PUBLIC ACCOUNTANTS COUNCIL HANDBOOK

Transcription

1 PUBLIC ACCOUNTANTS COUNCIL HANDBOOK Adopted by the Public Accountants Council for the Province of Ontario: April 17, 2006

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3 PART I: PROFESSIONAL COMPETENCY REQUIREMENTS FOR PUBLIC ACCOUNTING PART II: PRACTICAL EXPERIENCE REQUIREMENTS FOR PRACTISING PUBLIC ACCOUNTING

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5 PART I: PROFESSIONAL COMPETENCY REQUIREMENTS FOR PUBLIC ACCOUNTING

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7 Table of Contents Part I: Professional Competency Requirements for Public Accounting Definitions 1 Pervasive Qualities and Specific Competencies A Vital Relationship 5 The Public Accountant Knowledge Base 6 How to Read the Competency Charts 7 List of Public Accountant Competencies 13 The Pervasive Qualities and Skills 21 Section A: Ethical Behavior and Professionalism 21 Section B: Personal Attributes 26 Section C: Professional Skills 31 The Specific Competencies 64 Organizational Effectiveness, Control and Risk Management 64 Knowledge Reference List 78 Example of the expectations at each proficiency level 81 Finance 83 Knowledge Reference List 93 Example of the expectations at each proficiency level 98 Taxation 100 Knowledge Reference List 107 Example of the expectations at each proficiency level 118 Assurance 120 Knowledge Reference List 142 Example of the expectations at each proficiency level 145 Performance Measurement 147 Knowledge Reference List 163 Example of the expectations at each proficiency level 167 Information and Information Technology 169 Knowledge Reference List 179 Example of the expectations at each proficiency level 183

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9 DEFINITIONS Competence: the broad range of knowledge, skills, attitudes, and observable behavior that together account for the ability to deliver a specified professional service. Competence also involves adoption of a professional role that values accountability to the public and leadership in public practice, industry, government, and education. Competency: the particular tasks that public accountants perform while applying, or bringing to bear, the pervasive qualities and skills that are characteristic of public accountants to the level of proficiency defined in Professional Competency Requirements for Public Accounting. Pervasive qualities and skills: the professional qualities and skills that all public accountants are expected to bring to all tasks the how of a public accountant s work. The Professional Competency Requirements for Public Accounting identifies pervasive qualities in three categories ethical behavior and professionalism, personal attributes and professional skills which are defined as follows: Ethical Behavior and Professionalism: the public accountant profession is committed to maintaining the confidence of clients, employers and the public through an overriding commitment to integrity in all professional work. Thus all public accountants are expected at all times to abide by the highest standards of integrity; they must be and be seen to be carrying out all work objectively and independently, in accordance with the ethical values outlined in detail in Section A of Professional Competency Requirements for Public Accounting (See pages 21 25). Personal Attributes: public accountants are expected to develop a number of personal qualities that shape the way they conduct themselves as professionals. These qualities or attributes are outlined in Section B of Professional Competency Requirements for Public Accounting (See pages 26 30). Professional Skills: public accountants are also expected to possess a wide range of professional skills that, while not unique to the public accountant profession, are critical to its successful practice. These skills are outlined in Section C of Professional Competency Requirements for Public Accounting (See pages 31 63). 1

10 The Competencies of the Newly Qualified Public Accountant Specific Competencies: the competency areas of the public accountant profession. There are specific competencies grouped into six categories: I-Organizational Effectiveness, Control and Risk Management competencies related to the evaluation and development of an entity s ability to enhance its decision-making and maximize its organizational performance, including its governance, structure, policies, systems and resources; II-Finance competencies related to financial management, financial strategy and financial decision-making; III-Taxation competencies related to taxation planning, compliance and reporting for various entities; IV-Assurance competencies related to statutory and regulatory audit/assurance requirements as well as broader validation and assurance services; V-Performance Measurement competencies related to the evaluation, development and interpretation of an entity s financial and non-financial information that measures and enhances an entity s organizational performance; and VI-Information and Information Technology competencies related to the evaluation of an entity s information needs and the development and use of information technology in achieving its strategic and operational goals and objectives. Although these six areas are presented separately, there is considerable integration among them and with the pervasive qualities and skills. The importance of integration cannot be overstated, and it is usually highlighted through references in the document. For example, in drafting a report on an assurance engagement (competency IV-2.13), the public accountant would likely be demonstrating competence in a number of other areas, including but not limited to the pervasive qualities and skills, e.g. becoming knowledgeable about the client (professional skills C-1.2 and C-8.3), and all, or components of the competencies of developing accounting policies (V-2.1), analyzing the applicability of current developments (V-2.3), and addressing tax-related issues (III-2.2, i.e., tax provision.) Normal circumstances: circumstances where: The entity is a business in the private sector, formed as a proprietorship, as a partnership, as a private corporation, as a small public corporation, or as a division of a large public corporation; or The entity is in the public sector or is a not-for-profit organization or a division of either; or The entity is an individual; and The entity, situation, event or transaction is of a size or degree of complexity likely to be encountered by a public accountant at the point of qualification. 2

