Chartered Professional Acountants Act is similar to RAPA
In considering new legislation, we in Alberta had an excellent starting point: the previous Regulated Accounting Profession Act (RAPA). Since 2001, this act brought governance of the three former accounting designations in Alberta under a single piece of legislation.
The new act is very similar to RAPA. The profession did not seek many substantive changes from RAPA, other than establishing the CPA designation. Like RAPA, the new act states that its primary purpose is to:
- Protect the public;
- Promote the integrity of the accounting profession;
- Promote and increase the competence of registrants; and
- Regulate the conduct of registrants.
In addition, the new act is similar to RAPA in that it will:
- Create the Chartered Professional Accountant (CPA) designation and regulatory body.
- Outline the governance structure of a unified regulatory body for the CPA profession.
- Restrict the use of the CPA designation to registrants.
- Outline “rule-making instruments” for the profession (i.e., regulations, bylaws, directives, resolutions and Rules of Professional Conduct).
- Outline registration criteria for members, candidates, firms, professional corporations and professional service providers, including those from out of province.
- Regulate restricted activities.
- Outline public accountability.
- Outline role and authority of the Practice Review Committee.
- Outline complaint review, discipline and appeal processes and roles and responsibilities.
If you would like to view the legislation that governed the accounting profession prior to July 1, 2015, click here to view the Regulated Accounting Profession Act.
Changes and additions in disciplinary and act breach processes
- To allow incapacity of registrants to be addressed in a dignified manner and not treated or perceived as a disciplinary matter.
- To publish the names of people who breach the Act by improperly using protected designations or perform restricted activities.
- To increase the maximum penalty for performance of restricted activities in breach of the Act from $10,000 to $20,000.
- To publish to the membership and public when registrants are suspended, temporarily suspended, or cancelled, or when they resign.
- To share the results of investigations with regulatory bodies in other provinces or perform joint investigations.
- To confirm that information disclosed during a disciplinary or appeal proceeding cannot be used for any other purpose.
- To increase the maximum amount of fines when there has been a finding of unprofessional conduct from $20,000 to $100,000.
- To have the authority to publish results of all disciplinary hearings, regardless of whether there is a finding of unprofessional conduct.
- To extend the regulatory body’s jurisdiction over former registrants in disciplinary matters from two years to six years.
Other changes and additions:
- To create a Registration Committee for the CPA profession. (Note: RAPA permits a Registration Committee, but the ICAA was the only body to implement such a committee. Both CGA Alberta and CMA Alberta utilized the registrar role solely for this function.) Adding a Registration Committee along with the role of registrar would allow the organization to streamline certain registration processes. It is expected it would deal with applications for reinstatements after an extensive leave from the profession or after cancellation from discipline proceedings.
- To no longer have any exemptions from registering as a firm. In RAPA, there is a provision for exemption when a member was providing very specific activities, if the revenue from those activities was within a specified threshold.
- To identify individuals in the CPA Professional Education Program (often referred to as PEP) as “candidates.”
- To protect the three legacy designations (CA, CMA, CGA) so that they cannot be used by others.
- To broaden when a custodian may be appointed over a practice.
Highlights of New Regulations
Regulations are details that are added to legislation and have the force of law. Unlike pieces of legislation, regulations do not require passage in the Legislative Assembly; approval of regulations is provided through the Lieutenant Governor In Council (i.e., Cabinet).
As with the new act, the Alberta Accountants Unification Agency (now CPA Alberta) provided recommendations to the government on new regulations. Under the act, members of the profession were asked to vote on the new regulations.
On behalf of the profession, the Alberta Accountants Unification Agency proposed the following elements for consideration in the forthcoming new regulations, subject to a member vote in principle:
- Proposing more detail to consider in determining if an applicant is of good character.
- Proposing a 12-month timeline for a candidate to apply for registration after meeting the requirements, in order to ensure education is current.
- Proposing many pathways to registration, such as the PEP program, registration from other provinces/countries, and competence evaluation. Labour mobility requirements are to be specifically addressed.
- Proposing that all members continue to report annually on continuing professional development (CPD) on a three-year rolling cycle. Exemptions from completing CPD would be available for those who are critically ill, inactive or retired.
- Education and experience requirements for registration as a professional accounting firm or professional service provider would be similar to RAPA regulations, but there will be a requirement as to the currency of the education and experience.
- Professional liability insurance limits for LLPs would be $2 million for partnerships with four or fewer CPAs; $2.5 million for larger partnerships
- Use of titles protected which include all legacy titles as well as CPA and Chartered Professional Accountant (including fellow) for restricted use by registrants. Legacy designations are dealt with here as well as in transitional provisions of the Act.
- Rules for use of U.S. CPA (Certified Public Accountant) would be similar to those under RAPA.