The national bodies governing Canada’s three major accounting designations are getting closer to merging, determined to unite the country’s accountants and eliminate the confusion clients have about the profession.
A unified industry, national accounting leaders argue, will create a stronger, more transparent profession that will provide greater value to businesses and better serve the public interest.
“If you’re looking to rationalize the profession and make it more efficient and effective,” says Kevin Dancey, president and CEO of the Toronto-based Canadian Institute of Chartered Accountants, “the only alternative that makes sense is to unify.”
But while the current attempt at a merger is farther along compared with previous attempts, it’s no sure bet. The accounting profession is regulated provincially, and a merger requires agreements among all accounting bodies in each province and territory.
In Quebec, all three organizations – the CICA, the Toronto-based Society of Management Accountants of Canada and the Vancouver-based Certified General Accountants Association of Canada – have agreed to merge; provincial legislation to allow the merger is expected in April.
However, one organization in Alberta and another in Manitoba have pulled out of merger discussions. In Ontario, a key, albeit non-binding vote of chartered accountants this summer is expected to be contentious and is likely to have an influence on the overall merger initiative.
The current push to merge began last year with discussions among the three national accounting bodies, which had resulted in the release of a draft framework in January. In that framework, the three bodies propose uniting Canada’s certified management accountants, certified general accountants and CAs under one umbrella designation: chartered professional accountant. For 10 years after the merger, accountants would identify themselves using both the new designation and their legacy one – e.g., “CPA, CA” or “CPA, CGA.” New entrants into the profession, as graduates of what will be a revamped certification process, would be known as CPAs.
Accounting leaders say a merger, representing some 170,000 accountants in Canada, would give the industry a greater influence on the global stage, allow it to better fend off competing accounting organizations both from abroad and at home and give the industry the opportunity to cut costs and achieve efficiencies.
The selection of “chartered professional accountant” vs “certified public accountant” would allow a merged Canadian accounting profession the flexibility to establish an alliance with either of the two best known international designations – CA and CPA – should one emerge as dominant in future.
“The right strategy for the [merged] accounting body within Canada is to make sure it controls both the CA and CPA [terms],” Dancey says. “And then, depending on how the world unfolds 10, 15, or 20 years down the road, you have control of [those terms].”
Finally, the three national bodies say, a merged accounting industry would make the profession both stronger – the unification framework promises a new certification process at least as rigorous as any existing one – and more transparent, eliminating the confusion of dealing with three designations.
“What we would have in Canada,” says Joy Thomas, CEO of CMA Canada, “would be an emerging breed of world-class professionals who would be able to leverage a good range of expertise across the whole spectrum of accounting.”
The push to merge is earning praise from the financial advisory industry. “Having one clear brand for accountants is a good thing,” says Keith Costello, president and CEO of the Mississauga, Ont.-based Canadian Institute of Financial Planners, “both in terms of public perception and understanding of the service [the public is] getting.”
A merger in the accounting profession also would give a boost to initiatives in the financial services industry to establish one common financial planning standard, Costello adds: “It would give additional credence to what we’re trying to accomplish.”
The national accounting bodies are expecting the provincial associations to decide whether they will be proceeding with mergers in their respective provinces over the next few months. The process, however, is complicated because each association is governed by its own acts and bylaws, with some requiring the approval of its members in order to merge.
So far, only the Chartered Accountants of Alberta and CGA Manitoba have decided to sit out the merger discussions. Alberta’s CMA and CGA organizations have opted to pursue a merger strategy, as have the Manitoba CA and CMA groups.
In Ontario, anecdotal evidence suggests that many provincial CAs do not approve of a merger. In fact, CGA Manitoba cites perceived Ontario CAs’ reluctance as one of the reasons for its decision not to participate in its own provincial merger discussions.
According to CGA Manitoba CEO Grant Christensen’s March 1 blog: “It is clear that a significant majority of [Institute of Chartered Accountants of Ontario] members oppose [a merger] and tensions are rising as a member movement is pushing for a binding vote.”
The CICA, for its part, says it is aware of the contentious of the merger issue in Ontario. “There’s a lot of history among the [governing] bodies in Ontario, and that’s coming to the fore right now,” Dancey says. “The [national] bodies are working on that to make sure the members properly understand what the issues are.”
One vocal critic of the merger says maintaining the divisions among the different types of accounting is in the public interest, arguing against the national organizations’ contention that the various designations are more alike than different. “It’s an extreme of absurdity, as far as I’m concerned,” says Al Rosen, founder of investigative and forensic accounting firm Rosen & Associates Ltd. in Toronto, “to believe that there can be one type of accounting for all the different accounting purposes.”
Despite the critics, national accounting leaders say their industry can’t go back to the status quo – even if some associations back out of the merger – now that Quebec has decided to merge.
“Twenty per cent of the accountants in Canada – Quebec has about 20% – are going to be CPAs come April 2012,” Dancey says. “It’s not like the three bodies can go back to their respective corners, because those corners don’t look exactly the same as they used to.”
© 2012 Investment Executive. All rights reserved.