11 The Competencies of the Newly Qualified Public Accountant For qualification purposes, candidates for licensing are expected to demonstrate specified levels of proficiency in normal circumstances. Level of Proficiency: the degree of expertise an individual exhibits in a competency. Levels of proficiency apply to the newly qualified public accountant. Thus Professional Competency Requirements for Public Accounting defines the level of proficiency candidates must demonstrate to qualify for their designation. Three distinct and increasingly sophisticated levels of proficiency are identified; C, B, and A, which are fully defined below. Level C: to be able to describe accurately the task or role constituting the competency, the possible evidence of performance, the significance of the competency, and the types of circumstances in which it would arise or be applied in normal circumstances. The C level of proficiency is demonstrated when a public accountant explains, summarizes, gives examples, depicts, interprets, and paraphrases, among other things, the professional skills and underlying knowledge required by the competency. Level B: to demonstrate without prompting from others an understanding of the task and demonstrate the required professional skills including basic quantitative and qualitative analysis, but not necessarily the ability to successfully complete the task without adequate support or supervision in normal circumstances. The B level of proficiency is demonstrated when the nature of the problem is identified. Issues related to the problem are then often evaluated, analyzed, etc., on a preliminary basis only; that is, the work requires the review of more senior personnel to ensure its completeness and accuracy. Any requirement for the involvement of personnel with special expertise necessary to complete all aspects of the task is identified. This level of proficiency includes the C level of proficiency. Level A: to complete all elements of a specified task successfully in normal circumstances. The A level of proficiency is demonstrated when the problem is clearly identified and thoroughly analyzed or when a situation is evaluated and useful recommendations are made and/or implemented. The public accountant is responsible for the work whether it is completed solely by a public accountant or by a team of public accountants. This level of proficiency includes the B and C levels of proficiency. The following example provides expectations at the A proficiency level, and, to assist candidates in differentiating among the three proficiency levels, it also provides expectations for C and B proficiency levels. Scenario: An entry-level public accountant is hired as the controller of a newly formed parts manufacturing company. The company has yet to issue its first set of financial statements. (See Competency V-2.1, page 153) NOTE the above scenario is considered to be in normal circumstances because the 3

12 The Competencies of the Newly Qualified Public Accountant entity is a manufacturing company in the private sector and is of a size and degree of complexity likely to be encountered by an entry-level public accountant. The newly qualified public accountant is expected to have an A proficiency level for this competency. Level 'C': The entry-level public accountant at the C level explains to senior management the importance of establishing accounting policies and of consistently applying those policies to the company s financial transactions. The public accountant informs management of some of the factors to be taken into account when developing the accounting policies, such as, users specific needs, or industry specific practices. The public accountant explains that often there are alternative accounting treatments and that judgment is required in establishing the policy that best suits the entity. Level 'B': The entry-level public accountant at the B level, in addition to the skills and abilities above, also asks senior management to describe the company s key transaction streams. The public accountant then documents these streams, and based on this information identifies alternative accounting treatments. The public accountant identifies the significant factors that influence the choice of policies, such as, the various financial statement users and their needs. The public accountant presents suggested policies to senior management who will make the decision as to which ones to implement. Level 'A': The entry-level public accountant at the A level, in addition to the skills and abilities outlined in both C and B above, is responsible for developing the company s accounting policies. The public accountant gains an understanding of who the various stakeholders are and of their reporting needs. The public accountant analyzes the information gathered and then chooses the accounting policies that best reflect the results of the entity and provide the most useful information for measuring performance. The public accountant implements the policies and subsequently reports to senior management the steps taken in establishing them. Newly qualified public accountants will invariably be involved in a multitude of professional tasks which will vary considerably among them depending on their particular environment and the nature of their employment. For example, with respect to competency III-1.2, Evaluates and advises management on applicable new tax legislation, (where the proficiency level expected of the newly qualified public accountant is B), those employed in small private or public organizations, or who provide services as small or sole public practitioners, will likely need to function at the A proficiency for this competency. Those newly qualified public accountants employed in large private or public corporations are more likely to have their work on this competency reviewed by a more senior member within the organization prior to its finalization (a B proficiency level). With respect to varying environmental situations, there is no one size fits all. Proficiency levels that are assigned to the competencies in this document set out what should be reasonably expected of the newly qualified public accountant. 4

13 The Competencies of the Newly Qualified Public Accountant Pervasive Qualities and Specific Competencies A Vital Relationship The qualities and skills in Professional Competency Requirements for Public Accounting combine with the specific competencies in a vital relationship that results in the special professional competencies of the public accountant. Together, the pervasive qualities and the specific competencies result in the technical excellence and on the integrity, objectivity, and commitment to public interest for which the public accountant profession is known. All public accountants are expected to perform functions in a manner that reflects ethical behaviour and professionalism, the personal attributes, and the professional skills that are part of the public accountant standard. The diagram below illustrates the components of the competency-based approach. 5

