Accounting Industry in Canada and Its Future

Cite this

The accounting profession in Canada followed the same structure for several decades and no major change took place in its framework in all these years. However, the changing global economic and financial scenario fueled by intense globalization forces has convinced leaders to rethink ways the Canadian accounting profession was structured. The accounting profession in Canada is presently going through a major change phase. There is an ongoing merger, which is presently taking place between the three accounting professional bodies in Canada. These accounting professional bodies include the Chartered Accountants of Canada (CA), the Certified Management Accountants of Canada (CMA), and the Certified General Accountants (CGA). The Quebec government introduced the possibility of a merger between accounting professional bodies by removing all barriers and differences that long-separated accounting professionals and firms with different affiliations (McMahon). These accounting professional bodies have signed a mutual agreement to merge their individual existence under a single banner of Chartered Professional Accountants (CPA) (May 9, 2013: BC’s Accountants Unite under Chartered Professional Accountant Designation para 2). In this paper, the future of the accounting profession in Canada is discussed. Moreover, it includes personal reflection encompassing my learning and expectations from the changing scenario in the Canadian accounting profession.

On-Time Delivery!
Get your customized and 100% plagiarism-free paper done in as little as 3 hours
Let’s start
322 specialists online

One of the main motivators of the proposed change in the Canadian accounting profession was the international convergence of accounting and auditing standards. With the removal of barriers in trade, the mobility of accounting professionals increased, and it has become pertinent for them to have the ability and knowledge of diverse accounting standards and practices. Only by doing so, accounting professionals can form strategic alliances with their clients and provide them accounting services globally. Despite being part of the global convergence of accounting and auditing standards, the structure of the Canadian accounting profession remained fragmented (Guo 2). Historically, the Canadian accounting profession was governed and regulated by different regulatory frameworks. Members of CMA and CA have carried out a series of discussions over proposed merger of the three accounting professional bodies in order to form a consensus about the ongoing change. They are of the view that this change is inevitable. The common understanding has been developed that the merger of accounting bodies will improve the efficiency and effectiveness of the profession. It is expected to serve the public interest, and also provide better support to members of CPA (Uniting the Canadian Accounting Profession 3).

In the recent years, a clear distinction between three accounting designations blurred. Previously, chartered accountants normally sought positions in firms offering accounting and auditing services (McMahon). CMAs and CGAs worked in different industries. However, over the years, a large number of chartered accountants started to work in industries other than accounting field. Moreover, CMAs and CGAs are now increasingly working in public accounting practices. In addition to this, there was an overlap in services rendered by individuals and firms associated with three accounting bodies (Richardson and Jones 136). It was difficult to differentiate between the content of advertisement / messages delivered by these individuals and firms. The proposed merger is expected to improve efficiencies of services and it would also reduce the cost of providing accounting and auditing services (Uniting the Canadian Accounting Profession 7). Accountants with CPA qualifications would be able to work in all territories of Canada, which would benefit all practitioners. The ease of transferability would improve the flow of human capital and businesses using services of professional accountants would be able to establish strong strategic alliances with accounting firms irrespective of their geographical dispersion.

Furthermore, there was an increasing pressure on the Canadian government to bring reforms in the accounting profession. Such reforms are expected to assist the government in pursuing its policy agendas, improving commitments related to trade, and also curtail perceived bureaucratic nature of the regulatory bodies. The possible merger of the accounting profession in Canada could prove to be beneficial for bringing in the talent and improved labor mobility. Similar initiatives have been proposed in the UK, which is also considered to have a fragmented accounting structure (Uniting the Canadian Accounting Profession 5). Therefore, it could be suggested that the proposed merger in Canada is not carried out in isolation and lessons have been learnt from other countries.

The proposed plan of Canada to merge three accounting professional bodies has raised criticism from different groups. Chartered accountants in Canada are of the view that this proposed merger could influence their professional identities as they consider themselves to be superior to Certified Management Accountants (CMAs) and Certified General Accountants (CGAs) (Uniting the Canadian Accounting Profession para 1). There is a perceived unfairness in the proposed merger, and the leadership has been criticized for not giving any consideration to the concerns of chartered accountants (Guo 1). The criticism was based on the loss of professional identity of CAs and the dilution of perceived brand value. Many CAs argued that the role of the governing body in this merger process was weak. Instead of representing the collective interests and opinions of CA members, it decided to go ahead with the merger. Moreover, they argued that CMA and CGA would receive an undue advantage from such merger as they will be allowed to use the same designation. However, CPA has allowed all existing members to use their previous designations for the next 10 years.

It would help in reducing the divide between individuals with different designations. The use of the previous designation by the existing members for the next 10 years was not welcomed by CGA (Ruth). In the same manner, CGA and CMA made recommendations in the interest of their members to ensure that they are given same privileges under the new set up (Ruth page). Some also argue that similar merger was proposed in 2004, but it was never materialized. The outcome of the current merger is still doubted by members of accounting professional bodies (Guo 2). It is suggested that the globalization forces have dramatically affected the nature of the accounting profession in the recent years. All accounting organizations have experienced organic growth and they all have adopted converged accounting and auditing standards. The global professional environment has changed significantly, which is much different from 2004. Moreover, after the merger, CPA will be considered as one of the largest accounting bodies and it would be able to play an important role in bringing change in the global accounting structure (Uniting the Canadian Accounting Profession – FAQs para 4).

