A Chartered Accountant (CA) is an essential member of your business team. They do the following:
- Keep accurate financial statements
- Calculate and submit GST and employment tax remittance
- Prepare and file corporate taxes
- Determine if the business owner should take a salary or receive it through dividends
- And more.
You need to take your time to find one that is a good fit for you and your company. But where do you start? Here are some tips.
- The new designation for all accountants in Canada is Chartered Professional Account (CPA)
- It takes approximately 6 years to earn the designation
- Firms can specialize according to services or clientele
- A bookkeeper cannot do the same things as a Chartered Account
- Check references, experience, qualifications, background, and fees
- Every province or territory has a registry of the registered CPAs in their jurisdiction.
- Key points
- The different of Chartered Accountant designations are obsolete
- What is a Chartered Accountant?
- The difference between a bookkeeper and a Chartered Professional Accountant
- 5 things to consider when choosing a Chartered Accountant
- Frequently Asked Questions (FAQs)
The different of Chartered Accountant designations are obsolete
To begin with, Chartered Accountant (CA) is a legacy accounting designation. The terms Certified General Accountant (CGA) and Certified Management Accountant (CMA) are also obsolete.
The governing bodies of the three accounting designations agreed to unify. Now they have one single accounting designation in Canada: the Chartered Professional Accountant (CPA).
Accountants with legacy designations need to show their legacy designation after their CPA for approximately 10 years. Though each provincial and territorial jurisdiction is slightly different.
For example, Chartered Accountants would show CPA, CA. Certified Management Accountants would show CPA, CMA. Certified General Accountants would show CPA, CGA.
What is a Chartered Accountant?
It is important to stress that not all accountants are the same. Accountants can be designated accountants. Plus, many accountants only provide services in the area they specialize in, such as tax.
Should you be concerned about this distinction when looking for an accountant? The short answer is no.
In the past three decades, the accounting practice areas for each accounting designation began to blur. Also, the academic and work experience requirements became reasonably similar.
Historically, the Chartered Accountant designation was the most prestigious accounting designation and was the most difficult to earn. You needed a degree with required accounting classes and two to three years of articling experience.
You also needed to pass a difficult exam at the end of your articles to receive your designation. Over time, the CMA and CGA accounting bodies each moved to require:
- A degree with specific accounting courses
- Multiple years of work experience
- Final exams and deliverables before candidates received their designations.
- Annual fee: $199
- Penalty APR: 20.99% on Flexible Payment Option limit and 30% on Due In Full balance
The difference between a bookkeeper and a Chartered Professional Accountant
A bookkeeper is responsible for recording and managing the day-to-day financial transactions of the business. They will record the financial transactions in accounting software through journal entries.
In addition, a bookkeeper will also handle the transactions outside of the accounting software:
- Emailing invoices to clients
- Paying bills
- Tracking down lost receipts
- Calculating payroll
- Ensuring employees receive their paycheques
- Are often responsible for the corporate credit card.
Bookkeepers generate financial statements using accounting software for management to review and use in decision-making. Bookkeepers may have formal education in accounting, such as a Business Diploma or Bachelor’s degree. Still, you don't need a formal education to be a bookkeeper.
A Chartered Professional Accountant (CPA) reviews a client’s bookkeeping to ensure the proper accounting treatment. They adjust journal entries where it was not applied correctly.
A CPA uses this correct information to prepare company documents or filing them with the government. Their duties include:
- Filing a corporation’s income taxes
- Preparing financial statements
- Providing tax strategies and advice
- Completing a financial audit if requested.
As described in more detail below, CPAs receive rigorous accounting training. It takes a CPA candidate at least six years of education and articling experience before earning their CPA designation.
5 things to consider when choosing a Chartered Accountant
Choose an accountant that has earned their CPA or one of the three legacy accounting designations. Earning an accounting designation is not easy.
For a CPA candidate to earn their accounting designation, it will take them four years to earn their degree with required accounting classes, two years of professional experience, and successfully passing the CPA professional program and a common final exam.
If a person wanted to get their CPA in the shortest possible time, it would take them six years to complete if they planned perfectly.
Once a person receives their CPA, they are required to follow prescribed ethical standards and stay up-to-date with the profession. This is done by taking and then affirming they have received a certain number of hours of training each year.
In Alberta, for example, CPAs must take 20 hours of Continuing Professional Development (CPD) annually and 120 hours over a three-year rolling cycle.
