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How to find a good accountant

With the increasing size and complexity of Canada's tax code and accounting standards' manuals, it's almost impossible for ordinary Canadians to stay abreast of the rules that underpin their financial lives.

While almost half of all Canadians still manage to fill out their tax returns themselves, there's no guarantee they do so in a way that minimizes the tax they pay. As a result, more and more of us use accountants to help out.

But finding a good accountant is easier said than done. A good one can cost a fortune -- ranging from $30 to $400 an hour -- and there are so many designations, it's hard to figure out who specializes in what. And because of the complex work accountants do, it's hard for a non-professional to evaluate their performance. That means learning how to choose the right person is crucial.

The designation game
Articles like this one typically advise readers to hire an accountant who has a professional certification from one of the country's three main professional accounting bodies. However, designations don't tell the whole story.

The country's three professional accounting bodies -- the Canadian Institute of Chartered Accountants, the Society of Certified Management Accountants of Canada and the Certified General Accountants Association of Canada -- are in a never-ending turf war, often trying to be all things to all people.

The good news is that to be a member of any one of the three professional bodies, you need at least one university degree, including numerous accounting courses, and to have completed rigorous professional exams. Tax training is also typically included. But each organization interprets the capabilities and competencies of its members broadly, so the qualifications you seek will depend on what you want your accountant to accomplish.

Chartered Accountants (CAs)
As a group, chartered accountants are arguably the best trained of all the accounting professionals. Although almost any accountant or bookkeeper can prepare a set of financial statements for an individual or small business, CAs have traditionally been the only accountants who are allowed to audit and sign those statements, certifying that they have been prepared in accordance with Generally Accepted Accounting Principals (GAAP). But in recent years, certain provincial bodies, notably Alberta, have given greater flexibility to CMAs and CGAs to audit financial statements, the vast majority continue to be handled by CAs. CAs also develop the nation's generally accepted accounting and auditing standards.

That said, although all of Canada's CAs have completed an apprenticeship in public practice, only about 40 percent of them work with the public; the rest work either in the private sector, government or education. Because of their training, CAs are, as a rule, the most expensive of all accountants. If you are thinking about hiring a CA, you should make sure he has a lot of recent experience dealing with the public, especially with smaller accounts.

Certified Management Accountants (CMAs)
Canada's 37,000 certified management accountants generally work within large organizations such as private businesses, government departments and not-for-profit groups. They monitor, interpret and communicate operating results, evaluate performance, control operations and make decisions about the strategic direction of an organization.

While CMAs don't generally work in private practice, most of them should have the basic training to help a self-employed person or small business owner handle his books, prepare his returns and complete regulatory filings.

As with CAs, don't hire a CMA for her designation alone. Make sure she has experience working with people like you, and try to get at least three references.

Certified General Accountants (CGAs)
Certified General Accountants are a bit of a mixed bag, with many working in business, education and government. That said, a significant portion of Canada's CGAs work with the public, mostly with individuals, the self-employed and small business owners.

Ask your friends, get referrals
For most Canadians, an accountant's reputation and the rapport you have with him are far more important to establishing a beneficial relationship than a professional designation.

Even the best-trained accountant can't perform well if he considers you too small a customer to be worth his while, so look for someone who deals with individuals, not big businesses.

A good flow of information between accountant and client is crucial to ensuring the relationship works. Look for someone who will take the time to listen to and answer your questions, rather than the guy who grabs your shoebox full of receipts and rushes you out of his office.

If your affairs are not overly complicated, your best bet is to ask your friends who they work with. Your friends will likely have many of the same needs as you, and a good reference gets you halfway there.

That said, talk to at least three accountants before choosing one. The mere act of shopping for an accountant will give you the opportunity to get lots of free advice because accountants, like most businesspeople, will never have as much time for you as when they are trying to sign you up as a client.

Take a bookkeeping course
The best advice for any Canadian is to try, as much as possible, to be your own accountant. Learn the bookkeeping, budgeting and record keeping basics. Read at least enough about taxation to able to ask your accountant the right questions and to do a quick verification of your tax returns to make sure he made all the basic deductions.

Research and anecdotal evidence shows that people who understand finance and manage money well -- even if they don't have a lot of it -- are happier than those who don't. So go out and hire an accountant to perform tasks that you can't. But also take a little time to learn how to manage your own financial affairs. It'll be the best time investment you'll ever make.

Peter Diekmeyer is a Montreal-based business writer.

-- Posted: Feb. 11, 2005
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