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A summary of current CICA projects and initiatives

CA profession “in a very good place”

Doug Baker almost didn’t get to carry out his two-year term as CICA chair. In 2008 he collapsed at Calgary’s Petroleum Club a few days before a CICA board meeting and was rushed to hospital with a grim prognosis: a tumor in the lining of his brain caused a seizure and required surgery. That successful operation was followed by four others to deal with a stubborn infection and he was on a mobile intravenous unit for much of 2009.

“It has been an interesting time,” says Baker, 57, who expects to have a final surgery to replace part of his skull with an artificial plate after his term as CICA chair expires on September 22. (Bill MacKinnon, CICA vice-chair, takes over as chair.)

	Outgoing CICA chair Doug Baker has played a key role in educating new generations of CAs

The FCA, whose career in the energy sector spans more than 25 years, had a prior wake-up call in 2004, when he was admitted to hospital with chest pains and high blood pressure due to stress and excess weight. The next year, Baker signed up for a 15-day hike to Nepal’s Mt. Everest base camp, itself an impressive 18,000 feet above sea level. “It was a highlight of my life,” he says. “I lost a good 25 pounds before I went, and then I lost another 10 pounds.”

For more than two decades, Baker has played a key role in educating new generations of CAs, first serving as Alberta’s representative to the Board of Examiners for the UFE, then as its chair and, since 2000, as Alberta’s representative to the International Qualifications Appraisal Board. “It was rare for somebody who had a full-time job in industry to be that involved in the profession,” says Steve Glover, FCA, former executive director of the Institute of Chartered Accountants of Alberta, who worked with Baker at the institute and in industry.

Today, Baker serves on seven corporate boards as well as several not-for-profit boards.

What is your outlook for the CA profession?
I think we are in a very good place. The core of the CA profession is our members and it will continue to be strong as long as we continue to hire top-notch students, give them excellent training and provide a strong evaluation system that has very high standards.

In your term as CICA chair, you’ve put in place a program to get more CAs trained outside of accounting firms. Why?
Historically, entrance to the profession had the potential for an hourglass effect. The narrowing in the hourglass has been the number of training positions public practice firms provide. The number of students we can allow into our system to potentially write the UFE and become CAs was not really controlled by the profession but by the public practice firms. We want to see more companies sign on to train students.

So training students in industry widens the waist of the hourglass or student bottleneck?
Yes. I think it’s important to widen it and the profession has recognized that. While the experience you got as an auditor at KPMG or Deloitte or E&Y, for example, is very good, CA firms are not the only places that can teach the needed skills. A company such as BCE, for example, has 150 CAs across the country. Its finance group has a sufficient number of CAs to provide that same mentoring, leadership and training necessary to deliver those skills within a CA training program.

What are the numbers like right now for CAs coming in and available training positions?
Last year about 3,100 students passed the UFE. Outside of the traditional audit function, we probably currently have 200 to 300 training positions. We should ultimately have 1,000 to 1,200 of our UFE graduates from nontraditional sources. Maybe a third (of the total). I hope we can get there within five years. I wouldn’t be upset if we do better. To me this is kind of a minimum.

Where are Canadian corporations getting their finance staff from currently?
In many cases large firms hire people directly out of university. They want a training program for their students, so they turn to the CMA or CGA programs. Our job is to make sure we have a program that meets their needs so corporate employers will want and prefer to train CAs.

When you look outside the profession, do CAs comprise enough of the market compared to CMAs and CGAs?
I don’t think CAs should have every accounting job in the market. A big issue now is the market for audit and review services, which is opening in Ontario and Quebec for the other bodies. In other provinces, non-CAs have been able to do audits for years and CAs have not lost any market share. I don’t see an immediate threat or concern there. I’m less worried about CMAs and CGAs for nonpublic practice positions. In this space, we also compete with MBAs, CFAs and international designations. CAs have a solid presence among the senior financial positions in the ROB 1000 companies that are significant influencers of our economy and financial markets. While our position is strong, I would like to see even more presence in these companies and throughout the economy. I think it’s good for capital markets that we have a known, consistent product with expertise and ability in key positions. One thing I know is if we don’t supply enough CAs, those positions will get filled by somebody.

Somebody else?
Yes. That is my worry. If you look at the numbers of those other organizations, they are all growing. CFAs are growing tremendously. Even CMAs and CGAs in many areas have more students than we do. That whole population of these other brands will fill positions if we don’t take the bull by the horns.

The CA profession is not growing as fast as they are?
We are not. At this point we are still dominating the senior positions in finance and accounting with a strong presence in the executive suite and that is where we want to be. We want to make sure that we don’t become a small and very elite senior group that starts to lose some relevance.

What other challenges and opportunities do you see for the profession?
Internally, we are just setting up the training model for CA students in industry outside of the normal audit stream. As a profession, it is incredibly important to get that right and to move forcefully. We must constantly monitor and evaluate what we are doing to ensure it is attractive to business and nonbusiness students, mid-career changers and immigrants as well as being attractive, competitive and efficient for employers that train new CAs. If we can provide greater and varied opportunities for CAs to get the training they need, it will help with some of those issues.

