Did you know Canada has three professional accounting designations and three separate professional organizations, all geared toward generally the same thing?
Maybe you did know that, but I will bet you can't tell me the distinct differences between a CA, CMA or CGA.
Most of us think of accountants as those people who help us with income tax returns, especially complex ones, and give us tax advice when needed. For some of us, accountants help out with the bookkeeping for our small businesses and the preparation of financial statements.
However, the bulk of accountants' work comes from medium to large businesses. Any business that wants to borrow money from a financial institution or raise money in the public markets needs to have financial statements prepared and audited by a recognized accounting firm backed up by professional designations.
Different accountants actually have advanced training and experience in financial reporting, audit and assurance, management accounting, taxation and strategy and governance. The services are provided to industry, government and the public. They are a versatile bunch.
But growing confusion has developed over which designations are acceptable in which areas. The rules for each designation are not consistent. Accounting is provincially regulated, so naturally that adds to the fun.
In 2012, Quebec mandated the merger of the CAs, CMAs and CGAs into one professional accounting body and one professional designation: CPA, or Chartered Professional Accountant.
Starting in 2014, that will be the situation developing in all provinces in Canada, with a couple of exceptions. This initiative has been led by the accounting organizations themselves, and branded as "CPA one -- we're better as one."
Kudos to those professionals who have placed benefit to the public above protecting their own turf. That's a hard thing to do, given each group's long legacy and tradition. Having a total of 40 provincial accounting associations to co-ordinate makes this an amazing accomplishment.
Each provincial government must now bless the mergers and transfer the self-regulatory authority to the new body, CPA Canada nationally, with provincial bodies each adopting their own provincial name.
The exceptions I mentioned are that the CGA organizations in Manitoba and Ontario have chosen not to participate and will instead attempt to continue on their own.
In the past, the three accounting associations have all had their own focus, specialties and competency requirements. Going forward, these will be standardized, based on the technical competencies, ongoing professional-development requirements and the tenets of ethical and professional behaviour required in today's business world.
Lessons learned through episodes such as Enron, WorldCom and the financial crisis of 2008 have resulted in stiffer and more standardized accounting practices around the world. These will be reflected in the new standards.
The new CPA competency map outlines the requirements, which may have some accountants adding to their professional skills through new exams. Going forward, you will see the CPA designation being advertised and ultimately displayed by members. Now you will know what this means, and that this is a made-in-Canada designation striving for consistency with international designations.
This week's NO BULL Tip:
The best way to "buy low and sell high" is to set up an automatic rebalancing system, and then implement it consistently.
-- From my book Managing the Bull.
Dollars and Sense is meant as an introduction to this topic and should not in any way be construed as a replacement for personalized professional advice.
David Christianson, BA, CFP, R.F.P., TEP, is a financial planner, adviser and vice-president with National Bank Financial Wealth Management, and author of the book Managing the Bull, A No-Nonsense Guide to Personal Finance.