CAREERS IN ACCOUNTING

Presentation – July 20, 2009

• By Gaelen Fisher, B.Comm, MBA, CMA, CGA

– Co-coordinator CPA Prep Program Windsor– Self – employed professional accountant

Outline of Topics

• History of the Accounting Profession

• Licensing legislation – USA and Canada comparison

• Pros and Cons of professional designations

• Advocacy Bodies

• Career Planning

HISTORY OF ACCOUNTING PROFESSION

• 1950 first licensing legislation in Ontario – CPAs, CAs, CGAs and APAs can be licensed.– Established Public Accountants Council – a

body elected by licensed individuals and appointed by the Institute of Chartered Accountants (ICAO)

1962 Mergers

• Merger of CPA and CA organizations in Ontario and other provinces, caused the removal of CPAs as a “qualifying body” for licensing purposes. CPAs were given CAs.

• Concurrently – CGA Ontario was removed as a “qualifying body”. Practicing CGAs were given CAs

• Some 69 CGA students in public practice were ignored. Too bad – so sad

Why?

• Ontario Government felt that their model would be accepted by other Provinces as the licensing model.

• Only Quebec – adopted the licensing model.

Cont….

• Other Provinces decided:– Not to regulate / not to license (the west in

particular AL, SK, MA) – Felt that a professional designation was

sufficient credentials for the public to determine who to hire.

– Or developed a broader based licensing system open to all “authorized” designations (British Columbia)

1978

• Ontario Government appoints the Professional Organizations Committee (POC).– To look at all “professions” and make

recommendations for change

Why?

• Self – governing professions received their mandate by provincial legislation with the power to grant “professional designations”

• Ontario had a basket of various private and public acts and had no clear system for the creation of a statutory regulatory body - “SRB”

Powers of the SRBs • Will vary depending on Act to

“incorporate”

• Members rights also unclear, to:– elect a board of governors– assess dues, – appoint auditors– approve executive compensation– approve standard for the members

POC Recommended

• An Omnibus statute “The Professional Designations Act” applicable to all professions.

• Never passed!

Regina vs Venn - 2000

• David Venn – a CGA is found guilty of practicing without a license in Ontario

• 2002 appealed to Ontario Court of Appeal where decision was upheld – but fine was nominalized and Court ruled “Ontario Public Accounting Legislation is fundamentally flawed”. ICAO controls the PAC and no licenses are granted under 14(2) to other qualified accountants.

Cont…

• Second round of Grandfathering for the 69 CGA students, CAs granted– disciplinary system will weed out

undesirables.

2003

• Conservative Government proposes changes to Public Accountancy Act to enable applicants under 14(2) process.

• Government defeated!

Liberal Government Takes Over

• 2004 – rewrites legislation completely.• To be licensed one must be a member of a:

– Designated / Authorized Licensing body – PAC – changed to 9 public appointees not members of

a designated body and 8 accountants• 4 CAs, 2 CMAs, and 2 CGAs

– PAC to set standards for licensing

• http://www.pas.gov.on.ca/scripts/en/BoardDetails.asp?boardID=141281

Cont….

• To date no CGAs or CMAs have been licensed under this Act.

• CGA Ontario has been in the approval process to become an authorized licensing body for an extended period.

What is Licensed?

• Varies from State to State and Province to Province. Generally – includes all assurance work, audits and reviews where a 3rd party may rely on statements.

• David Venn – guilty because he talked to prospective investors and failed to attach appropriate disclaimers on financial statements. “not for use by 3rd parties”.

New status for Compilations

(3)  A person is not required to be licensed in accordance with this Act for providing services as,

• (a) a bookkeeper or for engaging in bookkeeping, in cost accounting or in the installation of bookkeeping or business systems, solely by virtue of engaging in those activities; or

• (b) a person preparing or offering to prepare financial statements solely as part of tax returns, if the person offers,– (i) no opinion independent of the taxpayer in respect of

the financial statements or in respect of the returns, or

– (ii) no other service requiring a licence under this Act. 2004, c. 8, s. 3 (3).

(2)  The Notice to Reader in English shall use the following language: On the basis of information provided by [management or by proprietor, specify], I have compiled the balance sheet of [name of client] as at [date] and the statements of income, retained earnings and cash flows for the [specify period] then ended.I have not performed an audit or a review engagement in respect of these financial statements and, accordingly, I express no assurance thereon.Readers are cautioned that these statements may not be appropriate for their purposes.[Place] [Printed or signed name of accountant, and designation, if any][Date]O. Reg. 248/07, s. 1 (3).