Second, the world is going global. Over time there will be more harmonization of accounting rules and audit and business practices. You see this with IFRS and new independent audit standards. What this says to me is there will be less of a need for separate professional accounting designations country to country. Given our relative small size, Canadian CAs are incredibly well-respected around the world. We are often told that Canadian CAs punch above our weight class on the international stage. We really need to focus on where we are going to fit in a world that is converging to a greater degree than in the past.

Paul Brent

 

CA qualification

Updated practical experience requirements increase flexibility for employers, students

Two modifications have been made to the profession’s practical experience requirements for 2010. These modifications respond to input from CA firms and other business and government organizations approved to train CA students.   

Depth and breadth requirements have been modified to allow employers more flexibility in creating CA training positions. Employers can now seek approval for positions offering depth in any of the six CA competency areas: assurance; performance measurement and reporting; taxation; governance, strategy and risk management; management decision-making; and finance.  

Descriptions of specific competencies have been clarified to better reflect the competencies expected of the entry-level CA. These clarifications have required corresponding updates to the Record of CA Qualifying Experience, which all CA students are required to maintain.

Details of these modifications can be found at www.catoadvantage.ca, or speak with your regional CATO liaison officer to understand the impact on existing and prospective CA training programs.

 

CAs sponsor Paul Volker presentation

On October 6, the CA profession will be a proud sponsor of The Canadian Economic Forum — A Conversation with Paul Volker at the Metro Toronto Convention Centre in Toronto. Volker was the chairman of the US Federal Reserve under presidents Jimmy Carter and Ronald Reagan from August 1979 to August 1987. Since February 2009, he has been chairman of the Economic Recovery Advisory Board under President Barack Obama. “Sponsoring significant events such as this helps foster international dialogue on global economic issues,” says Kevin Dancey, CICA president and CEO.

Details about this important upcoming event can be found on CICA’s website www.cica.ca.

 

CICA publication highlights importance of diversity

A new publication by the Canadian Institute of Chartered Accountants (CICA) is helping boards of directors address the importance of diversity within their organizations.

The CICA’s Risk Oversight and Governance Board commissioned the special publication titled “Diversity Briefing: Questions for Directors to Ask.” The document uses real-world statistics and examples to clearly draw the link be-tween diversity and business success.  

Boards set the tone from the top and should monitor the impact of diversity initiatives on business goals such as recruiting and retaining top talent, improving performance and capturing market share.   

The CICA publication was written by three authors from Ernst & Young: Fiona Macfarlane, managing partner, people; Diane Sinhuber, partner and Canadian leader, banking and capital markets; and Tanya Khan, partner, advisory services.  

“The concept of diversity goes beyond race and gender to encompass age, culture, personality, skill, training, educational background and life experience,” notes Macfarlane. “The influence of a variety of perspectives can contribute to flexibility and creativity within organizations. Companies that embrace diversity may find it enhances profitability and performance.”

The publication can be found online at www.rogb.ca.

 

Learning the new Canadian auditing standards

The CICA has developed an introductory course to help auditors of financial statements and others understand the new Canadian auditing standards (CAS). “Everyone who audits financial statements and students of auditing will require an understanding of the new standards,” says Gord Beal, CA, who leads the CICA’s Canadian Standards in Transition project. The new online course, called Introduction to New Auditing Standards in Canada, is an effective first step in the learning process.”

Participants are guided through a sample audit, learning practical information about the various phases of the audit process. A panel of experts, including Cindy Kottoor of Neverest Inc.; Katherine Schamerhorn, principal with Grant Thornton LLP; and Eric Turner, principal, CICA Assurance, provides insights into how the standards are used.

The course is delivered in modules, making it convenient for participants to incorporate it into their schedules. The course, including exercises and final quiz, requires approximately two hours to complete. It qualifies for verifiable CPD credits for CAs.

The course integrates with a resource called the CAS Support Tool, which the CICA launched in the spring. It is an interactive resource that provides a single point of entry to information auditors will need during the four phases of the audit process: pre-audit considerations, audit planning, performing the audit and audit conclusions and reporting.

The course and the support tool are online and offered free of charge. CAS applies to audits of financial statements for all types of organizations — large and small, public and private companies across all industries, not-for-profit organizations and governments.

The suite of 36 CASs fundamentally mirrors the requirements of the International Standards on Auditing. They are effective in Canada for periods ending on or after December 14, 2010.

CAS is principles-based and many of the new standards are consistent with current Canadian auditing practice. However, Beal says, “Some represent significant change and auditors must prepare accordingly.”

Introduction to New Auditing Standards in Canada, the CAS Support Tool and other useful resources and information can be found on the CICA’s CAS website at www.cica.ca/CAS.

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