Profession Career Standards

The Undesignated Accounting Practitioner: Providing a pathway that serves businesses and the public interest

Many small businesses across Canada rely on accountants without designations for bookkeeping and corporate taxes — but non-designated firms lack oversight

Author: James Green
James (Jim) Green
James (Jim) Green, RPA is owner and general manager of Green & Company, Registered Professional Accountants in Cambridge, Ontario, and secretary of the Society of Professional Accountants of Canada.

ROBERT and Sarah own a small business selling furniture in Ontario. Like many entrepreneurs, they depend on a local accountant for bookkeeping and corporate taxes. This year, they also require compiled financial statements for a loan application — a common scenario for small business owners. 

Consider three types of firms they might engage: one operated by a Registered Professional Accountant (RPA), another by a Chartered Professional Accountant (CPA), and a third by an accountant without a designation. Each offers a distinct approach to accounting services, which highlights the challenges and opportunities within the profession. 

The Designated Firms: Upholding Standards and Ethical Requirements 

Both RPAs and CPAs are certified upon joining their respective professional bodies after extensive education and the relevant Canadian Standards on Related Services (CSRS) 4200-specific training for compilation engagements. They adhere to a code of ethics, undergo practice reviews to ensure compliance, and are subject to oversight in providing services like bookkeeping and tax advisory. Additionally, both designations require professional development and adequate liability insurance when dealing with the public. 

For business owners like Robert and Sarah, these firms represent a secure option. While there are differences — the RPA designation focuses on small businesses and non-assurance compilations, whereas the CPA designation covers both small and large enterprises, and includes assurance services — both are committed to protecting the public interest. 

The Non-Designated Firm: Variable Competence with No Mechanism for Oversight

The undesignated firm may be run by an accountant with a university degree and a decade of experience. This firm might focus on bookkeeping and tax services and served businesses like Robert and Sarah’s for years. However, when clients seek a bank loan and need a compilation, they might be accustomed to issuing Notice to Readers. Perhaps they continued issuing compilations after the standard changed and made a good faith effort to comply with the new regulations.

But maybe not. It’s also possible they have adopted the cash method for all corporate tax returns as a matter of policy. When a client asks for one, they might provide a compilation without adhering to the procedures outlined in CSRS 4200, simply because they are unfamiliar with them. They may also forgo liability insurance, believing their incorporated status sufficiently protects their personal assets. By skipping steps, this firm may save time and undercut the prices of other firms.

For Robert and Sarah, engaging such a firm carries risks, including receiving a compilation report that does not meet their bank’s requirements, potentially delaying or jeopardizing their loan application. 

Beyond Robert and Sarah, their banker deserves a mention as they play the important role of evaluating the statements. Bankers are relatively sophisticated users of financial information, but they may be faced with a scenario where their client has brought them statements they are unsure about or potentially uncomfortable with. They want to know their interests are being protected. 

This underscores a challenge in protecting the public interest, highlighting that undesignated firms may lack consistent competence and quality control. There is no mechanism to certify their knowledge, ensure ethical conduct, enforce compliance with regulations, or oversee their work. 

The Central Dilemma: Balancing Public Protection and Professional Rights 

This raises an important question: How can we protect Robert, Sarah, and their banker, while respecting the value and rights of undesignated accountants?

In Ontario, as with other provinces, undesignated firms are a part of every community, as are countless solo practitioners. Many have operated for decades, issuing Notice to Reader compilation statements for what are otherwise bookkeeping clients, and might have continued doing so following the introduction of the CSRS 4200 compilation standard.

They may be unaware that the new standard makes it impossible to continue doing so without proper adherence, which — due to added requirements — they may not be in a position to do without a designation. However, any restriction of their scope of work introduces significant challenges.

Not being able to offer this routine service may result in undesignated firms having to refer away clients whenever the need for bank loans arises. This creates significant hardship. It results in unpredictable client losses and harms the undesignated accountant’s ability to earn a living. It also reduces consumer choice and increases costs for small businesses.  

A Constructive Solution: The RPA Pathway for Undesignated Practitioners 

To address these challenges, RPA Canada has introduced the Undesignated Accounting Practitioner Pathway to develop these accounting professionals. For small business owners like Robert and Sarah, this initiative ensures they can continue to rely on trusted accountants while knowing their work complies with professional standards. 

This pathway offers undesignated accountants an attainable means to become designated while continuing to operate their firms. It provides necessary upskilling and formalizes best practices to protect the public, ultimately elevating the standard of work across the industry. 

Through identifying training gaps and providing the required upskilling while the undesignated accountant continues to operate their firm, we bring them under the same set of rules and operating conditions as the rest of the industry. Clients like Robert and Sarah can trust that their accountants — whether CPAs or RPAs — are competent, comply with tax laws, engage in continuing professional development, adhere to a common set of business ethics, correctly apply standards, and carry liability insurance. This approach protects the public while preserving consumer choice and elevating the professional nature of the firms. 

By building up, we can achieve a more competent, ethical, and inclusive accounting industry — one that truly serves the public interest. 

