Public accountancy

The bill was passed on December 18, 2007 and received royal assent on December 21, 2007. It officially came into force on December 15, 2008. As for the implementing regulations of the Act, including the Regulation respecting the public accountancy permit of the Ordre des comptables en management accrédités, the Regulation concerning compulsory continuing education for Québec certified management accountants who hold a public accountancy permit and the Code of Ethics as amended by the Act, they came into force on June 3, 2010.

Passage of this law ends the monopoly exercised by chartered accountants over public accountancy since 1946. This means that from now on, all CMAs with the qualifications to practice public accountancy can do so, on condition of obtaining a public accountancy permit from the CMA Order.

The definition of public accountancy in the new legislation essentially includes audit and review engagements and reads as follows:

“The practice of public accountancy consists in

(1) expressing an opinion to provide a level of assurance about a financial statement or any part of a financial statement, or about any other information related to the financial statement; this corresponds to an assurance engagement, which comprises the performance of both an audit engagement and a review engagement, as well as the issue of special reports; and

(2) issuing any form of certification, declaration or opinion in respect of information related to a financial statement or to any part of a financial statement, or in respect of the application of specified auditing procedures with respect to financial information, other than financial statements, neither being intended exclusively for internal management purposes.

(3) performing a compilation engagement that is not intended exclusively for internal management purposes.”

A compilation engagement is now reserved for accountants who are members of one of the three professional accounting orders.  However, it is not necessary to hold a public accountancy permit to perform such an engagement.

The law provides a transitional period of 5 years from the date on which it was signed. Thus, CMAs may normally continue the public accountancy activities they were entitled to practice until then for a period of 5 years after December 21, 2007. If you perform or plan to perform audit and/or review engagements and sign them personally, you will have to hold a public accountancy permit as of December 22, 2012 in order to continue or begin to practice in these fields of expertise.

At the end of the 5-year transitional period, all CMAs will be able to perform all acts related to public accountancy on condition that they have obtained a public accountancy permit from the CMA Order. Of course, without having to wait until December 22, 2012, a CMA who meets the additional requirements for practicing public accountancy may apply for such a permit by submitting an Application for Equivalence.

In addition, CMAs holding a public accountancy permit must use the designation “CMA auditor.”

According to the  Regulation respecting the public accountancy permit, CMAs who wish to engage in public accountancy must have both a CMA permit and a public accountancy permit. To obtain the latter, they must satisfy the following requirements in particular: 

(1) have successfully completed the post-certification public accountancy program of the Order or a program that satisfies the criteria provided in the Regulation respecting the public accountancy permit and recognized  by the committee set up by the Board of Directors;

The post-certification program in public accountancy consists of a 12-credit graduate level training program in financial accounting, taxation and assurance, involving a prerequisite of at least 9 credits at the undergraduate level in financial accounting, taxation and assurance.

(2) have met the requirements of the training period in public accountancy or of a training period that satisfies the criteria provided in the Regulation respecting the public accountancy permit and recognized by the committee set up by the Board of Directors;

The training period, of a duration of 24 months, consists of not less than 2,500 hours of professional services rendered to the public, including at least 100 hours in taxation and 1,250 hours of professional services in public accountancy, of which 625 hours in the audit of financial statements and 625 hours in the review of financial statements.

(3) have passed the public accountancy examination of the Order or an examination that satisfies the Regulation respecting the public accountancy permit and recognized by the committee set up by the Board of Directors.

Since the regulations came into force on June 3, 2010, the Order is therefore authorized to issue public accountancy permits.

The Order takes the relevant experience of all members who submit an Application for Equivalence into account, and each application is considered individually by the Public Accountancy Committee, so that skills associated with public accountancy that have already been acquired are recognized.

Holders of a public accountancy permit are required to comply with certain continuing education requirements as defined in the Regulation concerning compulsory continuing education for CMAs who hold a public accountancy permit. Thus, CMA auditors must complete at least 60 hours of public accountancy training out of the 120 hours of training they are required to complete under the Regulation concerning compulsory continuing education for CMAs.

As holder of a public accountancy permit, you must comply with the Regulation respecting the terms of use of the auditor designation by certified management accountants and the Administrative requirements for the practice of public accountancy by certified management accountants and use of the auditor designation.