A year full of change—and new initiatives—for the profession

Data governance, sustainability and putting new AML rules into practice are three issues that will continue to be important to the profession into 2022

Despite (and in some cases because of) COVID-19, it’s been a busy year for the accounting profession, with a larger focus on sustainability and ESG, new tax and anti-money laundering rules, and an ever-greater role being played by CPAs in the post-pandemic recovery.   

Here are three areas that made headlines—and what CPAs can expect in 2022. 

1. SUSTAINABILITY IS TOP OF MIND

All eyes were on Glasgow in November, as world leaders gathered for COP26—the much-anticipated summit aimed at tackling climate change. 

“One of the key takeaways from COP26 was that climate action must be accelerated,” says CPA Rosemary McGuire, director of external reporting and capital markets at CPA Canada. “And for this to happen, there is an urgent need to scale up climate finance from all sources and deepen work across the financial system. New policies, regulations, financial instruments and incentives will be introduced, along with globally aligned ESG reporting standards.”

As a major step in that direction, the conference saw the official announcement of the IFRS Foundation’s International Sustainability Standards Board (ISSB). It will be responsible for developing a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs. 

It was also announced at COP26 that Montreal had been selected as one of two key centres for the ISSB, with the other to be established in Frankfurt. “Canada can be proud to participate in the establishment of this new board,” says McGuire. “And as one of a number of institutions that backed Canada’s bid to host the ISSB, CPA Canada also applauds this new development.”

While Canada is committed to the global approach to standard-setting through the ISSB, it is also conducting an independent review of the governance and structure for establishing Canadian accounting, auditing and assurance standards, as well as what might be needed for the future—specifically sustainability standards. The Independent Review Committee on Standard Setting in Canada will be issuing a consultation paper in December 2021 that will outline its thinking on why a Canadian Sustainability Standards Board is important. Canadian securities regulators are also consulting on proposed climate-related disclosure requirements. 

As these developments have been taking place, CPA Canada has continued to place a major focus on sustainability, responding to various consultations and issuing a number of new resources on the subject. These include a discussion paper on how directors can monitor ESG issues and a webinar on the role of CPAs in providing assurance on sustainability reporting (also see Engage the board and executive management with this A4S guide).

Plus, as Canada moves toward carbon neutrality (see Canada’s transition to net zero: Accelerating collaboration to meet 2050), CPA Canada has committed to reducing its greenhouse gas emissions to become carbon neutral.

2. NEW AML RULES BRING NEW OBLIGATIONS

On June 1, 2021, new requirements came into effect under Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). These updates strengthen Canada's AML regime in the areas of compliance, knowing your client (KYC), record-keeping and reporting to FINTRAC. As a result, they bring the country’s regime more in line with international practice. (It’s important to note that FINTRAC recently provided an update to reporting entities on its expectations regarding the rules as of December 1, 2021.)

The AML updates apply  to CPAs and accounting firms engaged in activities covered by the PCMLTFA and its regulations. Generally, this involves carrying out “triggering activities” (such as receiving funds on behalf of a person or entity). Therefore, CPAs whose work does not veer into these areas are not affected. However, those who are involved in these activities must ensure they have an appropriate compliance program in place, among other obligations. Failure to do so can have serious consequences. (A CPA Canada publication entitled Risky business: Non-compliance with AML requirements, will be available soon. This will follow the recent publications on KYC and reporting/record-keeping obligations.)

The AML updates have already had a positive effect on Canada’s stature internationally. In October 2021, the Financial Action Task Force noted that the country had made considerable progress on multiple compliance deficiencies identified in its 2016 report on Canada’s AML regime. “This improvement is in no small part due to the changes that came into force on June 1,” says FCPA Michele Wood-Tweel, vice-president of regulatory affairs at CPA Canada.

Also of note: the Commission of Inquiry into Money Laundering in British Columbia, known as the Cullen commission, heard closing oral submissions in October (CPA Canada and CPA British Columbia appeared at the hearings on October 15). The final report is expected to be delivered to the provincial government in May 2022.

3. PREPARING FOR THE FUTURE—AND THE PRESENT

This year, the Competency Map Task Force (CMTF) completed its work to develop a new competency map—a 20-month-long initiative that involved extensive consultation with stakeholders. 

The map, which is expected to be unveiled in the first quarter of 2022, will reflect current labour market requirements, taking into account the influence of automation and growing areas of opportunity such as sustainability, real-time decision-making and data governance. And while the profession has a strong foundation in areas such as ethics and protecting the public interest, it recognizes that CPAs must also use innovation, agility, creativity and resilience to continue to learn, lead and grow. 

FCPA Tim Jackson, chair of the CMTF, puts it this way: “[The CPA of tomorrow will be] curious, adaptable, collaborative, inclusive, taking ESG factors into account in decision-making [and] developing communication skills.” He adds that CPAs will also “embrace the idea of learning to learn and accept that today’s technical knowledge will already be less relevant in a year, two years, five years or 10 years.”

It’s with this need for technical skills in mind that CPA Canada has developed a number of new resources in the area, including its Data management foundations certificate.

And while certificates on blockchain and robotic process automation are still available, CPA Canada is developing an advanced data management certificate program that will focus on effective applications in data management and analytics. 

In addition to its other technology resources, the organization has launched a podcast series on technological and social transformations and their impact on the accounting profession, called Foresight: The CPA Podcast.

Clearly, it’s been a year that has brought many groundbreaking developments to areas of relevance to CPAs, such as sustainability and carbon neutrality, AML and digital innovation. And given that those topics are also featured in CPA Canada’s pre-budget submission for the 2022 federal budget, we want to see even more developments in the year ahead.

READ UP ON IMPORTANT ISSUES FOR THE PROFESSION

Learn more about the new “know your client” rules for CPAs and the requirements associated with record-keeping and reporting to FINTRAC. 

Plus, find out what the creation of an ISSB centre in Montreal will mean for the profession and explore the new skills that will be needed to prepare the next generation of CPAs for the digital world.