RESTRICTED
WORLD TRADE S/WPPS/W/7/Add.5
11July1996
ORGANIZATION
(96-2775)
Working Party onProfessional Services Original: English
COMMUNICATION FROM CANADA
Response tothequestionnaire ontheaccountancy sector
Thefollowing communication iscirculated attherequest ofCanada.
________
I. GENERAL
1. What aretheprofessional titlesofaccountants inyourcountry? Arethese professional titles
protected? Please specify how.
There arethreemajor professional accountancy designations inCanada: Chartered Accountant
(CA), Certified Management Accountant (CMA) andCertified General Accountant (CGA).
Each titleisprotected bygovernment legislation ineachprovince/territory.
Inmostprovinces there isalsolegislation governing certified public accountants andthetitle
CPA. Thislegislation restricts theability ofpersons whoarenotmembers oftheassociation
ofcertified public accountants tousethetitle"CPA."
2. Howistheaccountancy sector regulated inyourcountry: bylaw,professional self-regulation,
acombination ofboth?
CharteredAccountantsandCertifiedManagementAccountantsandCertifiedGeneralAccountants
areself-regulated.
Insome Canadian provinces, some "public accounting" isregulated. Inafewoftheprovinces
which regulate "public accounting" (refer toanswer inquestion no.7)those members ofthe
accountancy profession practising public accounting arealsosubject tosome regulation bythe
government body which grants them therighttopractice public accounting.
3. Arethere anyprovisions toprotect company names, whether national orforeign, inyour
country?
AllProvincial jurisdictions havebusiness name registration legislation andcorporations acts
which haveprovisions pertaining totheprotection ofbusiness names andtheprohibition of
theuseofcertain names. Nodistinction ismade between national andforeign names provided
thatthenames areregistered foruseintheprovince concerned.S/WPPS/W/7/Add.5
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4. What aretheprofessional bodies inyourcountry? Aretheyrecognised bylawasaregulatory
ordisciplinary bodyfortheaccountancy profession inyourcountry, orarethese functions
fulfilled byother institutions (please specify)?
There arethree major professional accounting bodies inCanada. Thenational bodies
representing eachofthesegroups are:TheCanadian Institute ofChartered Accountants (CICA),
theSociety ofManagement Accountants ofCanada (SMAC) andtheCertified General
Accountants Association ofCanada (CGA Canada). Each ofthese national bodies have
provincial/territorial affiliate bodies which arerecognized through theirrespective individual
provincial/territorial acts.
5. Howmany members dothese professional bodies have? What istheestimated proportion
ofthose:
CAs CGAs CMAs
-public practice 22,066 4,860 2,700
-industry orcommerce 20,579 12,150 15,120
-public sector 4,101 6,075 5,400
-education * 729 1,080
-retired 3,909 2,700
-unspecified 8,066 486
Total members 58,721 24,300 27,000
*While there areanestimated 453members ineducation, theirprincipal listing maybe
either inindustry/commerce orinthepublic sector. Thus, these453members ineducation
havebeenincluded inoneofthose twocategories setoutabove.
6. What isthescope ofactivities regularly practised byaccountants inyourcountry?
CAsandCGAs provide thefullscope ofactivities listed inthequestionnaire, including business
valuations andforensic accounting. CMAs provide thefollowing services: statutory audits,
auditofmergers, auditofcontributions inkind, public sector audit, other audits, accounting,
taxadvice, taxrepresentation, investment advise, management consulting, management
accounting andmanagement practices.
Auditingandreviewservicesarereservedtocertaindesignationsincertainprovinces(seeanswer
toquestion 7).
Inthefieldoftaxrepresentation, where this"representation" could beregarded aspractising
law,itwould beregulated bythestatutes relating tothepractice oflawbylawyers andwould
berestricted tolawyers. Where this"representation" would notberegarded aspractising law,
anyindividual including accountants might wellbefound providing thisservice.
7. Which ofthese activities areregulated inyourcountry?
Theonly "accounting services" which areregulated inCanada areaudits andreview
engagements. These "accounting services", known aspublic accounting, are"regulated" in
different manners inseven Canadian provinces andunregulated inthree provinces.S/WPPS/W/ 7/Add.5
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InOntario,Quebec,PrinceEdwardIslandandNovaScotia,auditandreviewservicesareusually
performedbyholdersoftheCAdesignation;inBritishColumbia,CAsandCGAsareauthorized
toperform audit andreview services forcompanies; inAlberta andNewfoundland, holders
ofeither theCA,CGA andCMA designation areauthorized toperform audit andreview
services; inSaskatchewan, Manitoba andNewBrunswick there arenoregulations governing
theprovision ofaudit andreview services.
Aswell, public sector auditing would be"regulated" inmostprovinces. Allprovinces have
alegislative auditor (sometimes called theProvincial Auditor). Atthefederal levelthere is
anAuditor General ofCanada. Provincial government departments andmostprovincial Crown
corporations havetheirlegislative auditor astheirauditor. Federal government departments
andmostfederal Crown corporations havetheAuditor General astheirauditor. Theprovincial
legislative auditors andtheAuditor General allhavetheirownenabling legislation. Public
sector entities allowed tochose theirownauditors would berequired tocomply withexisting
legislation intheirjurisdiction. Thus, asindicated above, wherever auditing isregulated (most
provinces), theywould besubject tothatlegislation.
