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."

If you are intending to practice public accounting following your admission to membership in the Institute, please note that a public accounting license is not required in order to be a member of an engagement team, including the quality control reviewer or other expert. However, a member of the Institute is required to have a license issued by the Institute if the member is the lead engagement person responsible for signing a statement or report when:

• The engagement statement or report is issued in Ontario, or the engagement work is primarily performed in Ontario; and
• The statement or report is in respect of
  • An assurance engagement for which a license is required, including an audit or review engagement; or
  • A compilation engagement for which it can reasonably be expected that all or any portion of the compilation or associated materials will be relied upon or used by a third party and which is not accompanied by the prescribed Notice to Reader.

If you intend to be the lead engagement person on any such engagements, you should be aware that you will be required to fulfill prescribed public accounting experience and other requirements as set out in the Institute’s bylaws, which may include the successful writing of a prescribed licensing examination in addition to the CARE, in order to qualify for a public accounting license.  

The Institute currently has the highest number of licensees in Ontario because its professional qualification program meets the standards established by the Public Accountants Council.

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 practice 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.