As accounting professionals in the United States continue to repair the damage caused by corporate scandals and strive to meet regulations mandated by the Sarbanes-Oxley Act, their neighbors to the north are tackling an entirely different issue — but one that has a major impact on the accounting profession all the same. Should Canada's two main professional accounting bodies merge as one?
In May, the Canadian Institute of Chartered Accountants (CICA) and CMA Canada announced a leadership-approved merger of the two bodies, saying a unified professional accounting group — 100,000 members strong — will eliminate the overlap of the two designations and strengthen the industry in the eyes of the public, employers and clients.
Under the proposed merger, which still must be approved by the members of both organizations in each province, the unified body would have a “three-stream” model: audit and assurance, management and taxation. The body would be governed by CICA's rules of conduct, and the designation for the members would be Chartered Accountant.
“In today's environment, businesses are expected to operate according to the highest standards in the areas of accounting and corporate governance,” said CICA President and CEO David Smith. “Because CAs and CMAs are the leaders in management, audit and assurance, and taxation, it makes sense to combine our expertise to ensure that these high standards continue to be met.”
Regardless of the reasoning given by CICA-CMA leaders, the announcement has sparked an intense debate. Chartered accountants — of which there are currently 68,000 throughout Canada — instantly expressed concern that the merger would dilute the CA designation and balked at the idea of grandfathering the CA credential to 35,000 CMAs.
But Brian Hunt, CEO of the Institute of Chartered Accountants of Ontario, insisted that there will be no lowering of standards. In an interview with CA Magazine in August (“Why Merge?”), Hunt pointed out that “CMAs have repositioned themselves in the management accounting market and are competing with CAs for positions in all but the biggest public firms … They now have the education, training, competencies and standards worthy of comparison.”
In addition, CMAs will not be gifted the CA designation, Hunt said. Those who want to practice in public accounting will be expecting to meet the qualifications necessary to do so.
Explanatory materials from CICA-CMA and town hall meetings throughout the country have addressed these and other concerns, but questions continue to filter in. Tim Forristal, CICA vice-president of education services, told CA Magazine that CAs will not support the merger as long as the CMA designation remains a mystery. But merger or no merger, Forristal said the three-stream model will be implemented “to deal with the narrow funnel and lack of growth in our profession” and “attract a broader spectrum of students.”
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.
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