James (Jim) Green, RPA is owner and general manager of Green & Company, Registered Professional Accountants in Cambridge, Ontario, and secretary of the Society of Professional Accountants of Canada. Title image: Aberrant Realities from Pixabay. Author photo courtesy James Green. 

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(9) Comments

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Upset Business Owner
Upset Business Owner Jan 31, 2025 -- 8:24 AM
This guy is a Monkey and is only concerned with bringing more "perceived value" to a designated accounting firm. One, akin to lawyers whom take advantage of small business owners with ridiculous fees. These graduates with their designations have never operated a business nor will they ever, unless they open their own firm and even then they still do they same processes. Compared to a season accounting professional that may have taken a start up to $100 million in sales, but their not designated. The second that the designated accountant has a small business client that needs a Review engagement (instead of a compilation) to support a loan, the fees go up dramatically, in upwards of 10x the compilation fees. Why? there may be a bit more time needed to comply with procedures, but the output is the same, and the small business owner is on the hook with no other choices. It's a disgraceful practice that accountants hold close.
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Woke Entrepreneur ;-)
Woke Entrepreneur ;-) Jan 31, 2025 -- 9:37 AM
Why the picture? Shows the real arrogance of these guys. How about a picture actually showing you helping someone? Oh yeah, no one would believe it. Sorry, Jim you may be a good guy and may not deserve these comments, but please understand your industry preys on small businesses and sucks up to all the large ones, so it's hard to believe you are any different.
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Just Trying to Get Through Life
Just Trying to Get Through Life Jan 31, 2025 -- 9:44 AM
This whole article is a joke. Simply ask why Small Businesses seek non-designated accountants. It's because the accountants this article says they need charge ridiculous fees for no better outcomes. It's only the industry (with banks) holding the others back from handling this kind of work and then charging multiples in their fees because small businesses have no where else to turn,
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sasha patel
sasha patel Jan 31, 2025 -- 9:49 AM
Does anybody actually read this other than me? Jim, how is this article effective for you? You are writing an article about "accountants" to "accountants" for the need of "designated accountants". Really? Why? Should this not have gone out to small businesses in order to convince them they need you instead of qualified non-designated accountants? Not much of a marketing strategy, huh? That's why these guys do not know how to run a business, let alone advise them.
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Kevin Samora
Kevin Samora Jan 31, 2025 -- 9:53 AM
on point comments here. just the grin bearing professional advocating for themselves and why they are better than those in the same industry but will simply dismiss them as they are according to him not at his level. nice.
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Retired Bookkeeper
Retired Bookkeeper Jan 31, 2025 -- 9:59 AM
Aren't you "Designated Accountants" not responsible for helping TD Canada Trust cover up criminals laundering money through their banks for the past 10 years. Or any bank for that matter? Who's responsible for these happenings? I can tell you it's NOT the non-designated. They do not even get to talk to these institutions.
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Justify Ethical and Inclusive
Justify Ethical and Inclusive Jan 31, 2025 -- 10:08 AM
JUST do a search on "CPA's stealing money". Then re-read this article. Especially highlighting the quote "By building up, we can achieve a more competent, ethical, and inclusive accounting industry — one that truly serves the public interest." So funny.
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A real accountant for small business
A real accountant for small business Feb 3, 2025 -- 3:33 AM
This is just RPA trying to prove it can be as bureaucratic and anal as CPA. Sounds like you're trying to kiss their butt; begging CPA to absorb RPA - just like they absorbed CMA and CGA a few years ago. OH, WAIT! You don't want that? Because the RPA society is older than even the old Chartered Accountants association? And the RPA designation has a federal charter (which no other professional accounting association has)? But, you still aren't licensed to do reviews, audits, or assurance work? So why are you trying so hard to put yourself on the same level? Stop trying to ride CPA coattails. If you're really focused on helping small business, you'd be better off distancing yourself from them.
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The Monkey
The Monkey Feb 4, 2025 -- 11:18 AM
Hi everyone, it seems I may have inadvertently offended some of you, which was not my intention. As for the picture - I just wrote the article. The article is for accountants and my goal is not to disparage anyone, but rather to advocate for (let's say more broadly) non-CPA accountants to continue performing compilations. I am trying to name and address concerns raised by provincial regulators and governments that have led to restrictions on non-CPA accountants performing compilations involving third parties—an evolving reality in some provinces. I believe it’s essential to preserve a viable alternative for non-CPA accountants who wish to continue offering this routine service. The transition from Notice to Reader engagements to CSRS 4200 was driven by concerns over inconsistent financial statement quality, particularly in documents submitted to banks. Regulators have a mandate to protect financial statement users, and the new standard—by referencing the CPA Canada Handbook in its disclaimer—has introduced additional requirements. This has given rise to arguments against non-CPA accountants issuing compilations, resulting in restrictions in some provinces. The RPA pathway I’m advocating aims to provide a practical solution for accountants already in public practice who seek designation, particularly as a means of addressing some of the reasons their provincial regulator may be using to restrict their scope of work. Again, I appreciate the discussion and sincerely apologize if my message came across the wrong way.
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