14 The Competencies of the Newly Qualified Public Accountant The Public Accountant Knowledge Base The public accountant qualification s competency-based approach recognizes that knowledge is necessary but not sufficient for performing professional services. For knowledge to become a public accountant competency, it must be applied in a manner that includes the integration of the public accountant pervasive qualities and skills described above. The acquisition of the public accountant knowledge base is, however, critical for success. Public accountants acquire knowledge that encompasses the economic, legal, and business environment in which businesses and other organizations operate, and knowledge such as generally accepted accounting principles and current tax regulation, directly related to one or more competencies. Candidates acquire knowledge throughout the public accountant qualification process, through academic programs and work experience, and from reference materials, teachers and other professionals who may provide information and advice. Understanding the Knowledge Reference Lists To help candidates identify knowledge integral to the competencies they are expected to demonstrate, a Knowledge Reference List is included for each specific competency area. This list outlines the knowledge that underlies each specific competency area. Generally, candidates can use this list as a guide to ensure they have identified the appropriate material underlying the specific competency areas. In generating the knowledge reference lists, information was gathered from various sources: the CICA Handbooks and other CICA publications, The Income Tax Act, and undergraduate textbooks. Candidates are encouraged to access similar sources to further their breadth and depth of knowledge. The Knowledge Reference Lists include individual topics of knowledge under the specific competency area where they are most relevant, or most strongly identified. This does not mean that this knowledge is relevant to only that area. In many instances, knowledge is relevant to two or more areas. So, for example, organizational effectiveness, control and risk management knowledge topics are all listed under the Organizational Effectiveness, Control and Risk Management section; they may, however, also be relevant to Finance or Assurance. 6

15 How to Read the Competency Charts Organization As noted in the previous section, the public accountant competencies are organized into two categories: Pervasive qualities and skills which all public accountants are expected to exhibit at all times; and Specific competencies, in which all public accountants must attain a required level of proficiency to earn their public accountant designation. There are three categories of pervasive qualities and skills, and six categories of specific competencies. Pervasive qualities and skills The charts describing the pervasive qualities and skills have two sections: in the box on the left, a comprehensive description of the public accountant quality, and in the box on the right a description of the kind of evidence that one would expect the public accountant s behaviour to demonstrate. Example A-7 Maintains and enhances the profession s reputation Performs work to a high standard of quality Contributes to the enhancement of the profession* Encourages prospective candidates to join* Promotes the profession in conversation* Participates in some of the profession s activities such as conferences and in the work of governing bodies, such as committees or councils* Possible evidence of behaviour Users of the work confirm its quality Others confirm that the public accountant s behaviour and performance enhance the profession Has a record of contributing to professional activities * Not examinable on the licensing examination 7

16 How to Read the Competency Charts The most important thing to understand about the pervasive qualities and skills is that all public accountants are expected to demonstrate them at all times in the execution of all their professional responsibilities. The pervasive qualities and skills describe how a public accountant works, and are vitally linked to the specific competencies. Together, they combine to produce the technical excellence, integrity, objectivity, and commitment to public interest for which the public accountant profession is known. Performance levels and the Pervasive Qualities and Skills: As noted, Professional Competency Requirements for Public Accounting distinguishes and defines three levels of proficiency that a public accountant may demonstrate for each competency i.e., C, B, and A, with A being the highest proficiency level. For many competencies, the newly qualified public accountant is expected to function only at the C or B level. For most of the pervasive qualities and skills, however, even the newly qualified public accountant is expected to demonstrate the highest level of proficiency. Only in the third part, Section C Professional Skills is it reasonable to expect a lower proficiency level at entry to the profession. In these instances, the box on the left describes the highest proficiency level i.e., the A level and then notes and defines any lower level expectation in brackets. Example C-2.8 Draws conclusions / forms opinions Possible evidence of skill Taking into account the identified purpose, the information gathered and the analysis of that information, forms an opinion on the outcome of an issue or on the impact of the information on a situation; e.g., Based on the projected cash flow, the company will have insufficient cash to finance the expansion. Summarizes a position or argument after reviewing the relevant information (At B, forms preliminary conclusions and opinions) Provides evidence of analyzes (C-2.1), advises (C-3.3), and communicates (C- 4) The conclusions flow logically from the facts and analysis The reasoning is sound Sufficient information is obtained to support all conclusions, or a statement is made that a conclusion cannot be reached Conclusions, including recommendations for follow-up work, are logical, and reflect fairly the evidence and knowledge at hand 8

17 How to Read the Competency Charts The Specific Competencies The section on specific competencies is organized into six categories: Organizational Effectiveness, Control and Risk Management Finance Taxation Assurance Performance Measurement Information and Information Technology Each of these six categories has four elements: A description of the competency; Charts describing the tasks related to each competency at the proficiency level expected of the newly qualified public accountant; A list of the knowledge underlying the competency, referred to as a Knowledge Reference List. This list identifies the knowledge which candidates gain through their undergraduate, graduate and/or professional education and/or through their working experience with recognized training offices. The List is intended to help candidates ensure they understand the knowledge they must acquire to prepare themselves for the challenges of qualification; and Examples of how the listed knowledge underlies the kinds of situations the newly qualified public accountant might expect to encounter, and thus what candidates for licensing may encounter in the licensing examination simulations. The competency charts for the specific competencies are also linked very closely to the Professional Skill charts found in Section C referred to in the last section. Understanding the Specific Competency Charts The competency charts for the specific competencies provide the public accountant candidate with a clear description of the competency at the performance level they are expected to demonstrate, and the actions that are considered by the profession as possible sources of evidence that they have attained that proficiency level. Note that, on the title of each competency, the proficiency level of the newly qualified public accountant is clearly indicated. Candidates are encouraged to refer to the definitions of these proficiency levels on page 3. 9