Theremaining categories inthesurvey listing under "Auditing" aremerger auditing, audit
ofcontributions inkindandother special purpose audit engagements. Whether ornotthese
areregulated services would depend upon what isencompassed bythem. Iftheyrefer to
independent examinations ofrecords forthepurpose ofexpressing anopinion astowhether
thefinancial information ispresented fairly, thentheywould fallwithin thedefinition ofpublic
accounting andwould therefore beregulated inmost provinces.
Accounting isnotaregulated activity.
Intheinsolvency fieldtrustees inbankruptcy require alicence fromthefederal government.
Most trustees aremembers ofaself-regulating professional body, theCanadian Insolvency
Practitioners Association (CIPA). Membership isnotmandatory. There are749general
members oftheassociation. (There areonlyabout 15active trustees inbankruptcy whoare
notmembers ofCIPA). Some regulation oftrustees comes fromthefederal government which
grants thetrustee licence.
Inthefieldoftaxrepresentation, where this"representation" could beregarded aspractising
law,itwould beregulated bythestatutes relating tothepractice oflawbylawyers. Thepractice
oflawisregulated inallprovinces.
Inthefieldofinvestment advice personal financial planners areregulated inacouple of
provinces. Stock brokers arealsoregulated byprovincial legislation.
8. Which oftheseactivities arereserved bylawtoaccountants, shared byaccountants withother
professions (please specify), orevenforbidden toaccountants inyourcountry, e.g.byfull
prohibition orbynotallowing cumulation ofcertain activities which areconsidered
incompatible ormutually exclusive?
Inthose provinces which regulate "public accounting" auditing andreview engagements would
bereserved toaccountants permitted toperform public accounting inthatprovince.
"Tax representation" falling within thepractice oflawwould bereserved tolawyers.
Theother fields areoneswhich accountants would share withother professions.S/WPPS/W/7/Add.5
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II. QUALIFICATION REQUIREMENTS
9. What arethequalification requirements forthese activities inyour country interms of
university/higher education degree, practice andprofessional exam? Specify thenumber
ofyears required foreach element, andthedifferences according totheactivities (audit,
insolvency, tax,etc.)covered bythequalification.
Since most ofthelisted activities areopen toanumber ofindividuals withorwithout a
professional designation, ourresponse relates onlytothequalifications ofCAs, CGAs and
CMAs.
Requirements toqualify fortheCAdesignation:
(1) auniversity degree;
(2) specified university courses ortheequivalent;
(3) aprovincial institute student professional program ortheequivalent;
(4) prescribed practical experience; and
(5) apassing grade ontheUniform Final Examination (UFE).
Requirements toqualify fortheCMA designation:
(1) auniversity degree (specified university courses, typically a4yearBachelor of
Commerce withanaccounting major;
(2) passing theEntrance Examination;
(3) completion oftheCMA Professional Program (2years); and,
(4) managerial andoperational work experience concurrent with completion ofthe
Professional Program.
Requirements toqualify fortheCGA designation:
(1) auniversity degree/ college diploma ;
(2) professional courses/exams (3years); and,
(3) minimum 2years acceptable practical experience.
10. Arethere anypre-conditions tomeet tostarttheprofessional education: minimum age,
particular diploma ortitle,prior education, registration withaprofessional body, payment
ofafee,other (please specify)?
Thefollowing relate totheCAdesignation:
- minimum age no
- particular diploma ortitle no
- prior education yes(university degree orequivalent)
- registration withaprofessional body yes
- payment ofafee yes
- other (please specify) proof oflegalname
proof ofemployment (oranoffer of
employment) inanoffice designated as
permitted totrainCAstudents.*
*ThisisnottrueinQuebec where accountancy students areallowed towrite theUniform
Final Examination without having commenced theirpractice experience. (They must,S/WPPS/W/ 7/Add.5
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however, asdoallCAstudents, complete therequired practice experience before they
areawarded theirCAdesignation.)
Thefollowing relate totheCMA designation:
- nominimum age
- auniversity degree (Bachelor degree, accounting major)
- coverage oftheEntrance Exam syllabus (auniversity accounting program contents)
- membership intheSMAC
- payment ofexam fee
Inregard totheCGA designation there arenominimum agerequirements, butauniversity
degree oracollege diploma arerequired tostarttheCGA professional education courses.
11. What arethesubjects tobecovered bytheeducation: accounting, audit, tax,general law,
economics, ethics, information technology, other (please specify)?
Education requirements forCAstudents covers allsubjects included inthesurvey listing.
Twoofthegeneral topic headings intheCAprofession 'sSyllabus forCAstudents are1)
Financial Accounting andReporting and2)Managerial Accounting andFinancial Management.
Itisnotclear whether those aretopics covered under thegeneral heading "accounting" set
outinthesurvey.
CMA education program requirements cover thefollowing subjects: management accounting,
financialaccounting,internalaudit,taxbusinesslaw,economics,informationtechnology,general
business knowledge, management processes, ethics, interpersonal communication and
competency, leadership, international business, andgovernment relations.
CGA education program requirements cover thefollowing subjects: financial accounting,
management accounting, auditing, finance, taxation, law,management information systems,
economics, quantitative methods aswellasethics andinformation technology.
III. TECHNICAL STANDARDS AND ETHICS
12. Inrelation towhich activities donational standards exist(audit, accounting, insolvency,
other)? Please specify theirmain policy objectives.
Accounting andauditing
TheAccounting Standards Board andtheAuditing Standards Board oftheCICA setstandards
inaccounting, auditing andfinancial reporting. These standards arecontained intheCICA
Handbook. CAsarerequired bytheirRules ofProfessional Conduct toadhere tothestandards
setoutintheCICA Handbook.
