The Canadian Accounting Industry

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Introduction

The accounting profession in Canada is undergoing a remarkable revolution based on a proposed framework by the leading accounting bodies, which include the Certified General Accountants, Certified Management Accountants [CMAs], and the Chartered Accountants [CAs]. The three accounting bodies have been engaged in merger talks over the past three years. The objective of the merger is to unify the Canadian accounting credentials through the formation of a new accounting designation.

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However, a number of challenges and setbacks have been encountered, thus complicating the process. Silva-Powell (2014) affirms that the “undertaking has been ambitious and complicated and the prospects for full unification have often seemed uncertain” (par. 1). Despite this challenge, the probability of unification, and thus the formation of the Chartered Professional Accountant [CPA] as the single accounting designation is high due to the commitment the three accounting professional bodies.

The need for unification has emanated from the prevailing global trend within the accounting profession. This research paper evaluates the reasons for the adoption of a unified designation, the necessary changes in the Canadian accounting field, and its impact on current students. It also evaluates the impacts of the unification on the Canadian and international accounting world. Finally, an update on the status of the unification process is provided.

Reasons for a unified designation

Most recognized professional accounting bodies across the world have undergone remarkable changes over the past decades. Some of these accounting professional bodies are contemplating how they can deal with the challenges posed by the high rate of globalization. Examples of such bodies include the Association of Certified Accountants [ACCA] in the United Kingdom and the American Institute of Certified Public Accountants [AICPA] (Unification Framework, 2014).

These accounting bodies are focused on developing a global brand, hence increasing their market share (McMurdy, 2011). However, the Canadian accounting profession is fragmented, which limits its global competitiveness. The three Canadian accounting professional bodies are of the opinion that moving to a unified accounting designation will play an essential role in improving the global profile of more than 160,000 members (Silva-Powell, 2014).

McMurdy (2011) asserts that the global accounting profession is progressively becoming closely-knit and competitive. Thus, the Canadian accounting profession might be crowded due to its failure to undertake the necessary adjustments. It is projected that the designation will enable the Canadian accountants to develop a global profile. This goal will be achieved through the formulation and adoption of a standardized national accounting standard.

National unification will improve the CPAs’ influential capacity on a global scale. Adopting the proposed CPA framework as the unified accounting designation will indicate the expertise of the Canadian accounting professionals in a number of fields, which include assurance, auditing, and business leadership together with strategic and financial management (Silva-Powell, 2014).

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Additionally, the motivation towards a unified designation is further enhanced by the need to improve governance within the Canadian accounting profession. Silva-Powell (2014) emphasizes that a “common certification would bring together the strengths of each organization while giving the Canadian accounting community a unified voice and reducing the number of governing bodies from 40 to 14” (par. 4). Thus, unification will significantly create an opportunity for the three legal professional bodies to share knowledge, hence formulating globally competitive accounting standards. Moreover, members will not be required to explain the difference amongst their various designations such as the CMA, CGA, and CA.

Changes in qualification and process in the Canadian accounting field

A number of changes have been proposed in the unification framework as illustrated herein.

First, the three accounting professional bodies are obligated to evolve to a single designation, viz. the Chartered Professional Accountant [CPA]. The current members of the accounting profession will be granted the new designation upon its approval by the CPA provincial body. However, “members will be required to use the new designation in conjunction with their previous designation for the next 10 years” (Unification Framework, 2014, par. 7). Thus, their legacy designation could bear the following descriptions

  1. First name, last name, CPA, CMA
  2. First name, last name, CPA, CGA
  3. First name, last name, CPA, CA

After the proposed 10-year period, members can only use the CPA designation.

The provincial and national CPA bodies will undertake the promotion of members to the new CPA designation. However, a member of a current accounting body will not be granted the designation of another professional body. Moreover, “the unification will lead to the retention of the existing members’ rights, for example, the public accounting rights” (Unification Framework, 2014, par. 5). However, no new rights will be issued. With regard to members’ rights, the Unification Framework (2014) emphasizes that the “new CPA designation will undertake the responsibility of negotiating on behalf of all the members intending to enter into new Mutual Recognition Agreement” (par.3).

Another notable change with regard to qualification and process of the field of study relates to certification. A new certification program will be formulated under the unified designation. The certification program will be based on the strengths of the current certification programs. It is expected that the certification program will be globally recognizable by professional members, the business community, global accounting organizations, and profession regulators (Unification Framework, 2014). In order to be successful in developing the certification program, a CPA Competency Map will be developed.

The objective of the map is to ensure that the new accounting designation meets the government, public, and industry needs effectively. However, “admission into the new program will require potential candidates to be undergraduate degree holders in accounting and business courses” (Unification Framework, 2014, par. 6). Moreover, a post-graduate professional education program will also be designed. Another issue that will be considered in the formulation of the certification program will involve the development of a separate program. Unification Framework (2014) clarifies, “The program will focus on candidates who prefer pursuing a career in accountancy but not as qualified CPA” (para.4).