18 How to Read the Competency Charts Example 1: I-1 Evaluates the entity s purpose in the context of its operating environment Expected Proficiency Level I-1.3 Evaluates the assessment of the Board s or other governing body s performance Understands and describes a Board s or other governing body s processes for self-assessment Competency Description C Possible evidence of proficiency Provides evidence of understanding processes relevant to the assessment of Board or other governing body performance States, in own words, the implications of Board or other governing body performance in serving the public States, in own words, the various tools and techniques available for Board or other governing body self-evaluation Identifies tools and techniques to assess a Board s or other governing body s performance Demonstrating Proficiency The preceding example shows a single competency for which candidates are expected to demonstrate a single level of proficiency. 10

19 How to Read the Competency Charts Example 2 II-3.1 Manages budgets, cash flow, working capital, and financial instruments Competency Description Possible evidence of proficiency Analyzes, reports on, and manages short-term cash needs Analyzes long- and medium-term capital and cash needs and develops strategies for obtaining necessary financial resources Prepares appropriate budgets to aid in planning Evaluates actual performance against budget Expected Proficiency Level In collaboration* with others, suggests action to take to improve organizational performance Identifies, on a preliminary basis, suitable financial instruments for managing cash flow Participates in negotiations with brokers and investment advisors to choose appropriate financial instruments A B Provides evidence of analyzes (C-2.1), presents (C-4.3), manages (C-5.1), forecasts (C-2.2) and evaluates (C-2.6) Compares cash flow projections with actual recent cash flows to assess reasonableness Confirms with senior executives that the analysis adds significant value to the management of the cash position There is a basis for proper budgetary control, cash flow management, and use of short-term financial instruments Provides evidence of analyzes (C-2.1), recommends (C-3.3), negotiates (C-5.7) and identifies (C-3.1) at a B level of proficiency Demonstrating Proficiency * Not examinable on the licensing examination 11

20 How to Read the Competency Charts The preceding example demonstrates a competency for which candidates are required to demonstrate different proficiency levels in different competency elements for some elements, they are expected to function at the A level, and for others at the B level. The difference in proficiency level expectation is reflected in two ways: First, the description of the competency element at the B level clearly indicates that the task is executed on a preliminary basis and is normally subject to review by senior staff; Second, the possible evidence of proficiency for the B level on the right-hand side refers the candidate back to the definition of the key Professional Skills for this level of proficiency. There the candidate will find further guidance on proficiency expectations at this level. The candidate should also note instances where there is clarification on the examinable nature of specific competencies. Examples At the end of each of the six Specific Competency sections, examples are provided to help candidates understand the different expectations at each proficiency level. In each of these examples, the particular proficiency level expected of the entry-level candidate is identified (either A, B or C). In addition, in order to assist the candidate in differentiating between the expectations of the three proficiency levels, each of these examples also includes the expectations that would otherwise be expected if the proficiency level were different than the one associated with the particular competency. That is, if the entry-level proficiency for the particular competency in an example is B, the example will also include expectations at the proficiency levels for A and C to assist the candidate in understanding the differences 12

21 How to Read the Competency Charts List of Public Accountant Competencies THE PERVASIVE QUALITIES AND SKILLS Public Accountant Entry-Level Proficiency Details on Page Section A: Ethical Behaviour and Professionalism A 21 A-1 Protects the public interest 22 A-2 Acts competently with honesty and integrity 22 A-3 Carries out work with a desire to exercise due care 23 A-4 Maintains independence where the nature of the work requires it 23 A-4.1 Maintains objectivity and independence 23 A-4.2 Avoids conflict of interest 24 A-5 Protects the confidentiality of information 24 A-6 Practises professional courtesy 24 A-7 Maintains and enhances the profession s reputation 25 A-8 Adheres to the rules of professional conduct 25 Section B: Personal Attributes A 26 B-1 Is self-managing 26 B-2 Demonstrates initiative 27 B-3 Maintains and demonstrates competence and recognizes limits 28 B-4 Strives to add value 28 B-5 Applies strategic thinking 29 B-6 Develops innovative ideas / is creative 29 B-7 Adapts to change 29 B-8 Treats others in a professional manner 30 Section C: Professional Skills 31 C-1 Obtains Information A, B 31 C-1.1 Gathers, creates or develops information and ideas 31 C-1.2 Develops an understanding of the operating environment 32 C-1.3 Identifies the needs of internal and external clients 33 13