Aswell,federal financial institution legislation, thefederal corporations act,thecorporations '
actsinmostprovinces andthesecurities legislation inmostprovinces recognize theaccounting
andauditingstandardssetoutintheCICAHandbookastheprimarysourceofgenerallyaccepted
accounting principles andgenerally accepted auditing standards inCanada andrequire adherence
tothestandards setoutintheCICA Handbook.S/WPPS/W/7/Add.5
Page6
Themainpolicy objective oftheaccounting principles istomeettheneeds ofthose preparing
andusing general purpose financial statements. Theobjective offinancial statements isto
communicate information thatisuseful toinvestors, members, contributors, creditors andother
users inmaking theirresource allocation decisions and/or assessing management stewardship.
Theobjective ofanauditoffinancial statements istoexpress anopinion whether thefinancial
statements present fairly, inallmaterial respects, thefinancial position, results ofoperations
andchanges infinancial position inaccordance withgenerally accepted accounting principles,
orinspecialcircumstancesanotherappropriatedisclosedbasisofaccounting.Intheperformance
ofanaudit offinancial statements, theauditor complies withgenerally accepted auditing
standards, which relate totheauditor 'squalifications, theperformance oftheaudit andthe
preparation ofhisorherreport.
Insolvency
Thefederal bankruptcy andinsolvency actsetsoutcertain "standards" which apply ininsolvency
situations. TheSuperintendent inBankruptcy hasauthority toissuedirectives which telltrustees
inbankruptcy howtheymust docertain things. These directives havetheforce oflaw.
Aswell, theCanadian Insolvency Practitioners Association develops andissues standards of
professional practice foritsmembers. Members oftheAssociation maybedisciplined byits
Discipline Committee forfailure toabide bythose standards. Thepenalties range from an
admonishment toexpulsion from membership.
Public Sector Accounting andAuditing Recommendations
ThePublic Sector Accounting andAuditing Board oftheCICA issues Recommendations and
guidance withrespect tomatters ofaccounting andauditing inthepublic sector. These
Recommendations arecontained inthePublic Sector Accounting andAuditing Handbook.
Forthepurpose ofapplying theBoard 'sRecommendations, "public sector" refers tothefederal,
provincial, territorial andlocalgovernment entities, suchasgovernment funds, agencies and
corporations.
Theobjective ofthese recommendations istoimprove andharmonize financial reporting,
accounting andauditing inthepublic sector.
13. Which bodyorinstitution develops thesestandards andmonitors theirimplementation? What
aretheconsequences ofabreach ofthestandards (fortheprofessional, forclients, etc.)?
Accounting andauditing
TheAccounting Standards Board oftheCICA develops theaccounting principles setoutin
theCICA Handbook. TheAuditing Standards Board oftheCICA develops theauditing
standards setoutintheCICA Handbook.
Responsibility formonitoring theimplementation ofthestandards intheCICA Handbook rests
withtheprovincial orfederal regulators responsible forthepieces oflegislation which require
adherence togenerally accepted accounting principles (GAAP) andgenerally accepted auditing
standards (GAAS) assetoutintheCICA Handbook.S/WPPS/W/ 7/Add.5
Page7
Aswell,theProvincial Institutes ofChartered Accountants (PICAs) maintain apractice review
program through which reviews aremade ofthework ofallCAs practising aspublic
accountants. TheRules ofProfessional Conduct ofallPICAs require theirmembers toadhere
tothestandards setoutintheCICA Handbook.
Instances ofCAswhodonotadhere tothestandards intheCICA Handbook maybediscovered
during apractice review ormaybeotherwise brought totheattention ofthePICA. ACA
found tohave"breached" theaccounting orauditing standards intheCICA Handbook may
besubject toprofessional disciplinary proceedings. Thesanctions foraCAforabreach of
theRules ofProfessional Conduct canrange fromareprimand toexpulsion from membership.
Similarly, CGAs whodonotadhere tothestandards intheCICA Handbook maybesubject
toprofessional disciplinary actions. CGAs alsohave:
- provincial reviews ofpractitioners;
- anational codeofethics which requires adherence totheGAAP/GAAS;
- sanctions including expulsion; and,
- additional requirements setbytheAssociation.
Ifaclient has"breached" thestandards, itmaywellhavecommitted abreach oftherequirements
ofoneormorefederalorprovincialacts(corporationslegislation,securitieslegislation,financial
institutions legislation, etc.). Each actsprovides sanctions forbreaches.
Breaches ofCanadian practices andstandards could result inanoteontheclient'sfinancial
statements anddisciplinary action forindividual professionals.
Insolvency
Seetheanswer toquestion 12.
Public Sector Accounting andAuditing Recommendations
The Public Sector Accounting andAuditing Board (PSAAB) oftheCICA issues
Recommendations andguidance withrespect tomatters ofaccounting andauditing inthepublic
sector.
Since 1981, PSAAB hasestablished itselfastheprincipal authority forpublic sector accounting
andauditingstandardseventhoughgovernmentsarenotrequiredtofollowitsrecommendations.
InCanada, mostbusinesses arerequired tocomply withtheaccounting recommendations in
theCICA Handbook under thevarious Actsgoverning incorporation orthrough securities
legislation. Because thefederal andprovincial governments aresovereign, therearenosimilar
requirements forgovernments. While more andmore, public sector auditors andpreparers
looktoPSAAB asthestandard-setter forgovernment accounting andauditing, PSAAB must
encourage voluntary acceptance ofitsrecommendations bybuilding consensus andgeneral
acceptance. Today, thefederal government andmostprovincial governments comply, orare
moving tocomply, withPSAAB 'srecommendations.