You can have confidence in an accountant with many years of experience advising clients with similar business backgrounds and interests. If you work with a less experienced Chartered Accountant, confirm they will be guided or have their work reviewed by a senior CPA.
3. Referrals, references, and online reviews
Ask people in your professional network what CPA or CPA firms they work with and who have had good results. After asking a few people within your professional network, you start to hear the same names. This will give you a short list of CPAs or CPA firms to further explore.
A CPA or CPA firm will be willing to provide you with references from clients they work with. You can also request that references come from clients with similar businesses. Most CPAs and CPA firms will have customer testimonials on their website. These clients will also be their go-to references when needed.
Like other industries, you can see what others say about a CPA or an accounting firm online. To see the online reviews for a CPA or CPA firm, search their names on Google or Yelp. There are other online review sites, but these sites are more likely to have many client reviews for you to evaluate a CPA or CPA firm.
4. Accounting fees
Each accounting firm and CPA will have varying hourly rates or flat fees they charge their clients. The hourly rate they charge will depend on the type of work, the experience of the CPA, the size of the firm, and where they are located.
Labour rates can range between $125 to over $400 an hour. If you are a small business, you need a CPA to file your corporate tax return and prepare your financial statements.
For a straightforward corporate tax return, a business owner can expect to pay anywhere between $1,000 to $1,500. For year-end Notice to Reader (NTR) statements, the cost will range from $1,000 to $5,000, depending on the complexity.
5. Accounting firm size and type
Accounting firms range in size from one CPA to tens of thousands of CPAs. Knowing what type of accounting firm would be best suited for you and your business is important.
Most people have heard of the Big Four accounting firms: KPMG, PwC, Deloitte, and Ernst & Young. Large accounting firms like the Big Four offer every possible accounting service you could need. They also do merger and acquisitions (M&A) services.
Other accounting firms may specialize in a specific offering or to a particular client. This doesn’t necessarily mean they won’t take on certain businesses as clients, but they are targeting specific clients and industries.
For example, some accounting firms may specialize in tax, valuations, assurance, and auditing services. Accounting firms, like entrepreneurs, lawyers, and medical professionals, can also specialize in the clients they serve.
6. Background checks
There have been situations where a person says they are a CPA and are not. If you’re looking to work with a well-known accounting firm or a firm with more than a few CPAs, this will not be a problem to worry about, as each CPA will be vetted by the firm.
If you are considering hiring an accountant, each provincial and territorial CPA organization in Canada, including provide a directory of all registered CPAs in their jurisdiction. We've listed them below.
- British Columbia
- New Brunswick
- Nova Scotia
- Yukon Territory
- Northwest Territories/Nunavut
Frequently Asked Questions (FAQs)
Chartered Accountant (CA) is considered a legacy accounting designation term along with Certified General Accountant (CGA) and Certified Management Accountant at (CMA) designations. These three accounting designations merged into the CPA accounting designation throughout all Canadian provincial and territorial jurisdictions between 2012 and 2019.
Each CPA provincial and territorial regulatory body in Canada including British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, PEI, Newfoundland, Yukon Territory, Northwest Territories/Nunavut, maintain a CPA directory for the public to use.
The hourly or flat rate of a CPA or CPA firm will vary depending on what is being completed, the experience of the CPA, and where they are located. CPA firms will often offer bookkeeping services for as low as $30 an hour; however, the bookkeeper would not be a CPA. Hourly rates for more in-depth services like auditing can be over $400 an hour.
The last publicly available CPA compensation report conducted by CPA Canada was the 2017 CPA Profession Compensation Study that found the average CPA compensation in Canada was approximately $146,000 per annum. This figure varies greatly depending on how many years of experience a CPA has, and what industry and jurisdiction they practice. For example, the average compensation for a CPA in Alberta is approximately $162,000, compared to $110,000 for a CPA practicing in PEI.
Find the best credit card for your business needs!
About The Author: Arthur Dubois
Passionate about personal finance and financial technology, Arthur Dubois is a writer and SEO specialist at Hardbacon. Since his arrival in Canada, he’s built his credit score from nothing.
Arthur invests in the stock market but doesn’t pay any fees because he uses National Bank Direct Brokerage online broker and Wealthsimple’s robo-advisor. He pays for his subscriptions online with his KOHO prepaid card, and uses his Tangerine credit card for most of his in-store purchases. When he buys bitcoins, it’s with the BitBuy online platform. Of course it goes without saying that he uses the Hardbacon app so that he can manage all of his finances from one convenient place.
More posts by Arthur Dubois