22 List of CA Competencies THE PERVASIVE QUALITIES AND SKILLS Public Accountant Entry-Level Proficiency Details on Page C-2 Examines and Interprets Information and Ideas Critically A, B 33 C-2.1 Analyzes information or ideas 33 C-2.2 Performs computations 35 C-2.3 Tests, or validates information 36 C-2.4 Observes and analyzes activities 37 C-2.5 Verifies information 38 C-2.6 Evaluates information and ideas 39 C-2.7 Combines or synthesizes and/or integrates ideas and information from various sources 40 C-2.8 Draws conclusions/forms opinions 40 C-3 Solves Problems and Makes Decisions A, B 41 C-3.1 Identifies and diagnoses problems and/or issues 41 C-3.2 Develops solutions 42 C-3.3 Decides / recommends / provides advice 43 C-4 Communicates Effectively and Efficiently 44 C-4.1 Seeks and shares information, facts and opinions through presentation and discussion A, B 44 C-4.2 Communicates in written and graphic form A 45 C-4.3 Presents information to groups effectively A, B 46 C-4.4 Leads effective meetings A, B 47 C-4.5 Confirms information to prevent misunderstanding A 48 C-5 Manages and Supervises 49 C-5.1 Plans and manages projects A, B 49 C-5.2 Organizes necessary internal and external expertise A, B 50 C-5.3 Recruits and hires professional staff A, B 50 C-5.4 Provides leadership A 51 C-5.5 Supervises and coaches professional staff and evaluates their performance A 51 C-5.6 Facilitates group processes such as planning, problem solving and conflict resolution A, B 52 C-5.7 Negotiates A, B 53 C-5.8 Manages an internal functional area, e.g., treasury, internal audit, legislative audit entity of the federal government or provincial government C 53 C-6 Uses Technology Efficiently and Effectively 55 C-6.1 Uses technology efficiently and effectively A, B 55 14

23 List of CA Competencies THE PERVASIVE QUALITIES AND SKILLS Public Accountant Entry-Level Proficiency Details on Page C-7 Considers Basic Legal Concepts 56 C-7.1 Considers basic legal concepts A, B 56 C-8 Provides Professional Services 56 C-8.1 Creates or contributes to the service area(s) of the particular public accountant practice A 57 C-8.2 Becomes knowledgeable about certain client industries A 57 C-8.3 Becomes knowledgeable about the client A, B 58 C-8.4 Applies knowledge to identify and discuss critical business issues A, B 58 C-8.5 Promotes, designs, and negotiates professional services C 59 C-8.6 Manages a practice area within a professional services C 60 firm C-8.7 Plans to fully meet all client expectations in each assignment A, B 61 C-8.8 Analyzes and advances own professional development and that of engagement team members A 61 C-8.9 Confirms whether client expectations are met A, B 62 C-8.10 Captures, communicates, and implements lessons learned from each engagement A, B 62 C-8.11 Finalizes the engagement A, B 63 THE SPECIFIC COMPETENCIES Public Accountant Entry-Level Proficiency Details on Page Organizational Effectiveness, Control and Risk Management 64 I-1 Evaluates the Entity's Purpose in the Context of its Operating Environment 65 I-1.1 Evaluates the entity s mission, vision and strategic goals B 65 I-1.2 Evaluates the Board s or other governing body s leadership abilities C 66 I-1.3 Evaluates the assessment of the Board s or other governing body s performance C 67 I-1.4 Evaluates uncertainties in the entity s operating environment B 67 I-1.5 Identifies and evaluates opportunities and risks and establishes acceptable risk levels B 68 I-2 Evaluates the Entity s Commitment to Fulfilling its 69 15

24 List of CA Competencies THE SPECIFIC COMPETENCIES Public Accountant Entry-Level Proficiency Details on Page Mission and Vision 69 I-2.2 Evaluates or develops a risk management policy B 69 I-2.3 Conducts ongoing risk level analysis B 70 I-2.4 Develops or advises on stated performance objectives (Referenced) 70 I-2.5 Evaluates or develops processes to transform plans into action B 71 I-2.6 Evaluates the extent of integration within the entity B 71 I-2.7 Evaluates the entity s human resources policies C 72 I-2.8 Evaluates decision-making and accountability processes B 72 I-3 Evaluates the Entity s Ability to Manage Organizational 73 Performance I-3.1 Evaluates application of appropriate expertise B 73 I-3.2 Evaluates access to information and other resources B 73 I-3.3 Evaluates the entity s major processes B 74 I-3.4 Evaluates internal control A, B 75 I-4 Evaluates the Entity s Monitoring and Learning Processes 76 I-4.1 Evaluates the entity s monitoring processes B 76 I-4.2 Evaluates the entity s adaptability to change C 77 I-4.3 Evaluates the capacity to implement change C 77 I-4.4 Evaluates the challenging of assumptions C 77 Finance 83 II-1 Establishes or Evaluates Overall Financial Goals 83 II-1.1 Establishes / evaluates financial objectives B 83 II-1.2 Determines or evaluates the legal form and structure of the entity B 83 II-1.3 Recommends overall financial strategies B, C 84 II-2 Develops Financial Information to Support Financial Decision- 85 Making II-2.1 Prepares and interprets information for financial decisionmaking A, B 85 II-2.2 Identifies and analyzes financial instruments B 86 II-2.3 Develops or critiques business plans and financial A 86 proposals II-2.4 Identifies or advises financially troubled businesses B 87 II-3 Makes Financial Decisions and Executes Transactions 88 II-3.1 Manages budgets, cash flow, working capital, and 16

