The CPA Ontario merger will finally be implemented

Interestingly, the merger is taking place as part of the 2017 Ontario Budget, and appears as Schedule 3 of its implementation bill. Apart from a mention in the budget document and a media release from CPA Ontario, I find no mention of it anywhere else. Perhaps that is because the unification agreement adopted three years ago, together with a fair bit of nationwide advertising, has dampened the passions that abounded during the several years before. However, our legislation is finally going through, leaving only the Northwest Territories and Nunavut as the final laggards.

Upon Royal Assent, the Chartered Professional Accountants of Ontario Act, 2017 will contain several provisions that are unique, in comparison to implementation legislation adopted in other jurisdictions:

• The governing Council and officers of the Institute of Chartered Accountants of Ontario become the governing Council and officers of the new CPA Ontario. This is because the ICAO has been operating under the business name of CPA Ontario since the adoption of the unification agreement in 2014.
• CMAs and CGAs will finally become full members of CPA Ontario. Until now, they had only been associate members of the ICAO.
• The Certified Public Accountants Association of Ontario, which had been inadvertently abolished in July 2007 and which had been the ICAO's previous shelter for protecting the initials "CPA" in Ontario, is acknowledged only in a transitional provision that effectively provides for the transfer of the CPAAO's assets and liabilities to CPA Ontario. This effectively bypasses the law relating to escheats, but there is no provision for reviving any of the former provisions to save whatever other actions may have taken in the past ten years.
• The disciplinary provisions extend not just to current members, but also to those whose membership has ceased due to resignation or revocation, and this covers memberships in the predecessor bodies of CPA Ontario. This is subject to a two-year limitation period from the time the event occurred. Although not specifically stated, any consequential court proceedings would be circumscribed by the limitation periods found in the Limitations Act, 2002.
• As of the date of the 2018 Annual General Meeting, the Council will no longer be prevented from passing bylaws that would have the effect of preventing a member of a predecessor body from having "access to any aspect of the accounting profession" that they may have had through such prior membership. I am puzzled as to the rationale of this provision, or what potential effect this might have.

There are some provisions in the bill that I find highly surprising, in that parliamentary draftsmen are normally more diligent in their deliberations and more elegant in their results, and I wonder how much consideration of the wording really happened before this was brought forward:

• There is an unusually expansive definition as to who may not call themselves an accountant. No individual who is not a member of CPA Ontario may "take or use a [protected] designation ... or initials ..., whether alone or combined or intermixed in any manner with any other words or abbreviations."  This appears to have been included because a failed attempt by CGA Ontario to bar the use of the CGMA (Chartered Global Management Accountant) designation in Ontario. It may also explain why "certified public accountant" was not specifically included as a protected designation in this bill in order to rectify the 2007 repeal of the former CPA Act. It still constitutes an extraordinary attempt to block other accounting bodies from establishing a foothold in the Province.
• Interestingly, while the Act "does not affect or interfere with the right of any individual who is not a member of CPA Ontario to practise as an accountant", "[n]othing ... affects or interferes with the right of a person to use any term, title, initials, designation or description identifying himself or herself as an accountant, if the person does not reside, have an office or offer or provide accounting services in Ontario." This is a "cut and paste" from the previous Acts governing the predecessor bodies that was originally intended to prevent turf wars happening amongst themselves, and I wonder why this was preserved in the current bill.
• There is no statutory definition for "accounting services", unlike what has been achieved in other jurisdictions. A definition for "public accounting services" exists in the Public Accounting Act, 2004, but that only covers a portion of what "accounting services" would encompass as a whole. That in itself will lead to problematic litigation in future.

What are "accounting services"?

It might be worthwhile to recap what constitutes "public accounting services" in Ontario. Under the Public Accounting Act, 2004, they constitute:

1. Assurance engagements, including an audit or a review engagement, conducted with respect to the correctness, fairness, completeness or reasonableness of a financial statement or any part of a financial statement or any statement attached to a financial statement, if it can reasonably be expected that the services will be relied upon or used by a third party. Such engagements may or may not include the rendering of an opinion or other statement by the person who is providing the services.
2. Compilation services, if it can reasonably be expected that all or any portion of the compilations or associated materials prepared by the person providing the services will be relied upon or used by a third party, but they do not include compilations that contain a notice in prescribed form that provides that any assurance given by the person is limited to the accuracy of the computations required in order to complete the compilation.

Therefore, "public accounting" in Ontario covers audit, review and compilation engagements, other than compilations accompanied by a prescribed "Notice to Reader". This begs the question as to what scope "accounting services" would cover in a more general sense. An idea as to a more comprehensive definition of "professional accounting" can be found in the BC Act:

47  (1) The practice of professional accounting comprises one or more of the following services:

(a) performing an audit engagement and issuing an auditor's report in accordance with the standards of professional practice published by the Chartered Professional Accountants of Canada, as amended from time to time, or an audit engagement or a report purporting to be performed or issued, as the case may be, in accordance with those standards;

(b) performing any other assurance engagement and issuing an assurance report in accordance with the standards of professional practice published by the Chartered Professional Accountants of Canada, as amended from time to time, or an assurance engagement or a report purporting to be performed or issued, as the case may be, in accordance with those standards;

(c) issuing any form of certification, declaration or opinion with respect to information related to a financial statement or any part of a financial statement, on the application of

(i) financial reporting standards published by the Chartered Professional Accountants of Canada, as amended from time to time, or

(ii) specified auditing procedures in accordance with standards published by the Chartered Professional Accountants of Canada, as amended from time to time.

(2) No person, other than a chartered professional accountant member in good standing, a professional accounting corporation or a registered firm that is authorized by the CPABC to do so, may provide or perform the services referred to in subsection (1).

(3) Subsection (2) does not apply to the following:

(a) a member who is not authorized by the CPABC to provide or perform the services referred to in subsection (1) or a student if the member or student is providing or performing the services referred to in subsection (1) under the direct supervision and control of a chartered professional accountant member in good standing, a professional accounting corporation or a registered firm that is authorized to provide and perform the services referred to in subsection (1);

(b) a person performing a service for academic research or teaching purposes and not for the purpose of providing advice to a particular person;

(c) an employee in relation to services provided to her or his employer or in her or his capacity as an employee of an employer that is not a registered firm;

(d) a person providing advice based directly on a declaration, certification or opinion of a chartered professional accountant member in good standing, a professional accounting corporation or a registered firm that is authorized to provide and perform the services referred to in subsection (1);

(e) a person providing bookkeeping services, consulting services or income tax return preparation and processing services that do not purport to be based on the standards of the Chartered Professional Accountants of Canada;

(f) a person acting pursuant to the authority of any other Act.

Given that BC's Act has been in place for two years already, it is surprising that this wording, with necessary modifications, was not included in the Ontario bill. Perhaps this could be rectified before passage of the bill, but I think that would be highly unlikely given the lack of interest of the current provincial Government in wanting to manage the parliamentary timetable at the Legislative Assembly. In addition, time allocation procedures that are sometimes invoked with respect to Budget bill debates may not allow for discussion as to why certain decisions were taken on the wording, or on why implementation was inordinately delayed. The overarching debate will probably dwell on more high-profile aspects of the Budget, thus distracting attention from this matter. Let's see what develops.