Thoughts on the proposed accounting profession merger

The country’s profes­sional accounting bodies regulating the use of Chartered Accountant, Certified Management Accountant and Certified General Accountant desig­na­tions are currently deep into merger talks, as you might have heard.

This affects me, of course, but I have a very pliable opinion on the merits of this path. Ultimately I’ve earned the CA desig­nation by passing the UFE in 2006 and meeting the experience requirement in 2008, and nothing will change that whether the letters are CA, CPA (the proposal) or WTF.

The proposal is that the three bodies will merge their opera­tions and we’ll all become CPAs, short for Chartered Profes­sional Accountant, which of course is different from the USA’s Certified Public Accountant, but appar­ently delib­er­ately identical to both confuse people and prevent incursion by that entity into Canada in the future. For the first 10 years we’ll be allowed to use both the new desig­nation and the old one in tandem. I’d become Neil McIntyre, CPA, CA (woo hoo, free credential!) After 10 years we’d be forced to drop our old letters and use only the CPA.

CAs opposed to the change feel like the tradi­tionally strictest require­ments associated with an accounting desig­nation in Canada will be watered down when they are combined with the other two. It’s a valid concern, certainly, but not a deal-breaker in my opinion. It’s not like in 10 years time everyone is going to forget that there are thousands of accredited accoun­tants in the country that qualified under differing regimes. I can foresee a job interview involving a wink, nudge and a question about which regime exactly it was.

I truly do believe that the process to reconcile and merge the quali­fi­cation process can be done well enough to satisfy all stake­holders. I’d personally like to see some form of the case-based exams from the UFE included, as I think they’re a good challenge and better than other forms of testing (e.g. multiple choice). And I don’t think the combined desig­nation will carry less weight than the CA alone. Anecdo­tally, when I worked in public accounting, I knew someone who had a ton of trouble with the UFE, but in all other respects was a fantastic accountant and auditor, and would’ve made a great CA. He just couldn’t crack the exam. I don’t know whether it was the pressure or whether he didn’t test well generally or specif­i­cally with the case format. Conversely, there are some people who have no trouble with it and then have their desig­na­tions revoked for incom­pe­tence or lack of ethics.

I find it inter­esting that one of the purported benefits of the merger is to reduce admin­is­trative costs. The parties point out that having three competing groups, each with provincial fiefdoms results in 40 different bodies, which can be reduced to 13 with the merger. If any were really concerned about the admin­is­trative costs they would’ve elimi­nated the provincial bodies already. (All three are likely propo­nents of a national securities regulator!)

I didn’t set out to write a post in favour of the merger, because as I noted earlier my interest in the debate is minimal. But I may have just solid­ified my support in the process of writing it.

4 thoughts on “Thoughts on the proposed accounting profession merger”

  1. I thought we got to keep the CA indef­i­nitely? Clearly I need to attend that town hall next week. Or maybe I’m thinking of an earlier version of the proposal.

    I have to say, though, “Hardcore Chartered Profes­sional Accoun­tancy” doesn’t seem to have the same ring to it.

    I’d say that 10 years down the line people would hardly care which regime you came from — actual sklls/experience/personality would matter much more though.

  2. I saw somewhere else after I posted this that they’re proposing you can keep the CA indef­i­nitely. I thought origi­nally they were proposing that after 10 years we’d drop it. Can’t keep every­thing straight.

    Yeah that’s a good point about skills, experience and personality.

  3. The current CPA program diagram incor­po­rates PA1 and PA2 from the CGA and the Board Report and perhaps the under­rated Case Exam from the CMA, while having a more flexible final exam at the end.

    I think the real beef that UFE propo­nents have with regards to CGA’s exams, despite having way more technical problem solving and short case questions, is that, even with the AP1 exam in Ontario for public accounting, there’s no equiv­alent to the “comprehensive.”

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