Paul Costello, the Association of Chartered Certified Accountants’ Toronto-based head for Canada and the United States.

Two globe spanning accounting bodies with offices in Toronto are upset by the provincial government’s proposed Bill 158, because it contains wording they fear will restrict their ability to practice in Ontario.

The Association of Chartered Certified Accountants (ACCA) and Chartered Institute of Management Accountants (CIMA), both with world headquarters in London, England, are strongly opposed to a clause in Bill 158 which states no corporation can “take or use … alone or in combination with other words or abbreviations” any names or lettering corresponding to the Institute of Chartered Accountants of Ontario (ICAO), Certified General Accountants of Ontario (CGA Ontario), or Certified Management Accountants of Ontario (CMA Ontario).

Violating this provision could draw a stiff fine of up to $10,000.

Under Bill 158, which has only been given first reading, ACCA members could, for instance, be prohibited from displaying their designation since it conflicts with the ICAO. CIMA’s name and letters overlap with CMA Ontario.
Bernie Keim, vice-president of member services and regulatory affairs at CGA Ontario, insists that “being able to defend the designation is really no different than a company defending its name from someone who might be impinging on that name.”

The ACCA and CIMA disagree and believe the wording of the new bill, combined with the harsh prospective penalty, could create undue hardship for their respective members.

“We now have to advise them to be very careful to monitor the circumstances in which they use their designation,” says Paul Costello, the ACCA’s Toronto-based head for Canada and the United States. “This was, I believe, an unintended consequence of the legislation. I don’t think the government understood the impact of the bill’s wording,”

The ACCA has close to 500,000 members and students, including about 2,500 in Canada. Half of the Canada members are based in Ontario, and would therefore be affected.

“This bill says it’s illegal in Canada to show on letterhead the qualifications you have (even though) you are a professional accountant recognized in one of the premier bodies in the world,” argues CIMA North American spokesperson Mahes Wickramasinghe, who is currently working for a Canadian corporation in the Barbados.

“You can couch it however you want,” but the thrust “is discriminatory against immigrants in a country that talks so much about multiculturalism. It essentially relegates professionals who immigrate to Canada into second-class citizens,” charges Wickramasinghe.

CIMA has about 160,000 members and students worldwide, including just over 1,000 in Canada – mostly in Ontario. Both ACCA and CIMA offer multi-year study programs comparable to their Canadian counterparts, with coverage in subject areas such as financial accounting, management accounting, taxation, and auditing. Stringent practical work experience is also required before a designation is conferred.

Brian Leader, chief executive officer of the ICAO in Toronto, insists that under Bill 158 members of foreign accounting bodies “can continue to do all the things they’ve been doing. On their resumes, and in their interviews, they are free to talk about their educational background with a prospective employer. It’s not going to stop them from getting a job.”

Costello disagrees. While in theory, members of the ACCA can perform all the same accounting tasks as they were doing previously, the practical reality of not being able to freely display their designation — and by extension credentials — might prevent some from getting their foot in the door, he says.

Brendan Crawley, a spokesperson for Ontario’s Ministry of the Attorney General told The Bottom Line this legislation is “intended to protect potential consumers of accounting services from confusion about the qualifications of accountants.”

The protection of designation provision in Bill 158 is necessary because it “helps protect the public interest,” echoes Ted Wigdor, CGA Ontario’s vice-president of government and corporate affairs in Toronto.

The public is beset by “a degree of marketplace confusion” amidst a virtual “alphabet soup” of various domestic and foreign-based accounting designations, says Peter Varley, the ICAO’s vice-president of public affairs. With more than 160 professional accounting bodies around the world, “you could have anybody from anywhere put their designation on their card. People have no clue what that means; especially if it has ‘chartered’ and ‘accountant’ (in the name); they start thinking it’s one and the same,” he says.

Not so, responds Costello. Most of the business public, at least, tends to be well informed, and therefore not inclined to “get confused over whether ACCA means that you’re an Ontario CA.” He rejects the contention that the public needs to be protected. “It’s not as if it had become difficult to police the people who were charlatans. There’s never been a case of this. Nobody has been misled.”

In a public letter responding to ACCA concerns about Bill 158, the ICAO says that foreign bodies are “not subject to complying with the same professional and ethical standards as Ontario’s chartered accountants.”

Both the ACCA and CIMA emphatically reject that claim, emphasizing that they also have high professional and ethical standards, with their members subject to potential disciplinary measures.

Wickramasinghe also says the ICAO is preaching “the highest level of hypocrisy” when they talk about different standards and don’t recognize the qualification of members of certain foreign-based accounting organizations when they come to Canada.

Wickramasinghe says a Big Four Canadian firm with an audit client in another country such as India or Pakistan will rely on the work of another CA based in that country. But if the same partner or manager whose work they relied upon abroad immigrates to Canada, their accounting qualifications are considered inadequate here, he adds.

