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
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
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
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
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.
Diekmeyer is a Montreal-based business writer.