CA designation on successful completion of the program. The multi-stream model for CA certification incorporates the principles for certification approved by the leadership of the national CA and CMA bodies and would serve as the starting point for the discussions of the Joint CA/CMA Certification Task Force. The task force will be expected to further develop the specific details of the new certification process before a final model is adopted.
Guiding principles for the merger have been approved by the leadership of the national CA and CMA bodies. The final step in approving the merger would be membership ratification this fall by each provincial and territorial body. If the merger is approved, it is anticipated that the new profession would be created on January 1, 2005. There would be a transition period of approximately three years to consolidate the CMA and CA professions and put the new profession into operation.
Although this article outlines the basic concepts behind the proposed merger, it is by no means exhaustive. Please visit the CMA Canada Web site for further details and to obtain updates on the merger process.
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|Date:||Jun 1, 2004|
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