Public Accounting

Accounting activity falls into two categories: licensed and unlicensed. The unlicensed field encompasses the work of accounting professionals in industry as well as accounting services provided to individuals, businesses, and other organizations. While individual employers may require you to have a professional accounting designation such as CA, CGA, or CMA to do this work, you do not need a special licence under Ontario law.

The other category of accounting work is public accounting. Public accountants prepare financial statements for individuals, businesses, and other organizations and give opinions about the reliability of financial statements. Members of the public, businesses, and investors rely on the opinions of public accountants when they are making important financial decisions. Therefore, the work of public accountants is referred to as "adding credibility for the reliance of third parties." For a definition of public accounting, see the Public Accounting Act, 2004.

Because of the importance of the work done by public accountants in ensuring that Ontario is a secure place to do business, a licence is required to practise public accounting in Ontario.

All Chartered Accountants are trained in public accounting and, in the past, 99% of public accounting licences were given to CAs. However, the Ontario government passed the Public Accounting Act, 2004, which allows members of any of the three principal accounting organizations in Ontario to apply to their regulatory body for a licence to practise public accounting if their regulatory body has been authorized by the Public Accountants Council to grant licences to its members who have met the prescribed qualification standards.

The Public Accounting Act, 2004

The Public Accounting Act, 2004, was passed in June 2004 by the Ontario government. This statute updates and modernizes the older Public Accountancy Act, which was passed in 1950. The purpose of the act is to protect the public by licensing individuals engaged in public accounting.

Under the act, the Public Accountants Council (PAC) is the body responsible for setting regulations for the practise of public accounting. The Council consists of independent members appointed by the Ontario government, along with representatives of the three accounting organizations.

The Council determines the standards that accounting organizations need to meet in order to grant public accounting licences to their members. In this way, the professional qualifications of public accountants practising in Ontario are maintained at a high standard.

The Council is also responsible for prosecuting offences under the act.