International Management Accounting Practices
Statements onInternational Management Accounting Practices (IMAPs) arepublished byIFAC
andCanadian Management Accounting Guidelines arepublished bytheSociety ofManagement
Accountants ofCanada (3of7IMAPs were developed bySMAC).S/WPPS/W/7/Add.5
Page8
14. Aretheinternational standards developed byIFAC (International Education Standards and
Guidelines, International Standards onAuditing) andIASC (International Accounting
Standards) recognised orusedinyourcountry? Ifyes,please explain how. Ifno,please
explain why.
IFAC –International Education Standards andGuidelines
TheIFAC Guidelines areusedtotheextent thattheyarecompared toexisting Canadian
standards.
CICA andtheirprovincial bodies donotapply oruseIFAC education standards asbenchmarks
instudent education because, asaresult ofthecomparison, thePICAs andtheCICA aresatisfied
thatthecurrent Canadian education andadmission standards generally meetorexceed theIFAC
standards.
TheSMAC education program exceeds thestandards setoutbytheIFAC guidelines.
TheCGA education program bothprecedes andexceeds IFAC guidelines.
IFAC –International Standards onAuditing
Anentire section oftheCICA Handbook, section 5101, isdevoted tointernational auditing
guidelines. This section notes that"The CICA supports theobjective ofinternational
harmonization ofauditing practices and,inaccordance withtheConstitution ofIFAC, has
undertaken towork towards theimplementation ofInternational Auditing Guidelines when
andtotheextent possible." International Auditing Guidelines areguidelines developed and
issued byIFAC 'sInternational Auditing Practices Committee (IAPC) onIFAC 'sbehalf.
Thissection alsonotes that"when anInternational Auditing Guideline isissued, theAuditing
Standards Board (AuSB) willcompare ittotheHandbook todetermine whether there areany
significant differences orconflicts. Ifthereisasignificant difference orconflict andthematter
iswithin theauthority oftheAuSB, thematter willbegiven further study; unless there is
fundamental disagreement onthepartoftheAuSB withtheposition taken bytheIAPC, or
there areparticular Canadian circumstances which require adifferent position tobetaken,
consideration willbegiven tofollowing established procedures tomodify theHandbook. Until
suchtimeastheAuSB issues neworrevised Handbook material, theexisting practice inCanada
willprevail."
Thesection further notes thatInternational Auditing Guidelines contain guidance onmatters
which inCanada aredealtwithinprovincial rules ofprofessional conduct.
Thesection setsoutabriefcommentary oneachoftheInternational Auditing Guidelines it
notes that"compliance withInternational Auditing Guidelines doesnotnecessarily result in
compliance withCanadian standards".
IASC –International Accounting Standards
Anentire section oftheCICA Handbook, section 1501, isdevoted tointernational accounting
standards. Thissection notes that"theAccounting Standards Board supports theobjective
oftheinternational harmonization ofaccounting standards" andsetsoutthecomparisonS/WPPS/W/ 7/Add.5
Page9
procedures itfollows when anInternational Accounting Standard isissued. These procedures
agenerally similar tothose setoutabove withrespect tothecomparison ofCanadian auditing
standards toInternational Auditing Guidelines.
Thedecision whether ornotitisappropriate toreport inaccordance withInternational
Accounting Standards islefttothejudgement ofthereporting entity.
Inthefieldofmanagement accounting, international guidelines areconsidered indeveloping
Canadianstandardsandpractices.Usually,Canadianstandardsandpracticeshavebeendeveloped
prior toandaremore specific thantheinternational guidelines.
15. Inrelation towhich activities does aparticular ethical code exist (audit, accounting,
insolvency, other)? Please specify itsmain policy objectives.
Ethicalcodesareapplicabletoallactivitiesaprofessionalaccountant(irrespectiveofdesignation)
isengaged in.Each designated professional issubject toacodeofethics andprofessional
conduct ofitsrespective association.
16. Which bodyorinstitution develops thiscodeandmonitors itsimplementation? What are
theconsequences incaseofbreach oftheethical codebyaprofessional orafirm?
TheRules ofProfessional Conduct applicable toCAsineachprovince aredeveloped andissued
bythePICA inthatprovince. However, theseRules arenowlargely harmonized across Canada
sothatCAsinallprovinces adhere tosimilar rules ofprofessional conduct. Each PICA is
responsible fortheimplementation oftheRules initsprovince andinmonitoring adherence
tothem.
ACAwhoissuspected ofbreaching therules ofprofessional conduct would facethe
investigatory anddisciplinary procedures ofhisorherPICA. Iffollowing these procedures
aCAisfound tohavebreached therules, theCAwould besubject toarange ofsanctions
which mayinclude aninformal admonishment, areprimand, afine, arequirement to
satisfactorily complete certain professional development courses orexaminations, arequirement
tocomplete aperiod ofsupervised practice, asuspension ofthemember 'srights andprivileges,
and/or expulsion from membership intheInstitute.
ThePICAs 'Rules ofProfessional Conduct onlyapply toindividuals atthepresent time.
ForCGAs, thereisanational codeadministered byeachprovincial affiliate body. These bodies
implement andmonitor compliance ofitsrespective members totheexisting national code.
AbreachcouldresultinrevocationoftheCGAdesignation.Thecodeonlyappliestoindividuals.
