The Accounting ProfessionThe Accounting Profession

Designation Organization Job Emphasis

Chartered Accountant Canadian Institute Public Accounting

(CA) of Chartered Accountants

(CICA)

Certified Management Society of Management Management &

Accountant (CMA) Accountants (SMAC) Private Accounting

Certified General Certified General Private and Public

Accountant Accountants’ Assoication

(CGA) of Canada (CGAAC)

PROFESSIONAL ACCOUNTING DESIGNATIONS

PUBLIC ACCOUNTINGPUBLIC ACCOUNTING An accounting business which offers a An accounting business which offers a

variety of accounting services to other variety of accounting services to other businesses, individuals, and organizations businesses, individuals, and organizations including the government.including the government. AuditingAuditing Income TaxIncome Tax Management Advisory ServicesManagement Advisory Services

Most people working in Public Accounting Most people working in Public Accounting are Chartered Accountants (CA’s).are Chartered Accountants (CA’s).

In Ontario, only CA’s can legally perform In Ontario, only CA’s can legally perform auditsaudits

AuditingAuditing

The principal function of public accountantsThe principal function of public accountantsA careful study of the company’s accounting A careful study of the company’s accounting system and gathering of evidence both from system and gathering of evidence both from within the business and outside sources within the business and outside sources which is used to formulate a professional which is used to formulate a professional opinion about the fairness, accuracy, and opinion about the fairness, accuracy, and reliability of the financial statements of the reliability of the financial statements of the company.company.Public corporations must be audited each Public corporations must be audited each yearyearStatements are then sent to shareholders Statements are then sent to shareholders and creditors. Copies are made available to and creditors. Copies are made available to the publicthe public

Income Tax ServicesIncome Tax Services

Provide tax planning Provide tax planning (to keep taxes (to keep taxes down) and prepare down) and prepare corporate tax corporate tax returnsreturns

Management Advisory ServicesManagement Advisory Services

Acts as a consulting service for various Acts as a consulting service for various purposes:purposes: Conducting a feasibility study of installing orConducting a feasibility study of installing or

upgrading a computer based accounting upgrading a computer based accounting system. system.

Introducing a new product line Introducing a new product line Merging with another companyMerging with another company

Largest Public Accounting FirmsLargest Public Accounting Firms

PRIVATE ACCOUNTINGPRIVATE ACCOUNTING

An accountant in private industry is An accountant in private industry is employed by a single organization.employed by a single organization.

The individual may be hired for a position The individual may be hired for a position in the company and be responsible for:in the company and be responsible for: Financial AccountingFinancial Accounting Internal AuditngInternal Auditng Tax AccountingTax Accounting Cost AccountingCost Accounting

Financial AccountingFinancial Accounting

Develops and communicates information Develops and communicates information for both internal and external use. for both internal and external use.

Follows Generally Accepted Accounting Follows Generally Accepted Accounting Principles (GAAP)Principles (GAAP)

Financial Statements (F/S) are the end Financial Statements (F/S) are the end product of financial accounting.product of financial accounting.

Generally Accepted Accounting Generally Accepted Accounting Principles (GAAP)Principles (GAAP)

Set of rules or standards that Set of rules or standards that accountants must follow when accountants must follow when practicing accounting. All practicing accounting. All businesses and organizations should businesses and organizations should be following these principles.be following these principles.

The regulations are established by The regulations are established by the CICA and recorded/published in the CICA and recorded/published in the CICA Handbook. (Canadian the CICA Handbook. (Canadian Institute of Chartered Accountants)Institute of Chartered Accountants)

GAAP PrinciplesGAAP Principles

The Business Entity ConceptThe Business Entity Concept

The accounting for a business organization The accounting for a business organization must be kept separate from the personal affairs must be kept separate from the personal affairs of its owner, or from any other business or of its owner, or from any other business or organization.organization.

Keep Separate Records

GAAP PrinciplesGAAP Principles

The Continuing Concern ConceptThe Continuing Concern Concept

Assumes that a business willAssumes that a business will continue to operate unless it is continue to operate unless it is known that it will not. known that it will not.

GAAP PrinciplesGAAP Principles

The Principle of ConservatismThe Principle of Conservatism

Accounting for a business should be fair Accounting for a business should be fair and reasonable.and reasonable.

Internal AuditingInternal Auditing

Responsible for evaluating the system ofResponsible for evaluating the system of internal control to ensure that accounting internal control to ensure that accounting reports are reliable, that the company’s reports are reliable, that the company’s resources are safeguarded against theft resources are safeguarded against theft or wasteful use, and policies are followed or wasteful use, and policies are followed consistently by all. consistently by all.

Tax AccountingTax Accounting

Due to the complexity of taxes, manyDue to the complexity of taxes, many companies maintain their own tax companies maintain their own tax departments in addition to using the departments in addition to using the services of a CA (Public) firm. services of a CA (Public) firm.

Cost AccountingCost Accounting

Concerned with collectingConcerned with collecting and interpreting cost data and interpreting cost data of running the business of running the business to make informed to make informed decisions. decisions.