Regulation 238/05 as amended

Notice re compilations

5.  (1)  Subject to subsection (4), the notice in subsection 2 (3) of the Act shall be comprised of,

(a) a notice that in English is entitled "Notice to Reader" using the language set out in subsection (2) and a conspicuous notice on each page of the compilation or associated materials stating in English "Unaudited — see Notice to Reader"; …

O. Reg. 238/05, s. 5 (5).

• (5)  The Lieutenant Governor in Council shall review any recommendation from the Council in respect of the wording of the notice under this section and shall replace, modify or confirm the wording of the notice within 120 days after receiving the recommendation of the Council.

Old and New systems

• Old system – PAC granted licenses

• New systems – Authorized designated body grants license.

• Reviews for management internal use only gone.

Conclusions

• Designation “certification” and licensing separate

• Membership in a “club” is required in Canada to be licensed – not required in USA.

• Governor of a State grants “CPA license”

Status of “CPAs” in Ontario• 6.  (1)  An authorized designated body may,

subject to any terms and conditions that are prescribed, license any person from another jurisdiction who is permitted to practise as a public accountant in that jurisdiction to practise as a public accountant within Ontario if,

• (a) the person is a member of the designated body; and

• (b) the person meets the qualifications to be licensed as a public accountant established by the designated body. 2004, c. 8, s. 6 (1).

CA system

• Access controlled by employer• Process:

– Qualifying examination -cost $– School of Accountancy – 1 month – cost $– Article for 3 years– Write UFE - $– Membership fee $1K approx / year, licensing

and insurance extra

CGA General Accountant

• Correspondence - course by course program – cost $ 650 per course – e.g. 10 courses X 650 = $7K

• May specialize at 5th level – public accounting option

• Work in approved office and gain recognized experience – 3 years

• Membership cost $775, no public practice registration fees but must take advances auditing and advanced tax $1,300 approx.

CMA – Strategic Planning

• Entrance exam required – cost $• Courses – cost up to $12K depending on

undergrad studies• No courses in Windsor• Work in approved office and gain

recognized experience – 2 – 3 years• Membership cost approx $1K, public

practice registration fees -$50

CPA

• Windsor program www.cpaprepwindsor.com• 5 courses (15 credit hours) :

– US Federal Taxation (Regulations -1)– US Commercial Law (Regulations -2)– Advanced Auditing (US – GAAS)– Advanced Financial Reporting (GAAP) – Business Environment and Concepts (economics, business

organizations and management accounting)

Each course $750 - pay 20 days prior to start date $600 (a 20% discount for registering early)

CPA

• No entrance exams• Assessment by foreign evaluator may be required

– 150 credit hours – college / university level

– Core area – 24 credit hours

Pass exams and get experience after, no concurrent requirements for testing and working.

Possible concerns

• B. Comm. – 120 credit hours / MBA – deemed qualified to write

• CPA Prep course Windsor – 15 credit hours

• Need 150 – short 15 credit hours

• Additional university courses or take CGA PACE level.

CPA PASS RATES

• Good discussion http://www.newaccountantusa.com/newsFeat/pdf/cpavjdzz.pdf

• 2004 http://www.cpa-exam.org/alerts/download/dec_jan05_5.pdf

CPA - New system –2004

• Write one exam at a time – when ready• Obtain 75% to pass• Exam cost – each exam < $200• Nominal application fee varies State to State• Experience requirement – 1 year under the

supervising of a CPA in industry or public accounting.

• Licensing – does have additional requirements, e.g. ethics courses, nominal annual fee, peer review and errors and omissions insurance

2004 Pass Rates

• AUDIT 48.42% 42.99% overall 44.79%

• BEC 44.12% 44.66% overall 44.48%

• FAR 46.60% 43.74% overall 44.88%

• REG 47.47% 42.32% overall 44.23

FLOWTHROUGH

• Flow through measures the candidates completing the programme and obtaining a professional designation– Ask before you enroll in any membership SRB

Are you smarter that a 5th Grader

• Good approach to use for CPA exams

• Write hardest first – if successful continue

• Don’t apply too early – must be ready to write

• Exam windows – none in March and April, not a major concern but be aware

ADVOCACY BODIES

Medicine

• Canadian Medical Association – advocacy

• College of Physicians - SRB

Law

• Canadian Bar Association – advocacy

• Law Society – SRB

Others

• Same structure for architecture, engineering, social work etc…

• Accounting – dual purpose bodies, ICA, SMA, CGAA

• Advocacy – www.canmapp.ca

Career Planning

• Keep a portfolio• Resume always up to date• Network• Get education that does not require dues to

“rent” certification• Remember your environment – Essex

County is a peninsula surrounded by the USA.

Carrers in Accounting

• http://www.cpaprepwindsor.com/upload/cpaprepwindsor/carrers_in_accounting.doc