Anewnational codeisbeing integrated intotheAssociation.
ForCMAs, eachprofessional affiliate ofSMAC self-regulates itscodeofethics andprofessional
conduct. Abreach could result inrevocation oftheCMA designation. Thecodeonlyapplies
toindividuals.
17. Arethere restrictions onmarketing, solicitation, advertising?
ForCAs, some limited restrictions withrespect tomarketing, solicitation andadvertising are
contained inthePICAs 'Rules ofProfessional Conduct.S/WPPS/W/7/Add.5
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Marketing andSolicitation
Rule301oftheOntario Institute 'sRules ofProfessional Conduct provides:
301.1 Obtaining orattracting clients
Amember engaged inthepractice ofpublic accounting shallnotadopt any
method ofobtaining orattracting clients which tends tobring disrepute onthe
profession.
301.2 Solicitation
Amember shallnotdirectly orthrough aparty acting onbehalf ofandwith
theknowledge ofthemember solicit anyprofessional engagement which has
beenentrusted toanother member engaged inthepractice ofpublic accounting
orwhocarries onabusiness orpractice which constitutes arelated function.
Asimilar ruleisinforce intheRules oftheother CAprovincial institutes.
Advertising
Rule217.1 oftheOntario Institute 'sRules ofProfessional Conduct provides:
"Amember mayadvertise, butshallnotdoso,directly orindirectly, inany
manner
(a) which themember knows, orshould know, isfalseormisleading, or
(b) which contravenes professional good tasteorfailstouphold normal
professional courtesy, or
(c) which makes unfavourable reflections onthecompetence orintegrity
oftheprofession oranymember thereof, or
(d) which includes astatement thecontents ofwhich themember cannot
substantiate."
Asimilar ruleisinforce intheRules oftheother CAprovincial institutes.
CMAs mustadvertise inthemarket andsolicit inaccordance withtheirSociety By-Laws, Rules
ofProfessional Conduct and/or Code ofEthics.
CGA members areallowed toadvertise theirservices onlyandarenotpermitted tomake any
promises relating toperformance. Under theAssociation 'sstatement ofethics/principles and
rules ofconduct amember shallnotseektoobtain clients byadvertising orother forms of
solicitation that:
- arefalseordeceptive;
- includes theuseofharassing conduct;
- creates anunjustified expectation offavourable results; and,
- contains self-laudatory statements thatarenotverifiable.S/WPPS/W/ 7/Add.5
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18. Arethere restrictions onfee-setting (minimum/maximum levels imposed, indicative scale,
etc.)?
Norestrictions.
IV. LICENSING REQUIREMENTS AND PROCEDURES
19. Apart fromthequalification requirements, whatarethelicensing requirements forindividuals
inyourcountry?
Thisanswer relates onlytothefields ofaccounting andauditing. Within thefields ofaccounting
andauditing onlythefieldofpublic accounting isregulated bystatute insome provinces.
Intheprovinces which regulate public accounting bystatute onlyafewdosobyrequiring
practitioners tohavealicence.
AllCAswhoarepractising public accounting mustbemembers ofthePICA oftheprovince
inwhich theyarepractising public accounting.
Thisanswer doesnotrelate toanyother fields which mayrequire licences suchasinsolvency
where trustees inbankruptcy must belicensed bythefederal government.
CMAs offering services tothepublic must beregistered aspublic practising members.
Specific questions
Membership ofaprofessional body (inthejurisdiction, elsewhere)
InNewfoundland alicence isnecessary topractice public accounting.
InNova Scotia alicence isnecessary topractice public accounting.
InPEIthefieldofpublic accounting isrestricted bystatute tomembers ofthePEIInstitute
ofChartered Accountants. There isnolicence requirement.
InQuebec thefieldofpublic accounting isrestricted bystatute (with minor exceptions) to
members oftheOrdre descomptables agréés duQuébec. There isnolicence requirement.
InOntario thereisalicensing requirement and,since1962, oneofthepreconditions toobtaining
thelicence hasbeenmembership intheInstitute ofChartered Accountants ofOntario.
InAlberta thefieldofpublic accounting isrestricted bystatute tomembers ofoneofthethree
major accounting bodies (CAs, CGAs andCMAs). There isnolicence requirement but
membership isrequired tousetheCA,CGA andCMA designation.
InBritish Columbia thereisarestriction bystatute withrespect totheauditofpublic companies.
Essentially, onlythemembers oftheCICA andtheBCAssociation ofCGAs areallowed to
carry outthese audits. There isnolicence requirement butmembership isrequired tousethe
CAandCGA designation.S/WPPS/W/7/Add.5
Page12
Registration withtheministry oranyother institution
InNewfoundland aRollofPublic Accountants inNewfoundland andLabrador ismaintained
bytheboard established under thePublic Accountancy Act.
InNova Scotia thePublic Accountants Board maintains arollofthose licensed topractice as
public accountants.
InOntario ThePublic Accountants Council fortheProvince ofOntario established under the
Public Accountancy Actmaintains aRollofPublic Accountants inOntario ofevery person
licensed under theAct.
Subscription toaprofessional liability insurance
Inthethree provinces which require licences forpublic accounting there isnorequirement
inthelegislation forpublic accountants tohaveprofessional liability insurance.
InAlberta,BritishColumbia,Manitoba,NewBrunswick,Newfoundland,NovaScotia,Ontario,
Quebec, andSaskatchewan CAsinpublic practice arerequired bytheirprovincial institutes
tohaveprofessional liability insurance.
