Industry approved

The CA profession has changed the practical experience requirement for obtaining the CA designation by allowing CA students to article in industry. Why did it make this monumental change and what  does it mean for trainers, students and potential employers?

By Robert Colapinto
Illustration: Mike Constable

“I’m not going to lie — I do get scared sometimes that because I don’t have audit and assurance experience, I may be lacking some knowledge in regards to the UFE,” says CA student Jessy Brar. “But at the same time, I over-come that by studying more on A and A. I simply have to put more effort into that area because I know I don’t get that experience from work.”

Brar is one of an ever-growing number of CA aspirants immersed in the profession’s non-traditional path to accreditation as a chartered accountant. Work for Brar is a position not at a CA firm, but at Calgary-based oil and gas giant Nexen Inc. The depth competency for her necessary practical experience requirements is not assurance, which prior to September 1, 2007, was an unavoidable core competency to be rigorously instilled within a real-world work environment for all CAs in Canada. Now CA students have the option of not only fulfilling their practical experience requirements in the corporate sector, but also of doing it without that worrying assurance prerequisite. To be sure, all students must still face the daunting assurance-related queries within the UFE — this, we are promised, will never change — but the underpinnings that have so long defined how and where the designation is earned seem forever changed.

So how is this new crop of budding CAs faring in what is a relatively untested new path for the profession? And why have they chosen such a potentially risky route to their designations? For Brar and fellow Nexen student Adrian Hamfelt, it has been full steam ahead since entering the program in 2008. Although Hamfelt has actually chosen assurance as his depth competency, it’s still being earned in industry, and he has not had  a single audit-peer with whom to share his trials and tribulations. “With [at present] 99% of students coming from public practice, you do run the risk of being the odd one out,” he says. “But I’m starting to feel like I’m part of the program, that I’m going through all the rigours, which was the one thing I worried about. I feel like a full-fledged CA student, not some sort of alien outsider from a corporation,” he laughs.

Indeed, Nexen’s Jason Berting, CA, has been sweating bullets to ensure all of Brar and Hamfelt’s depth and breadth requirements are being fully realized. Berting is the company’s training principal for its CA Training Office (CATO), one of the first CA training programs approved for industry. “I know there’s tremendous pressure on our students to make it through our practical experience program, to pass their UFE and to satisfy their individual aspirations as CAs,” he says. “But, wow, I and everyone at Nexen feel a similar pressure, and that’s to make this work at Nexen. It’s very, very new. But I’m convinced we’ve got it covered.”

Prior to 2007, practical experience was recognized only via public practice firms or an approved office of a federal or provincial auditor general. The new corporate sector CATO was anything but a simple add-on to satisfy part of the profession’s longstanding mission to attract the best and brightest. Berting and his team — which included support from the most senior executives at Nexen — worked away at a CATO approval process that was facilitated by the West’s CA School of Business and emphasized exacting and meticulous requirements.

All corporate training office positions must provide not only structured work assignments within a company, but the governing bodies also have to be assured that students are exposed to a work environment driven by the highest levels of ethical behaviour. Competency development is evaluated and documented by the student in their Record of Qualifying Experience and reviewed with qualified mentors who instil values of professional behaviour and professional integrity.

As a training principal — the primary overseer of the CATO program, its mentors and students — Berting filled out a weighty approval submission. Nexen was keen on handpicking the counselling members, who have been shepherding Brar, Hamfelt and a third student through the program. “It’s crucial that we make sure these students experience as much of what the company has to offer as possible, including its culture of pride and honesty,” he says. Berting understands that much of what is new, especially when it comes to competency-based qualification, can be worrying for some in the profession. “So, integrity, ethics and the expected high standard of professionalism are of paramount concern,” he says. “We have to show the CAs out there who emerged from the more familiar accounting firm world that these new CATOs are not diluting the brand. In the end, we expect they’ll enhance it, make it something even more.”

Brar knows full well that she is on the cutting edge of not so much an experiment but a work in progress. “We’re still on that learning curve, and the same can be said for the new program,” she says. “And over time, the program will get better and will be modified to the needs of the students in industry.” Support from Berting, whose door is always open to the students, is much appreciated by these CAs-in-training. And it is an attitude and sentiment that permeates their experience from the ground floor to the executive boardroom: “From managers to mentors to [Berting] to the bigwigs to just people in the elevator,” she says, “it’s all, ‘Hey, good luck. You’re in that program? Good luck.’ It’s really stressful, but the amount of interest and support we get is really unbelievable.”