25 List of CA Competencies THE SPECIFIC COMPETENCIES Public Accountant Entry-Level Proficiency Details on Page financial instruments A, B 88 II-3.2 Raises capital privately or in broader capital markets B 89 II-3.3 Supports the purchase, expansion, or sale of a business B 90 II-4 Manages the Financial Management Function 91 II-4.1 Develops systems to monitor and report performance relative to stated financial goals B, C 91 II-4.2 Develops systems to monitor environmental shifts C 91 II-4.3 Manages investor, creditor, and other stakeholder C 91 relations II-5 Performs Personal Financial Planning 92 II-5.1 Performs personal financial planning A, B 92 Taxation 100 III-1 Analyzes the Entity s Tax Profile and Identifies Overall Tax Issues 100 III-1.1 Seeks to improve the entity s tax profile B 100 III-1.2 Evaluates and advises management on applicable new tax legislation on an ongoing basis B 101 III-1.3 Identifies, analyzes, and advises on compliance and filing requirements A, B 101 III-1.4 Analyzes the range of professional expertise required to advise on potential tax issues A, B 102 III-2 Prepares and Files Necessary Returns in Accordance with Legal Requirements 102 III-2.1 Advises on tax compliance A 102 III-2.2 Meets filing requirements A, B, C 103 III-3 Practices Effective Tax Planning to Maximize After-Tax Returns 104 III-3.1 Identifies, analyzes, and advises on specific tax planning opportunities B 104 III-3.2 Analyzes tax consequences of transactions and business opportunities B 105 III-4 Supports, Defends, and Negotiates Tax Positions 105 III-4.1 Analyzes and responds to assessments B 105 III-4.2 Prepares information to support objections, appeals, and court litigation B 106 III-5 Contributes to Federal and Provincial Tax Policy 106 III-5.1 Contributes to public debate C 106 Assurance 120 IV-1 Evaluates Assurance Needs

26 List of CA Competencies THE SPECIFIC COMPETENCIES Public Accountant Entry-Level Proficiency Details on Page IV-1.1 Analyzes / evaluates and advises on the entity s assurance needs A, B 121 IV-2 Provides Professional Assurance Services 122 IV-2.1 Evaluates and decides whether to accept an engagement A, B 122 IV-2.2 Evaluates and decides on the scope of the engagement A, B 124 IV-2.3 Identifies and evaluates objectives and strategies of the entity and the related business risks and determines the implications for the engagement A, B 125 IV-2.4 Determines criteria for evaluating the subject matter based on the nature of the subject matter A, B 126 IV-2.5 Develops materiality / significance guidelines that will guide the direction and extent of assurance work, based on the scope and expectations of the engagement A, B 127 IV-2.6 Designs appropriate procedures based on the engagement s scope, risk and materiality / significance A, B 128 guidelines IV-2.7 Assigns staff to carry out the engagement A, B 129 IV-2.8 Collaborates with colleagues, the client, and others A, B 130 IV-2.9 Executes the work plan A 132 IV-2.10 Documents the procedures performed A 132 IV-2.11 Modifies the program as necessary A, B 133 IV-2.12 Evaluates the evidence and the results of analysis A, B 134 IV-2.13 Draws conclusions and drafts a report A, B 135 IV-2.14 Prepares for and conducts informative and value-added meetings with stakeholders A 137 IV-2.15 Finalizes the engagement A 138 IV-3 Provides Internal and Comprehensive Auditing 139 IV-3.1 Decides on the internal and comprehensive assurance procedures needed and develops them C 139 IV-3.2 Performs internal assurance procedures A 139 IV-3.3 Presents internal assurance report B 140 IV-4 Contributes to the Development of New Assurance Services 140 IV-4.1 Contributes to the development of new assurance services C 140 IV-5 Contributes to Assurance Standards 140 IV-5.1 Critiques and contributes to emerging standards such as Generally Accepted Auditing Standards (GAAS) C 140 IV-5.2 Critiques and contributes to trends in standard setting C

27 List of CA Competencies THE SPECIFIC COMPETENCIES Public Accountant Entry-Level Proficiency Details on Page Performance Measurement 147 V-1 Analyze Performance Measurement Needs 147 V-1.1 Analyzes performance measurement needs A, B 147 V-1.2 Evaluates the entity s performance measurement strategy A, B 149 V-1.3 Develops or evaluates systems for performance A, C 151 measurement V-1.4 Evaluates the reliability of information or develops reliable information A, B 152 V-2 Conducts External Financial and Non-Financial Reporting 153 V-2.1 Develops / evaluates accounting policies A 153 V-2.2 Develops / evaluates suitable criteria for measuring nonfinancial performance C 153 V-2.3 Analyzes the applicability of current developments B, C 154 V-2.4 Analyzes or evaluates the entity s non-routine B 154 transactions V-2.5 Develops / evaluates / presents actual results A, B 155 V-2.6 Analyzes or evaluates the application of other sources of accounting policies on financial information C 156 V-2.7 Identifies and analyzes reporting obligations A 156 V-3 Conducts Internal Financial and Non-Financial Reporting 157 V-3.1 Develops / evaluates organizational performance measurement strategies B 157 V-3.2 Develops / evaluates suitable criteria for measuring performance for internal reporting A, C 158 V-3.3 Develops / evaluates / presents actual results A, B 159 V-3.4 Provides advice based on information obtained through performance measurement A, B 159 V-3.5 Provides litigation support C 160 V-4 Contributes to the Development of New Techniques 161 V-4.1 Analyzes and critiques emerging forms of performance measurement C 161 V-4.2 Designs, develops, and publicizes new techniques C 161 V-5 Contributes to Performance Measurement Standards 162 V-5.1 Critiques emerging standards C