CAsinPEIarenotcurrently required tohaveprofessional liability insurance.
CGAs inallprovinces arerequired tocarry professional liability insurance .
CMAs inpublic practice must haveprofessional liability insurance.
Taking ofanoath
There isnooathinNewfoundland.
Theapplication forminNova Scotia forCAsapplying fortheirlicence contains thefollowing
statement. "I________________, theApplicant intheabove Application forlicense DO
SOLEMNLY DECLARE thatthestatements contained herein arecomplete andtrueinevery
respect. AND Ideclare thatIshall carry onpractice asaPublic Accountant, alone orin
partnership withothers, asmyprincipal means oflivelihood. AND Imake thissolemn
declaration conscientiously believing ittobetrueandknowing thatitisofthesame force and
effect asifmade under oath." Theapplicant isrequired tomake thisdeclaration before anotary
public andtosigntheapplication immediately afterthisdeclaration.
Theapplication form inOntario forCAsapplying fortheirlicence contains thefollowing
statement. "Ideclare thatIwillcomply withtheprovisions ofthePublic Accountancy Act,
together withtheregulations including rulesofconduct thereunder." Theapplicant isrequired
tosigntheapplication immediately afterthisdeclaration.
AllCGAs takeanoath.
Absence ofanycriminal record
Ontheapplication forms forCAsseeking alicence inOntario andNova Scotia there isa
question asking iftheapplicant haseverbeenconvicted ofacriminal offence. Iftheapplicant
replies intheaffirmative, thenheorsheisdirected toprovide details.S/WPPS/W/ 7/Add.5
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There isnosimilar question ontheNewfoundland application formforCAsseeking toobtain
apublic accountant 'slicence.
Police enquiry
Apolice check maybemade ifanapplicant indicates thatheorshehashadacriminal conviction
oriftheBoard hasreason toinvestigate. However, there doesnotappear tobeanautomatic
police enquiry forallapplicants.
Minimum age
There isnominimum ageforobtaining alicence inNewfoundland, Nova Scotia orOntario.
20. Arethere anyconditions imposed tobeeligible formembership oftherelevant professional
body(ies)? Please specify.
None other thanthose specified under section II.
Thefollowings pertains toseeking admission toaprovincial institute ofchartered accountants:
Foreign accountants holding designations from certain foreign accounting bodies maybe
exempted from some oralloftherequirements applicable tostudents.
With respect toCAmembership theprovincial institutes decide whowillbeadmitted to
membership. TheInternational Qualifications Appraisal Board (IQAB) reviews thequalification
standards andprocesses offoreign accounting bodies andtomake recommendations onthe
conditionsforadmissiontomembershipinaprovincialinstituteforthemembersofthoseforeign
accounting bodies. IQAB 'srecommendations canvary from noexemptions from the
requirements applicable toCanadian CAstudents toexemptions fromvirtually allqualification
provisions, including theCA'sUniform FinalExamination (UFE). Inthecaseoftheexemption
fromtheUFEprospective members would stillberequired tocomplete some localknowledge
qualifying examinations onCanadian business law,Canadian taxlaw,Canadian accounting
andauditing standards, assetoutintheCICA Handbook, andtheCode ofEthics.
21. Arethere specific licensing requirements forprofessional firms?
Notapplicable.
Only individuals areallowed tobelicensed aspublic accountants inthose provinces which
require licensing.
22. Cananapplication forlicensing befiledatanytimeoftheyearorarethere specific dates
torespect? Howlongdoesittaketocomplete thewhole licensing procedure? Please specify
incaseofdifferences between individuals andfirms.
InNewfoundland anapplication maybefiledatanytimeduring theyearbutthecurrent Public
Accountants Licensing Board onlymeets toofficially consider andapprove ofapplications twice
ayear(inJanuary andJuly).
InNova Scotia anapplication maybefiledatanytimeduring theyearbutthelicensing board
onlymeets quarterly toofficially consider andapprove ofapplications.S/WPPS/W/7/Add.5
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InOntario anapplication maybefiledatanytimeduring theyear. Theapproval process may
beasshort astwoweeks butcanbeconsiderably longer depending upon thefollow-up work
withrespect totheapplication required bythePublic Accountants Council.
Since firms maynotbelicensed aspublic accountants thelastquestion isnotapplicable.
23. Arethere differences interms oflicensing requirements and/or procedures, according to
theactivities covered bythelicence (audit, insolvency, etc.)? Please specify. What kind
ofdocumentation isnecessary/accepted? Aredocuments issued inother countries acceptable?
Please specify.
No.There isonlyonetypeofpublic accounting licence issued ineachoftheprovinces which
require licensing (Newfoundland, Nova Scotia andOntario).
24. What happens when thelicensing conditions arenolonger respected bytheindividual or
thefirm?
Individuals whoareinviolation oftheconditions necessary tomaintain theirlicence orwho
havecommitted anoffence under therelevant legislation aresubject tosanctions from the
licensing bodywhich range uptoandinclude being removed fromtheRollofthose permitted
tofunction aspublic accountants.
Asnoted above, firms arenotpermitted toholdpublic accountancy licences.
V. RECOGNITION OFQUALIFICATIONS
25. Arethereanypossibilitiesfortakingaccountofqualificationsacquiredbyforeignprofessionals
inanother country? Arethere bilateral agreements withother countries inthisrespect?