That argument is “mixing apples and oranges,” responds Varley. A foreign-based CA, subject to the regulations of that country’s chartered accounting institute, may be competent to conduct an audit engagement in their home country. But the Canadian CA firm is still responsible for doing “what is necessary to ensure it is reasonable to rely on that work” and might need to take additional steps in order to do so, he says.

However, “it’s an entirely different issue when that individual seeks to come to Canada. There can be no reasonable expectation this person would be familiar with Canadian tax law, accounting and auditing standards, and so on. That person must therefore obtain the necessary knowledge and competencies in those areas,” Varley emphasizes.

One suggested solution is that those with a foreign designation supplement their training by obtaining a Canadian one.

Earning a Canadian designation is “an option,” agrees Costello, who notes that the ACCA has a mutual recognition agreement with CGA Canada that allows each body to accept the others’ members into its study program for fast-track membership. Many ACCAs are also CGAs, which is “a much more widely known brand in Canada” providing “a great deal of advantage to our members,” he says.

“It’s actually a very simple process for them. There’s an online test and course – basically a test of Canadian taxation and law. Once they pass that, the CGA designation is available to them to use,” adds Keim.

But having to obtain a Canadian designation instead of being able to rely solely on their ACCA training and credentials “misses the point,” counters Costello. “The ACCA is a legitimate accounting designation that is recognized throughout the world. Why would we be forbidden to use that designation in Canada when (it) is accepted in 170 countries?
It’s ridiculous we have to almost go back on our identity if we want to practice in Canada,” he says.

Moreover, unlike other professions such as medicine or law, which have developed under a single authoritative entity such as the Ontario Medical Association or The Law Society of Upper Canada, the accounting profession has historically developed in Canada, as in other countries, with “multiple professional bodies,” Costello adds.

For its part, CIMA has a mutual recognition treaty with CMA Canada, and the idea of fast tracking to a Canadian designation with them “is a viable strategy,” acknowledges Wickramasinghe, who has also earned a CA designation from Sri Lanka and a CPA from the United States.

However, this strategy also imposes unnecessary hardship for previously qualified accounting professionals, he argues. Wickramasinghe would like to see a process established whereby foreign professionals are allowed to become familiar with local tax and commercial laws; then have the opportunity to qualify as an accountant in this country without having to enter somebody else’s study program.

“That’s what the government should be doing instead of effectively de-qualifying someone by legislation,” he says.
Another argument in favour of equality is that both domestic and foreign accountants understand and follow the CICA Handbook, believes Wickramasinghe.

“That’s a red herring,” charges Leader. Arguing that a foreign professional is qualified to set up shop in Canada because they follow Canadian accounting standards is “analogous to (having) an electrician who is qualified and has gone through the program do your wiring versus somebody who brings in the handbook on wiring and says ‘I follow the same handbook as the guy who’s qualified.’”

“We’re talking about the competencies of the individuals who practice; not the standards they apply,” adds Leader. Opponents of the contentious protection of designation clause hope its wording can be amended before Bill 158 is passed. “We proposed some amendments to the government, which we believe will be easy to accept if (the) standard is protection of the public interest. But if (the) standard is protecting market share, then we don’t support that,” says Costello.

Leader vigorously rejects any notion that Bill 158 is ultimately about protecting market share. “I can categorically say” chartered accountants are “not afraid of competition.” Costello notes that “we’re not trying to delay this bill or throw it off the rails. We think it’s more than timely to have (modernized) Ontario accounting legislation, and fully support the goals of the government.” He insists the ACCA is “open to a variety of solutions, as long as the principal of fairness and equity is recognized and our members are free to use their designation without capricious prosecutions.”

Costello doesn’t believe the powers contained in Bill 158 should be exercised unless somebody is deliberately trying to mislead the public and falsely promoting themselves with a designation they didn’t have. “That’s the big difference between us and the institute,” he insists, noting that the ICAO prosecuted in 2006 for name infringement, in a case that ultimately resulted in an ACCA member’s acquittal.

One suggestion has been to allow members of foreign bodies to continue to display their designation, but with the country of origin in parenthesis — such as CIMA (UK) — on business cards, to clear up any potential confusion. Wickramasinghe, for one, calls that his “preferred solution.”

When asked if the Ontario government would support such a measure, Crawley simply reiterated that all suggestions will be given “due consideration while the bill is before the House.” He noted the attorney general’s office has “spoken to representatives from both the ACCA and CIMA, and are aware of their concerns.”

Varley is unequivocally opposed to the country in parenthesis compromise. “There are UK chartered accountants, so it doesn’t really alter the equation,” he says.

CGA Ontario’s Keim doesn’t like that idea, either. So long as there is common lettering, “I don’t think the public is going to understand what that means at the end of the day,” he insists.

CMA Ontario was contacted by The Bottom Line but a representative was not available to be interviewed.