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Stakeholders within the Canadian accounting profession are committed on improving the global profile of their members. In a bid to attain this goal, the new CPA designation will also integrate a post-designation specialty program that will aim at providing the members with an opportunity to progress through their accountancy career path. Some of the proposed “post-designation specialties include public sector accounting, tax, strategic management, and forensic accounting” (Unification Framework, 2014, par. 9). In addition to the above changes, the Canadian accounting profession intends to adopt a common code of conduct.

This goal will be attained through the formulation of a unified regulatory framework that emphasizes the best accounting practices. Among the elements that will be included in the code of conduct entail inspection procedures, disciplinary processes, and codes of conduct. In order to develop a unified designation successfully, “the various professional bodies are expected to merge their operations and governance processes at the national and provincial levels” (Unification Framework, 2014, par. 9). A board of directors will be developed to oversee the merger process.

Impact of unification on students

Students are expected to gain from the adoption of a unified designation. One of the major benefits relates to the establishment of a strong foundation for all the accounting professionals. First, the new designation will ensure that the rights of members within the accounting profession are protected adequately. A single voice under the proposed designation will be highly effective as it represents the interests of over 170,000 members (Unification Framework, 2014). Secondly, the unification will provide diverse career option amongst the members. For example, members intending to improve their competency within the accounting profession will have an opportunity to pursue the proposed post-designation program.

Moreover, the post-certification program will provide members with an opportunity to pursue different fields such as strategic management, auditing, tax, and forensic accounting. This aspect means that attaining the Canadian CPA designation will lead to a remarkable improvement of the members’ expertise, hence their acceptability in different sectors of the global economy.

Alternatively, individual members can decide to pursue a career in accounting without being forced to pursue the post-designation certification program. According to the Chartered Professional Accountants Ontario (2014), the unification will provide members with “equal access to future career and professional development opportunities” (par. 7). Furthermore, the unification process will lead to a significant improvement in the competitiveness of members due to the collaborative efforts amongst the respective professional bodies. Therefore, the unification will mean that students attain a well-publicized designation.

Impact on the Canadian and international accounting world

The unification will influence the Canadian and international accounting world remarkably. First, the cohesion attained under the new CPA designation will be effective in influencing the Canadian legislative and regulatory environment with regard to the accounting profession. Furthermore, the cohesion attained under the unified designation means that it would be possible for the Canadian professional body to influence the global bodies charged with the responsibility of formulating international accounting and financial standards.

One of the proposed changes in the unification of the accounting profession entails the formulation and adoption of common regulatory processes. The unification process intends to achieve this goal through the formulation of extensive code of conduct and ethical standards. Therefore, the Canadian accounting profession will be transformed into one of the most ethical and effective professions across the world.

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Considering the high rate of white-collar crime such as fraud, the unified designation will infuse strong ethical culture amongst its members. Consequently, the likelihood of the Canadian accounting industry gaining trust amongst employers around the world is high. Moreover, the unification of the accounting profession will enable Canada to align with recognized accounting designations. Accordingly, the long-term value of the Canadian accounting profession will be protected. Thus, Canada’s competitive position against global alliances in the accounting filed will improve remarkably (Unification Framework, 2014).

Update on the status of the unification process

All jurisdictions in Canada are committed to adopting the CPA program. However, some jurisdictions have made remarkable steps into the unification process. Examples of jurisdictions that have approved the unification include Quebec, Alberta, British Columbia, Saskatchewan, New Brunswick, Manitoba, Nova Scotia, Newfoundland and Labrador, and Prince Edward Island. In an effort to support the unification process, CPA Canada was established in 2013.

The responsibility of this body is to assist the respective provincial bodies’ progress through the unification process. The determination of the unification process was undertaken through a voting process in which most accountants voted in its favor. Consequently, the unification process currently draws support from all the 40 accounting bodies that represent the Canadian accountants. McFarland (2014) emphasizes that the approval of the merger has set the stage for the stakeholders to formulate the necessary requirements in order to ensure a seamless transition.

Conclusion

The prevailing changes in the global economy are major factors that organizations and professional bodies should assess in order to determine the necessary adjustments. Currently, the accounting profession is undergoing remarkable transformation due to changes in the business environment. Subsequently, the various professional bodies such as accountancy must ensure that they are effective in providing relevant and effective services. Failure to undertake the necessary changes will limit their competitiveness on a global scale.

The decision by the leading accounting bodies in Canada to establish a unified designation will play a crucial role in improving the proposed Chartered Professional Accountant body’s competitiveness on a global scale. First, CPA members will benefit through the attainment of a global profile. Consequently, their employability will improve significantly. Furthermore, the Canadian accounting profession will gain an edge in influencing the formulation of international accounting standards. The merger of the three accounting bodies, which include the Certified General Accountants, Certified Management Accountants [CMAs], and the Chartered Accountants [CAs], is expected to succeed due to the support by the members. Consequently, the Canadian accounting profession will attain long-term success.

References

Chartered Professional Accountants Ontario: Unifying the accounting profession in Ontario. (2014). Web.

McFarland, J. (2014). Canadian accountants merge under CPA designation. Web.

McMurdy, D. (2011). The changing accounting landscape. Web.

Silva-Powell, E. (2014). What does accounting unification mean for students and recent grads? Web.

Unification Framework: A framework for uniting the Canadian accounting profession. (2014). Web.

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