Chartered Accountants and the Battle of Manitoba

There is a battle underway for the hearts and minds of Canada’s professional accountants, and the battle is getting uncharacteristically ugly for the normally image-conscious practitioners.

The Skinny.

In early 2011 The Certified Management Accountants of Manitoba (CMA Manitoba) and the Institute of Chartered Accountants of Manitoba (ICAM) announced that they were joining the Canada-wide negotiation to merge their professional associations. The plan is to create a new professional accounting designation called “Chartered Professional Accountant” (CPA), and create a new professional association (CPA Canada) across the country. The accounting professions are provincially regulated, so the work of negotiating the union would have to occur separately in every province.

The merger process can so far claim both setbacks and victories…Certified General Accountants (CGA) in Manitoba and PEI have decided not to participate; the Alberta CAs pulled out of discussions in February 2012, and the Quebec professions have reached an agreement and are merging in April 2012.

Why So Grumpy?

While it takes two to tango, we can almost certainly say that ICAM is at the heart of this battle in Manitoba. There are a lot of issues for Manitoba’s CAs, but it comes down to three:

  1. The underlying reasons for the merger are not well substantiated
  2. (whisper, please) The assumption that all accounting designations are equal is not altogether accepted by all CAs
  3. ICAM is lobbying its members to accept the merger

Point 1 has its roots in point 3, and point 2 is something that no one is talking about because it would drive a spike through the heart of the merger discussions.

Reasons for the Merger. ICAM/CMA-MB’s webcast presents a good summary of their position on the merger and the reasons to support it. Ultimately those reasons need to be tested, discussed and agreed upon by accountants notorious for their detail-oriented and unrepentant skepticism.

Ironically the best analysis of the pro-merger position comes from the Manitoba CGA Association, who has decided to stay out of the merger talks. While the CEO is no doubt defending the decision to stay out of the merger, his June, September, October, and January articles expose problems that merger supporters have failed to address.

All Designations are Equal. One of the core principles of the merger is that all accounting professions are equal. It is an assumption that does not sit well with all CAs.

Right or wrong, many CAs see themselves as the accounting ‘alpha-dogs’. This belief comes from their long history of audit rights in Canada; involved professional training and experience requirements; a legislated role in accounting standard setting in Canada, and their opinion of themselves as the marquis accounting brand in the country.

Given that this new breed of accountants will be required to use the new designation followed by the legacy designation for a period of 10 years after the merger (“CPA-CA”, “CPA-CMA”, etc), the CGA Association’s concern is that CAs, being well identifiable under the new tagging system and being more plentiful, will dominate board elections and have excessive influence when new training and professional standards are set. It appears that CGAs understand the CA ‘alpha-dog’ mentality well.

Lobby vs. Discuss. ICAM has decided to support and promote the idea of a merger, which has created the perception that they want the merger to go ahead regardless of members’ opinions. While the recent webcast did a good job explaining their position, it did little to assuage those skeptical accountants.

ICAM held a series of town halls, has committed to a vote, and nationally CPA Canada has an online forum for members. The town halls were poorly attended and ICAM has interpreted the opinions raised there as being non-representative of general opinion, and though ICAM has committed to a vote it has determined that the vote will not be binding. In addition, the national forum is not well moderated by CPA Canada and unprofessional comments have been allowed to stand.

Justifiably or not, the resulting impression by members is that the pro-merger side isn’t interested in members’ opinions, thank-you-very-much, and many members view ICAM’s claims of extensive consultation as being disingenuous.

Look East.

In reality, because of its importance to the overall economy, the merger decision made in Ontario will have a domino effect in other provinces. Ontario, though under much economic pressure, is still an economic giant in Canada and their decisions in this arena matter (and note that in power-house-Alberta, Canada’s new economic darling, the CAs have pulled out of the merger discussions). The ICAO (Institute of CAs of Ontario) had a near revolt on its hands when it announced that its Board will make the final merger decision, not the members. The ICAO has since agreed to hold a vote of members.

Whether the merger succeeds or not, what appears to be missing is a more balance approach by CAs’ governing bodies, and that does not bode well for the approach that a merged profession would take on future issues. Ironically, the CGA’s crucial role in providing a more balanced view of the merger is a product of the diversity that this merger risks eliminating.

See the follow-up post to this story here.

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