Ontario CAs Welcome New Public Accounting Legislation

McGuinty government meets the test of protecting the public interest

TORONTO: June 9, 2004 – The Institute of Chartered Accountants of Ontario today congratulated Premier Dalton McGuinty, Attorney General Michael Bryant and Parliamentary Assistant to the Attorney General, David Zimmer, (MPP Willowdale) for keeping their promise to create a strong new Public Accounting Act for Ontario.

The new legislation, tabled in the House Tuesday, follows a long and difficult effort spanning two provincial governments* to create a framework that enables other Ontario accounting bodies to practice public accounting alongside Chartered Accountants.

Key features of the new public accounting legislation include:

• A new public accounting qualification and regulatory structure, which incorporates the existing, internationally recognized high standard that CAs are currently required to meet. The standard can only go up;
• A new Public Accountants Council (PAC) to oversee public accounting, comprised of four CAs, two Certified Management Accountants (CMAs), two Certified General Accountants (CGAs) and nine public representatives;
• “Sufficiency tests” for all accounting bodies to ensure they meet the required standard;
• No “grandparenting” of CMAs or CGAs. Only those whose organizations meet the required standard, as determined by the new PAC, will be entitled to practice; and
• Tougher provisions to combat illegal practice (public accounting without a license).

“At issue all along was the question of what standard the other bodies would have to meet before licensing their members to practice,” said Institute President and CEO Brian Hunt. “At the start, the process was heading toward multiple standards for the different bodies, which would see standards drift down to the lowest common denominator and put the public at risk.”

Yet today, Hunt said, the McGuinty government has turned the issue into a win for everyone, creating a new model for public accounting that grants public accounting rights to the other accounting bodies, while requiring them to demonstrate they can meet the current, high and internationally recognized Ontario standard that protects consumers and the public interest, before they can license their members. “The Premier and his team deserve credit for this,” Hunt said.

* see attached chronology of events  

Hunt noted that many people think public accounting doesn’t affect their lives, or our economy – and that some people don’t even know what public accounting is.

“Public accounting is the business of expressing independent assurance on the financial statements and other financial information of companies or enterprises of all sizes, to ensure that the information truly reflects the financial condition of an enterprise,” Hunt explained. “Large and small investors, financial institutions and other third parties then rely on that assurance to make informed investment and lending decisions.

“Many of those decisions involve investments in our RRSP, mutual or pension funds. So public accounting is important to all Ontarians. And now, we can be confident, it will continue to be done the right way.”

  - 30 -

For further information, contact Rick Hall, Acting Director of Media Relations (416) 969-4271