The idea to funnel CA students through industry dates back to a 2004 CICA document called Strategic Crossroads for the CA Profession, which sought to enhance and expand the profession vis-à-vis the changing roles of CAs in the business world. The notion that a CA’s expectations were limited to only a few, albeit highly skilled and inimitable, positions within business was recognized as no longer representing an accurate picture of the profession. Moreover, it was recognized that the CA designation had a certain resonance — one where accounting and performance measurement skill sets were being recognized as a value-added competency across the entire spectrum of business activity in the corporate sector. From shop floor to oak-panelled boardroom, forward-looking CAs had managed to ease their way into nontraditional positions.

By 2005, two-thirds of the CICA membership was working outside public practice, a percentage that had members pondering how best to take further advantage of the designation that had truly grown into its finely polished marketing PR as the gold standard. If CAs were naturally gravitating to nontraditional positions, was there a more effective way of arming them for the transition from public practice? Indeed, was it possible for aspiring CAs to avoid the stepping-stone of public practice practical experience requirements and earn their designation within industry or government?

For Tim Forristal, CICA’s vice-president of education, the plan to create a new qualification stream was a natural and necessary move. “There was a huge nucleus of CAs doing other than the core audit and assurance,” he says. At the same time, as luck would have it, the legal stars had aligned to pave the way for change. “It all was facilitated or made possible with legislative changes that were being made or planned in Ontario and Quebec to separate licensure and certification. You still have to pass the UFE, which still requires significant knowledge and skill in assurance and financial reporting. But without the separation of requirements for certification and requirements for licensure,” he says, “we would have continued to be obligated to ensure all CAs obtained audit training.”

Only in the West have the laws governing a licence to practice and certification been distinct for some time. Forristal and his colleagues had watched with great interest in 2003 to 2004 when Alberta and BC initiated a pilot project where a small number of people were permitted to train in industry. The only problem was, these graduates would have to forfeit the option of moving their skills across the country — unless they were willing to return to a public accounting firm to earn equivalencies that were on par with and recognized by the rest of the country. The CICA learned a great deal about how best to create today’s CATO from the western pilot project. “But the first thing we learned is you can’t set requirements to become a CA on a provincial basis,” says Forristal. “We really did need to have a national program in place.” To date, all provincial institutes have signed on to the 2007 practical experience requirements for CAs, including the ordre in Quebec, which is ready to go full bore, says Forristal, but is still awaiting regulatory approval.     

This nationally recognized program replaces the Approved Training Offices (ATOs) familiar to all practising CAs. Firms or units of firms that already had functioning ATOs prior to 2007 automatically receive approval for the transition to CATOs. According to Forristal, the only real difference between the two programs is that more stringent competency reporting requirements were instituted to ensure new CATOs within the corpor-ate sector are meeting all the competency needs of their stu-dents. “We’ve not just opened the gates, if you will,” he assures. “We’ve very much said, ‘We want you to offer practical experience within the domain of skills for which a CA is known.”

The new expanded practical experience format requires students to choose one of two areas for their depth competency: assurance or performance measurement and reporting. Those considering a career in public accounting and who want to be eligible for a licence to practice public accounting must choose assurance as their depth area and must complete their practical experience requirements at CA-firm-based CATOs. So Nexen’s  Hamfelt, if he chooses to continue along the assurance path but in public accounting rather than industry, will have to find a placement at an approved firm to beef up his assurance competencies and meet the licensing requirements. Students interested in performance measurement can look to both the CA firms and the corporate sector to fulfill these practical experience requirements. In general, at least one-third of a student’s three-year articling term is spent honing skills in either assurance or performance measurement, and the remaining training is given over to such breadth categories as taxation; governance, strategy and risk management; finance; and management decision-making.

“Every three months, I move departments,” says Melanie Chard, one of six CA students at resource colossus J.D. Irving, Ltd. in Saint John, NB. “I’ve been in tax, treasury, sawmill accounting, internal audit — so I just keep shifting throughout JDI.” With a bachelor of commerce degree from Newfoundland’s Memorial University, Chard had only heard rumours of an alternative path to her CA. “For the most part at university, we’re hardwired to think firm, firm, firm,” she laughs. “So I did an information session with [J.D. Irving] and I had an interview and, boy, did I ask a ton of questions.”

Chard’s decision was complicated by an earlier offer to join Deloitte’s tried-and-true CATO program. Still, she had always known that a firm and a career in audit would never be the perfect fit. By the time she was invited to Saint John for a second face-to-face interview, J.D. Irving was more than prepared to assuage any lingering concerns. “It had the whole program structured and laid out right in front of me,” she remembers. “I could see all the work terms, all the different departments I’d move through, and even the exact dates and competencies that I’d have to hit. And that’s what sold me because I was kind of afraid. It was so new and I had to make sure it would give me what I needed.” After a hard look she made the leap: “‘My goodness,’ I said, ‘this is exactly what I want. Industry and a CA!’”