Initially, CA and CMA, which are two national organizations, agreed to unite. However, chartered accountants are against the inclusion of CGA in the merger. There is a continuous attempt by CAs to generate a public opinion that they are better professionals than professions with other accounting designations (McMahon para 5). However, despite steps undertaken by CA to increase its membership and to give permissions to unemployed students of CA write qualified reports including CKE, UFE, and SOA, the popularity of CA is on decline. In contrast, memberships of CGA have been increasing in all regions of Canada. The flexibility in allowed time for completion of the qualification provided by CGA to its members has attracted many individuals who are already working in their respective organizations and sought CGA as an additional qualification. The difference between CPA and CGA remains as CPA offers a two-year program whereas, members of CGA usually took five to six years to complete their education. Moreover, in order to support the merger process, it is agreed that there will be no expansion or withdrawal of rights as a result of the merger.

Yes, we can!
Our experts can deliver a custom Accounting Industry in Canada and Its Future paper for only $13.00 $11/page
Learn More
322 specialists online

In my opinion, the proposed changes in the Canadian accounting profession are confusing for all individuals who wish to pursue a career as an accountant. After the proposed merger between three accounting bodies in Canada, efforts are being made to offer Chartered Professional Accountant (CPA) education to students. The choice of education would, therefore, become easier for students. CPA students would follow the same curriculum and any previous differences in the content of curriculum would be removed. In addition to this, I feel that the accounting education at the university level is less likely to be affected by this merger. I am of the opinion that the curriculum presently followed by universities in Canada is competent to prepare students for a professional qualification of highest standards. The change will put all accounting professionals on the same level to acquire job positions in different industries.

In my opinion, this will provide a great opportunity to students like me to receive the best qualification and find a suitable job in Canada or overseas. The merger would eliminate differences in designations, which would benefit individuals who are seeking a professional accounting qualification. However, at the same time the prestige associated with CA qualification would diminish (Uniting the Canadian Accounting Profession – FAQs para 7). Moreover, it is understood that the path to CPA is not going to be easy as it would adopt the same level of entry requirements as CA. Also, there are no plans to increase the number of memberships. The limited positions would increase the competition amongst students. This would create a challenge for me and I have to work harder in order to attain my goal. After qualifying as a CPA, I would have a choice to acquire further professional certifications that would help me progress in my career.

From the discussion provided above, it could be indicated that the proposed merger, which is still an on-going process, it would shape up the future of the accounting profession in Canada. It would bring economies of sales, cost savings, and efficiency in services. This would attract human capital to Canada and also create better opportunities for Canadian accountants as they would be able to work in all territories of Canada and other countries. Presently, there are problems with the acceptance of the merger by CAs. However, efforts are made to remove all uncertainties and concerns related to the merger. The commitment by the leaders of three accounting bodies has been the primary reason for the merger to go ahead.

Works Cited

Guo, Ken H. Understanding Why and How Some Chartered Accountants Object to the Proposed Merger of the Three Accounting Professions in Canada. 2012. Web.

May 9, 2013: BC’s Accountants Unite under Chartered Professional Accountant Designation. 2013. Web.

McMahon, Tamsin. Accounting designations get together. 2013. Web.

Ruth, Gordon. CGA Position on Possible Accountancy Merger. 2014. Web.

Cut 15% OFF your first order
We’ll deliver a custom Accounting paper tailored to your requirements with a good discount
Use discount
322 specialists online

Richardson, Alan J. and D.G. Brian Jones. “Professional “brand”, personal identity and resistance to change in the Canadian accounting profession.” Accounting History 12.2 (2007): 135-164.

Uniting the Canadian Accounting Profession. 2011. Web.

Uniting the Canadian Accounting Profession – FAQs. 2014. Web.

Cite this paper

Select style

Reference

BusinessEssay. (2022, March 28). Accounting Industry in Canada and Its Future. Retrieved from https://business-essay.com/accounting-industry-in-canada-and-its-future/

Reference

BusinessEssay. (2022, March 28). Accounting Industry in Canada and Its Future. https://business-essay.com/accounting-industry-in-canada-and-its-future/

Work Cited

"Accounting Industry in Canada and Its Future." BusinessEssay, 28 Mar. 2022, business-essay.com/accounting-industry-in-canada-and-its-future/.

References

BusinessEssay. (2022) 'Accounting Industry in Canada and Its Future'. 28 March.

References

BusinessEssay. 2022. "Accounting Industry in Canada and Its Future." March 28, 2022. https://business-essay.com/accounting-industry-in-canada-and-its-future/.

1. BusinessEssay. "Accounting Industry in Canada and Its Future." March 28, 2022. https://business-essay.com/accounting-industry-in-canada-and-its-future/.


Bibliography


BusinessEssay. "Accounting Industry in Canada and Its Future." March 28, 2022. https://business-essay.com/accounting-industry-in-canada-and-its-future/.