Thisanswer relates onlytotherecognition ofaforeign applicant 'squalifications byaPICA
forthepurposes oftheapplicant 'sadmission tomembership inthatPICA. Itdoesnotdeal
withthepossibilities ofrecognition oftheforeign applicant 'squalifications forthepurposes
ofalicensing board. Inthisconnection itshould benoted thatthePublic Accountants Council
inOntario doesconsider applications forapermit (itisnotalicence andcontains restrictive
conditions) topractice asapublic accountant inOntario fromlicensed public accountants from
another stateorprovince.
Foradmission offoreign accountants tomembership inaPICA seetheanswer toquestion
20,above.
TheCICA, theAmerican Institute ofCertified Public Accountants (AICPA) andtheNational
Association ofState Boards ofAccountancy (NASBA) signed aPrinciples ofReciprocity
document in1991. However, since theprovincial institutes inCanada andthestateboards
intheUnited States decide onadmission totheCAandCPA designations respectively, the
reciprocity agreements provisions onlyapply inthose provinces andstates which haveaccepted
thePrinciples ofReciprocity document. Most Canadian provinces andapproximately 35U.S.
states haveaccepted itthusfar.Theagreement provides forcertain localknowledge qualifying
examinations aswellassatisfactory experience.
While thisistheonlyreciprocity agreement which theCanadian CAprofession hassigned,
IQAB (seequestion 20,above) hasmade favourable findings withrespect toanumber offoreignS/WPPS/W/ 7/Add.5
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accounting bodies. Their members areexempted from writing theCanadian UFE butthey
must complete certain localknowledge qualifying examinations (seequestion 20,above).
The8foreign accounting bodies forwhich IQAB recommends aUFE exemption are:
- TheInstitute ofChartered Accountants inAustralia
- TheInstitute ofChartered Accountants inEngland andWales
- TheInstitute ofChartered Accountants ofScotland
- TheInstitute ofChartered Accountants inIreland
- TheSouth African Institute ofChartered Accountants
- The54State Boards oftheUnited States
- L'Ordre desExperts Comptables etdesComptables Agréés
- Japanese Institute ofCertified Public Accountants
Aswell,nowwhen IQAB studies foreign accounting designations withaviewtorecommending
exemptions, oneofitsconsiderations iswhether reciprocity exists forCanadian CAsseeking
tomove totheforeign jurisdiction.
ForCMAs, eachapplicant/candidate must complete theCMA Professional Program. While
nopossibilities currently existfortaking account offoreign qualifications, theCMA Board
maybeconsidering some advanced standing procedures inthefuture. TheSMAC haveno
agreements inplace withother countries.
Provincial CGA Associations will review foreign qualifications andmay exempt
applicants/candidates fromcertain CGA academic requirements. CGA Canada isapplying for
reciprocity withtheU.S.International Qualifications Appraisal Board. Reciprocity isaccorded
toallholders oftheCGA designation. TheCGA Education Program iscurrently inplace in
anumber ofuniversities inChina andtheCaribbean.
26. Arethere anyautomatic recognition ormutual recognition agreements between your
professional bodies andtheircounterparts inother countries? Ifso,please specify themain
characteristics ofsuchagreements; ifnot,please explain why.
Refer totheanswer toquestion 25.
27. Where possibilities oftaking account offoreign qualifications exist, isafulllocalexamination
oralocaltraining exceeding 12months required? Please specify. Isalocallicence always
necessary topractice aregulated accountancy activity? Please specify when thisisnotthe
case.
Thefollowing answer relates onlytoCAs.
There aretwodifferent aspects tothisquestion.
Oneaspect istheuseoftheforeign qualifications tobecome amember ofaprovincial institute
ofCAs. Theanswer toquestion 20,above notes thatthere maybeanexemption forsome
oralloftheusualrequirements forCAstudents. Afullexemption would mean thattheapplicant
would notberequired totaketheUniform FinalExamination (UFE) required ofallCAstudents
ortocomplete additional practice experience. However, inthecaseofapartial exemption
based ontheapplicant 'sforeign qualifications theapplicant maystillberequired towrite the
fulllocalexamination (theUFE) orcomplete more than12months oflocalpractice experience.S/WPPS/W/7/Add.5
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Thesecond aspect ofthequestion istheuseoftheforeign qualifications togetalicence in
those provinces which require licences. InNewfoundland andNova Scotia alicence issued
inthatprovince isnecessary topractice asapublic accountant. Asnoted above, thePublic
Accountants Council inOntario doesconsider applications forapermit (itisnotalicence and
contains restrictive conditions) topractice asapublic accountant inOntario fromlicensed public
accountants from another stateorprovince.
Currently, inallthreeprovincial jurisdictions anapplicant wishing apublic accountant 'slicence
might wellapply tothelocalPICA formembership based onhisorherforeign qualifications
andthenapply forthelicence based ontheirmembership inthePICA.
Asspecified inprevious answers, alocal licence isnecessary topractice public accounting
inthose provinces which require alicence forpublic accounting. Insome other provinces,
while alicence isnotnecessary, membership inaspecified accounting body isnecessary.
Insome provinces there arenorestrictions astowhocanoffer andperform anytypes of
accounting andauditing work.
28. Whataretheaccreditation/licensingrequirementsimposedonforeignprofessionalsauthorised
topractice intheirhome country? Maycertain (regulated) activities becarried outonthe
basis ofaforeign licence?
Generally theywould berequired tobecome licensed under therelevant provincial legislation
where suchlegislation exists.
Where membership inaspecified accounting bodyisrequired, theywould berequired tojoin
thespecified body.
There arenoregulated activities which maybecarried outonthebasis ofaforeign licence.