28 List of CA Competencies THE SPECIFIC COMPETENCIES Public Accountant Entry-Level Proficiency Details on Page V-5.2 Critiques and contributes to trends in standard setting C 162 Information and Information Technology 169 VI-1 Assesses Information Technology Strategy 169 VI-1.1 Identifies the entity s IT needs B 169 VI-1.2 Evaluates the entity s existing IT strategy B 170 VI-2 Evaluates the Impact of Information Technology on the Entity s Organizational Performance 171 VI-2.1 Identifies the role information technology plays in a given control system A 171 VI-2.2 Contributes to the evaluation of IT-related elements of a given control system B 171 VI-2.3 Uses IT to improve an existing control process B 172 VI-2.4 Contributes to the evaluation of the entity s systems development and program change processes B 173 VI-2.5 Investigates the dependence of systems on third parties A 173 VI-2.6 Evaluates the IT internal audit function B 174 VI-3 Improves the Entity s IT Design 174 VI-3.1 Evaluates the business impact of new developments and trends in technology B 174 VI-3.2 Improves the entity s IT design and development B 175 VI-3.3 Develops business case to support IT proposals B 176 VI-3.4 Evaluates and decides on IT acquisition and sourcing C 177 VI-4 Designs and Manages System Installations and Upgrades 177 VI-4.1 Designs and manages or advises on system installations and upgrades B, C 177 VI-4.2 Designs and implements IT accounting systems using commercial accounting software B 178 VI-5 Contributes to Developments in IT 178 VI-5.1 Contributes to public debate C

29 The Pervasive Qualities and Skills Section A Ethical Behaviour and Professionalism Ethical Behaviour and Professionalism is the first of three categories of the Pervasive Qualities and Skills, i.e. those qualities that a public accountant brings to any task. Whether recently qualified or highly experienced, all public accountants are required to abide by ethical values and conduct themselves professionally. Acting with integrity, through adherence to these values, is fundamental to the profession s commitment to excellence and the public interest. Integrity means acting ethically and honestly, carrying out all work in an objective frame of mind and maintaining independence, both in fact and in appearance, when providing independent services. Integrity also means that public accountants raise and address issues regarding stewardship that is, the discharge by management of its stewardship responsibilities to those who have provided resources to an entity. Public accountants have an obligation to assess, through enquiry and/or observation, that management is being accountable in addressing issues of stewardship honestly and to the level of its ability when making decisions or reporting information. The public accountant must also ensure that management s decisions are in the interests of all stakeholders. It is this commitment to integrity in everything that public accountants do that earns them their reputation for trustworthiness, and the confidence of clients, employers and the public at large. As a result, clients and employers seek to involve public accountants in the most significant financial and business issues that they face. 21

30 The Pervasive Qualities Ethical Behaviour and Professionalism A-1 Protects the public interest Possible evidence of behaviour For all services, and in particular those services that provide third party assurance, adheres to all existing standards for such services Understands the profession s standards of competence and integrity, and in particular standards pertaining to services where public accountants provide third party assurance, and how these standards serve the public and protect the public interest Identifies ethical dilemmas in a business or government situation and makes decisions that ensure the public interest is paramount All relevant standards are identified All relevant standards are met In own words, completely and accurately describes standards applicable to services where public accountants provide third party assurance, and explains how these standards serve the public and protect the public interest List of ethical dilemmas is complete Analyses of ethical dilemmas and decisions (courses of action) demonstrate due regard for the protection of the public interest above all but also recognize obligations to stakeholders A-2 Acts competently with honesty and integrity Understands the profession s standards of competence and integrity and, in particular, standards pertaining to services where public accountants provide third party assurance. Understands how such standards serve and protect the public interest Ensures breaches of the entity s code of conduct and unethical behavior are communicated to the appropriate level of government and/or board of directors Makes transparent decisions Recognizes and accepts responsibility for actions and decisions Uses all appropriate internal and / or external resources in resolving ethical dilemmas Acts honestly Follows the law and the spirit of the law Possible evidence of behaviour Interpretations and decisions clearly reflect the information or circumstances and are objective and logical Compliance with applicable laws Understanding of applicable rules and regulations is complete Takes appropriate action when independence is breached Communicates unethical behaviour to appropriate individuals on a timely basis Accesses employer s / professional code of conduct to help resolve ethical dilemmas Takes appropriate action in response to ethical breaches, e.g., declares a conflict, steps down, etc. 22

