Public Accounting Reform In Ontario
The Ontario government has introduced legislation that would, if passed, enable qualified Chartered Accountants, Certified General Accountants and Certified Management Accountants to obtain a licence to practice public accounting.
- Public accounting includes preparing financial statements for the use of third parties, and the giving of opinions on the reliability of the statements.
- Public accounting can be conducted in Ontario only by a licensed provider, whereas anyone can carry on the business of accounting and can offer accounting services.
- In 2002, the Ontario Legislature unanimously enacted Bill 213 to allow Certified General Accountants and Certified Management Accountants to be licensed as public accountants, if they met certain standards of education and competence. Although the bill served as the basis for ongoing reforms, it was never proclaimed.
- In 2003, Ronald Daniels, Dean of the University of Toronto's Faculty of Law, recommended changes to the current regulatory structure for public accounting in Ontario. These recommendations guided the development of the new legislation.
- If passed, the Public Accounting Act, 2004 would modernize the regulation of public accounting and clarify its definition, which would determine what activities require a licence.
- The reconstituted Public Accountants Council (PAC) would implement new regulatory standards that accounting organizations will need to meet in order to grant the licences, harmonize the process with evolving national and international standards and improve transparency, accountability and independence within the field.
- The proposed legislation would allow the three principal accounting bodies -- the Institute of Chartered Accountants of Ontario, the Certified General Accountants of Ontario, and the Society of Management Accountants of Ontario -- to license and regulate individual public accountants once they meet the standards set by the PAC.
- To promote accountability and transparency, the accounting bodies would be required to file annual reports with the government and would be subject to rotating audits by the PAC.
- A majority of the PAC will consist of independent members appointed by the Ontario government, in addition to representatives of the three principal accounting organizations.