Employers are also looking for students who are the right fit for the company. Dan Trainor, executive director of the Atlantic School of Chartered Accountancy in Halifax, says, “From talking to some of the employers, there’s a lot of jockeying to attract certain applicants.” The very best, as always, are in demand and they had better see the brass ring within reach. “These applicants have other opportunities with the practice firms and other accounting designations,” he says. “With our new expanded experience model, we’re painting a picture of greater opportunities.”

For the companies, the opportunity to run a CATO offers them the chance to train CAs who may, at the end of their term, stay on with the company. “I’m sure the object for the CAs who set up CATOs for their companies was to create resources for their employers with an overall lower cost at the end of the day,” says Trainor. “But working with them you can just see they are keenly interested in passing on their CA values to upcoming members. They take a real interest and pride in it.”

Chard (and, in fact, all the CA students surveyed here) has every intention of sticking with the company. “It makes such good sense,” she says. “Instead of hiring us from outside after punching time with a CA firm, why not have us grow with the company from the beginning? I’m learning their ways, learning the culture, learning how the business works from the get-go,” she says. “It’s like killing two birds with one stone. This is all about growing with the company and having a long-term relationship from the start.” Indeed, few of these students believe they would have gone the CA route if they had not had the option of training in industry. “If it hadn’t been possible to get a CA through Nexen,” says Hamfelt, “well, I certainly wasn’t considering leaving Nexen to get my CA.”

“My decision to become a CA was based on my goal of ultimately working in a large corporation,” says Rosalynn Lim of Winnipeg’s Great-West Life. With a large number of subsidiaries that report in more than 25 different currencies, this multinational has the potential to provide as wide a depth and breadth of experience and exposure to business finance as any student could hope for. The attraction of not being subjected to hundreds of hours of audit certainly helped tip the balance toward Great-West for Lim. “I think it is a great idea to receive training in industry, since most CAs pursue careers outside of audit,” she says.  

Richard Piticco, director of CA training offices at the Institute of Chartered Accountants of Ontario, admits he would have gone with the nonassurance model were it on offer during his training 12 years ago. Yet he refuses to say one route is any better than the other. “I wouldn’t say it’s more varied,” he says. In public accounting one is exposed to many different clients. In the corporate world, the student deals with one “client” and all its different departments and varied perspectives. “So they’re different perspectives, but I wouldn’t suggest that one’s better than the other,” says Piticco. “It’s simply a different experience.”

But it may well be a better experience for Lim. “I have been given a broad range of responsibilities to challenge myself and to assist me in becoming a successful CA,” she says. “I believe that working in industry provides a more dynamic and relevant real-world work experience because you can obtain more breadth with all the day-to-day challenges we face in the corporation.”

Only a few years ago, the profession faced the challenge of attracting more students to the designation. Now the challenge is to find placements for those seeking this gold standard. One of Piticco’s primary concerns these days is to ensure there is a place to train and work for those who qualify for CA education. The new training model helps relieve some of this strain. As of the fall of 2009, there are 42 nontraditional CATO programs running nationally, including 21 in Ontario, and a projected 60 by the end of the year, according to Piticco. “Certainly right now, given the economic environment, there are more CA students than there are positions in the CA firms,” he says. “So, yes, this does provide other career paths and options for students.”

Yet the final and quite literal test of the new model has yet to be assessed. Will the students in the nontraditional stream — most of whom only experience internal audit practical experience requirements — find themselves unprepared for the assurance-related portions of the UFE?

Brar may be encouraged by the experience of Melissa Lai, who is going through her rotations at the Royal Bank of Canada in Toronto. Lai has already written and passed the UFE. “I’m a really odd case,” she says. “I went to the accounting and financial management program at the University of Waterloo, the stream for people who were more oriented toward industry. This involved four four-month co-op terms with a bank and a reinsurance company during my undergrad,” she says. None of these hours would accrue toward her CA,and little of her work experience was ac-counting related, she says. After earning her bachelor of accounting and financial management, she got her master of ac-counting. It was as she was working on her master’s degree that she also took courses to prepare for the UFE, the cost of which was picked up by the Royal Bank, her future employer. Finally, without having spent a single day working at the Royal Bank, Lai wrote her UFE. “I think I was just lucky,” she says.

Now, UFE in hand, Lai is developing and demonstrating the demands of the prescribed ethics-based pervasive qualities and skills along with her specific competencies at the Royal Bank. Her unusual but successful path may help convince those in the profession who ask questions about what truly concerns students who have chosen the nontraditional stream: passing the UFE.

“I think it is on their minds: yes, a good employer, good experience and good professional development. But is it going to help me through the UFE?” says Forristal. “And now I think they see it is going to — I’m very satisfied. If we can offer people a future that’s grounded in the CA, but goes beyond that, I think that would be attractive to a lot of people. It will truly make their practical experience the difference that makes the difference for the profession.” 

Robert Colapinto is a Toronto writer