31 The Pervasive Qualities Ethical Behaviour and Professionalism A-3 Carries out work with a desire to exercise due care Ensures that when carrying out work client / employer / public interests are placed before own self interest Makes decisions which preserve the trust inherent in fiduciary relationships with the client or employer, the profession and the public at large Prepares information in such a way that pertinent facts are fairly presented and interprets information in an objective manner: assembles and considers all pertinent information takes reasonable steps to ensure underlying information is reliable draws conclusions that reflect information fairly Makes appropriate judgments based on an understanding of the level of care expected of professional accountants in various situations Exercises professional skepticism when required Possible evidence of behaviour Adheres to GAAS in the conduct of assurance based services Adheres to the Rules of Professional Conduct A-4 Maintains independence where the nature of the work requires it A-4.1 Maintains objectivity and independence Possible evidence of behaviour Assesses the principles and rules of independence and acts appropriately Identifies the effect of a potential bias on any proposed activity or decision Takes steps to maintain financial, reporting and investigative independence in both fact and appearance Understands the nature of bias and works to be impartial in the assessment of evidence collected in reaching an opinion Understanding of applicable rules is complete Evidence of compliance with rules of independence There is no reason to believe that the public accountant s decision-making or judgment were unduly influenced Takes appropriate action, including resignation from assignment, when independence is breached Has no financial relationship with the client as defined by the Rules of Conduct Reports at a level sufficient to have the information reported acted upon Has sufficient resources and time to carry out the needed work Has access to all evidence needed to reach an appropriate opinion 23

32 The Pervasive Qualities Ethical Behaviour and Professionalism A-4.2 Avoids conflict of interest Possible evidence of behaviour Understands and becomes aware of the existence and consequences of a real, potential or perceived conflict of interest Understands the reasons for avoiding a conflict of interest situation and the guidelines and laws that have been developed to prevent their occurrence Ensures that the interest of one client is not favored over the interest of another client or stakeholder Does not accept bribes, gifts favors or any other special advantages that could give rise to a real or perceived conflict of interest Acts honestly and maintains a duty to client / employer interests Adheres to the employer s / profession s code of conduct Does not provide restricted non-audit services and audit services simultaneously Does not represent more than one client in a transaction A-5 Protects the confidentiality of information* Does not divulge or exploit confidential information Prevents the accidental distribution of confidential information Possible evidence of behaviour Identifies categories of confidential information related to the work Explains completely and accurately what information can be communicated to whom Explains risks of accidental disclosure (Internet, faxes, loss of control over files, being overheard in public places) and describes steps to prevent accidental disclosure No confidential information is inappropriately disclosed The public accountant experiences no personal gain or potential gain arising from access to confidential information A-6 Practises professional courtesy Possible evidence of behaviour Understands and applies the principles of professional courtesy Explains how the principles of professional courtesy protect the public and fellow members Explanation is complete and accurate All principles are applied appropriately 24

33 The Pervasive Qualities Ethical Behaviour and Professionalism A-7 Maintains and enhances the profession s reputation Performs work to a high standard of quality Contributes to the enhancement of the profession* Encourages prospective candidates to join* Promotes the profession in conversation* Participates in some of the profession s activities such as conferences and in the work of governing bodies, such as committees or councils* Possible evidence of behaviour Users of the work confirm its quality Others confirm that the public accountant s behaviour and performance enhance the profession Has a record of contributing to professional activities A-8 Adheres to the rules of professional conduct Abides by the Rules of Professional Conduct for certain types of work such as assurance and insolvency Possible evidence of behaviour Identifies all such rules Identifies the applicability of the rules to the particular situation Compliance with rules of professional conduct * Not examinable on the licensing examination 25

34 The Pervasive Qualities Personal Attributes Section B Personal Attributes Certain personal or individual attributes make up the second of the three categories of Pervasive Qualities and Skills, i.e., those qualities that a public accountant brings to any task. The commitment by the public accountant profession to be leaders in enhancing decision making and improving organizational performance requires public accountants to foster individual characteristics that are vital to fulfilling this commitment. Thus, public accountants take responsibility for maintaining their own professional competence by keeping abreast of new developments and for managing their own careers. They know their own limitations, and use professional judgment in deciding when to involve specialists and other professionals. They exercise initiative without prompting; they strive constantly to add value; they think creatively; they are adaptable. These individual attributes manifest themselves in all the public accountant s professional undertakings and at all stages of his or her career. B-1 Is self-managing Possible evidence of behaviour Understands the mission, and strategic goals of the entity and sets personal goals to respond to its organizational goals Ensures all assigned work is complete; identifies lessons learned and makes suggestions for improving the effectiveness and efficiency of future engagements or assignments; assesses own performance and updates development plan Makes contacts that will enhance the public accountant s contribution to the entity* On a regular basis, analyzes information about the entity s performance that is pertinent to the public accountant s position and responsibility Takes responsibility for own career and professional development* Identifies the potential contribution of assignments to own professional development plan; proposes ways in which assignments might advance professional development* Evidence of analyzes (C-2.1) Explains mission, goals, and strategies of entity accurately in own words Contacts are suited to the entity In assigned work, leaves no loose ends Undertakes career planning When developing career plans, takes into account lessons learned from assignments Seeks appropriate guidance on career direction and development Career plan reflects research into career options and up-to-date learning tools Seeks appropriate guidance on professional development needs Researches and pursues appropriate professional development Displays an accurate understanding of own performance 26