VI. REGULATIONS GOVERNING THE ESTABLISHMENT OFACOMMERCIAL
PRESENCE
29. Arethere anyrestrictions ontheform under which onecanestablish (partnership,
incorporation, other)? Please specify.
Commercial presence must inmost provinces taketheform ofasoleproprietorship or
partnership. Incorporation ispermitted inBritish Columbia, Alberta andNewBrunswick.
InAlberta andNewBrunswick, onlyindividual locally qualified professionals areallowed to
incorporate.
30. Arethere restrictions onforeign direct investment andownership, including restrictions
applying tonotlocally qualified individuals orfirms? Please specify.
Firms must befullyowned bylocally qualified professionals.
31. Isthere arequirement ofaminimum number orpercentage oflocal directors, managers
orstaff(please specify)?
Amajority ofthedirectors ofacompany incorporated forbusiness inBritish Columbia and
atleast50%inAlberta mustberesident Canadians. InBritish Columbia atleastonedirector
must beresident intheprovince.S/WPPS/W/ 7/Add.5
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32. Arethererestrictionsontheabilityoflocallyestablishedfirmstodevelopinternationalrelations
(membershipofaninternationalnetwork,associationwithforeignfirms,etc.)?Pleasespecify.
Norestrictions.
33. Istheuseofinternational orforeign names restricted forfirms?
Norestrictions.
VII. REGULATIONSGOVERNINGTHEENTRYANDTEMPORARYSTAYOFNATURAL
PERSONS FOR THE PURPOSE OFSUPPLYING ACCOUNTANCY SERVICES
34. Istheentry andstayofprofessionals subject tolabour market testsoranyother restrictions?
Please specify.
Asperhaps intended here, wemake adistinction between thisquestion andquestion 35on
thebasis ofpersons/professionals seeking toenter onapermanent ortemporary basis.
Accordingly, anyperson/professional applying toenter Canada toengage inpermanent
employment ortobecome apermanent resident willbesubject toCanadian immigration laws
andregulations. Anumber ofcriteria areinvolved indetermining whether anapplicant will
begranted immigrant status, including, depending onthecircumstances, alabour certification
test.
35. Isthere anyprocedure facilitating thetemporary entry andstayofprofessionals tosupply
accountancy services? Please explain.
Theissue ofCanada 'sNAFTA andGATS commitments withrespect totemporary entry has
nobearing onpermanent employment orpermanent residence.
Canada'scommitmentsundertheGATSadmitsintra-corporatetransferees(executives,managers
andspecialists) foramaximum period ofthree years (without alabour market test)provided
theforeign firmmaintains acommercial presence inCanada. Ourcommitments under the
GATS alsoprovides forthetemporary entry andstayforanumber ofprofessionals, not
including accountants, foraperiod ofupto90daysorthetimenecessary tocomplete the
services contract, whichever isless.
Under theNAFTA temporary entry provisions, accountants aregranted temporary entry to
engage inabusiness activity attheprofessional levelonpresentation ofproof ofcitizenship
ofaParty anddocumentation demonstrating thatthebusiness person willsobeengaged and
describing thepurpose ofentry.
36. Arethere anyrestrictions onhiring oflocalprofessionals byforeign firms andprofessionals?
Please explain.
Norestrictions.S/WPPS/W/7/Add.5
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VIII. NATIONALITY/RESIDENCY REQUIREMENTS
37. Isacondition ofnationality/citizenship imposed topractice certain activities, tostartan
education, toobtain alicence, tobecome member ofaprofessional body, etc.? Please specify.
Noconditions ofnationality/citizenship imposed withrespect tomembership, licensing,
admittance toeducation programs oranyother activity related totheprovision ofaccountancy
services.
38. Isacondition ofestablishment, prior residency orresidency imposed topractice certain
activities, toobtain alicence, tobecome member ofaprofessional body, etc.? Please specify
theconditions andthedefinition ofestablishment, residency, etc.when relevant. Isitpossible
tohaveaprofessional establishment inmore thanonecountry?
Topractice certain activities
Only public accounting isregulated inthefieldofaccounting andauditing. Access topublic
accounting, inthose provinces inwhich itisregulated, iseither bylicence orbyrestricting
ittomembership inaspecified accounting body.
Tostart aneducation
Generally, individuals applying toenteraprovincial institute 'sCAprogram mustberesidents
onthedaythattheapplication ismade. Individuals proceeding through thenormal student
route tobecome aCAaregenerally required tocomplete aperiod ofpractical experience in
astudent training office approved byaprovincial CAinstitute. Obviously, during thetraining
period thestudents would generally beresident (living in)inCanada.
Toobtain alicence
Residency (resident ofCanada/ in-province resident) requirement tobelicensed asanpublic
accountant/certified public accountant inQuebec, Newfoundland andNova Scotia.
Touseadesignation
Residency (living in-province) requirement tobecome amember oftheprovincial CAinstitute
inManitoba, Alberta andBritish Columbia.
Residency requirement tobecome amember ontheCGA provincial association inBritish
Columbia, Newfoundland andAlberta. Theresidency requirement inBritish Columbia will
beeliminated inJanuary 1997.
Residency requirement tobecome amember oftheprovincial CMA association inManitoba.
Establishment
Firms ofaccredited public accountants (engaged inthepractice ofpublic accounting) must
beunder thecharge ofaresident partner whoisamember oftheprovincial accounting institute
(Ontario, Saskatchewan, British Columbia, Newfoundland andYukon).