The strange and confusing world of Canadian accountants

The strange and confusing world of Canadian accountants

The word “accountant” is not protected by legislation in Canada. Anyone can claim to one. I’ve seen people call themselves a practical accountant, small business accountant, tax accountant, registered public accountant and many other similar names.

To complicate matters there are three accounting bodies recognized by legislation – Chartered Accountants (“CA”), Certified General Accountants (“CGA”) and Certified Management Accountants (“CMA”). They have varying amounts of experience, skill and training. Another organization – The Association of Chartered Certified Accountants (“ACCA”), which is not recognized by legislation, and claims to be the global body for professional accountants, offers their services. There are also thousands of Certified Public Accountants (“CPA”) from the United States and elsewhere.

For a country of about 34 million the accounting landscape is very complex. Contrast this with the United States, with a population of over 300 million, where a single designation is the most prominent – Certified Public Accountant.

Given all the choices how do you pick a Canadian accountant? I’m a Chartered Accountant (and a licensed public accountant in Ontario), and perhaps a little biased, but I believe Chartered Accountants are the best option. Regardless, start first by deciding why you need an accountant. Often the need is to prepare a tax return, help with special tax situations and planning, bookkeeping or just general advice. Then develop an image of the ideal accountant and try to find a match. Get a referral from your banker, a business colleague or friend that uses an accountant or knows one. A referral from a trusted source is one of the best ways to find a good one.

If you are a business owner, and give your financial statements to anyone other than the tax department, you need a licensed public accountant. Almost all public accountants in Ontario are Chartered Accountants but in the rest of the country a public accountant could be a CGA or CMA. If you don’t distribute financial statements, or are not a business owner, you can usually pick an accountant of your choice – licensed or not. 

If you come up short check the member directories of the accounting associations. Every professional body maintains a complete list of members and the directory is searchable.

Another way is to search Google. Search for the word “accountant” and the city where you live. We’re located in Mississauga, Ontario, Canada so you’d search “Mississauga Accountant” or “Accountant Mississauga” and the names of local accountants are listed. Google is a good way to find names but not necessarily the best accountant.  

Accountant New York: Solve Your Accounting Problems

The most time consuming, tedious and the most crucial aspect of any business is accounting. Whether a business is small or large, it needs the help of accounting or bookkeeping. Accounting is a task in which expertise is required. The person who manages the accounts of the firm has to be reliable. One can always hire a professional expert and his services in order to reap benefits in the company. Accountant New York is one such service provider which can help you get rid of the problems in maintaining books of accounts.

In order to run a business, there is requirement of a lot of management and expertise. It is not merely a child’s play. The professionals at accountant New York prepare a daily record of accounts so that all the financial records of the business are properly maintained and one gets the best from these professional accountants. By handing over the work to accountant New York, one can be rest assured that the work will be done in a proper manner. Maintenance of daily record of transactions is crucial to draw conclusions about the financial status of the business. Accountant New York helps in accomplishing this task. Since a business owner has to see all the aspects of business, so there is very less time left to see the accounting work. Giving the work to accountant New York, he can reduce his workload.

An accountant who is hired from accountant New York firm is ready to work towards the profits of the clients whom he is serving. The accountants at accounting New York firm are specialized in their work and have an updated knowledge about the changing accounting rules and regulations. They work and maintain the books of accounts according to the changing rules and regulations. The software used by the professional accountants is latest and up to date. The accountants at accountant New York provide all crucial details of a transaction that the firm has to bear in a particular time period. The task done by the professionals at any accounting firm involves keeping a check on the invoice generation, billing statements, payment records, trial balance, profit and loss account, balance sheet etc. It is the working of the accounting department that can make or break the success of the business. Accounting department has to be conscious and alert about any transaction that the company bears.

In case of maintaining accounts, accuracy is needed. Accountant New York takes into consideration this important aspect. By hiring an accountant from accountant New York can not only help the business to get the accurate accounting details but also helps to relax and have an eased out accounting session. Accountant New York acts as a guide towards a successful business. Professionals working at accountant New York are thorough with all aspects of accounting and book keeping, so they can prepare the books of accounts in the most efficient manner. A highly efficient accountant can give the business a right direction. The professionals at accountant New York fully understand the concept of your business and can help the business to reach new dimensions.

i shot my accounting book arter school this year
Video Rating: 3 / 5

Cash Accounting or Accrual Accounting

The tax authority require bookkeeping records to calculate the tax due. The choice for small business is basically cash accounting or accrual accounting each of which has advantages and disadvantages.

The date of the sales invoice and the date of purchase invoice are known as the tax point. The tax point does not determine the spread of that transaction over the tax period which can be different when accounts are prepared on an accruals basis as opposed to a cash basis.

For the purposes of cash accounting the effective inclusion of the transaction in the financial records is the date the cash or bank receipt or payment was made. The tax point date on the document is not the deciding factor to include the item in the accounts. The date the amount was paid out or received into cash funds or bank account is the date to be used fopr inclusion in the accounts.

There are disadvantages to maintaining accounts on a cash basis in that records must be kept of all payments received and paid out and those records supported by the actual primary accounting documents to which they relate. That entails matching the financial documents to the payments and receipts records, a feature many small businesses might find onerous as record keeping ios often regarded by samll business as an administrative burden.

Virtually all professional accountants adopt an accruals basis for clients accounting purposes as it is based upon recording all financial information whether relevant to the tax period or not and then adjusting the management accounting profit indicated to produce the net taxable profit or loss.

By operating an accruals basis all financial documents are recorded according to the tax point date. If every transaction was paid or received within the year then the cash accounting and accruals basis would produce the same tax accounts.

The main adjustment a small business or the accountant might make to accounts prepared on the accruals basis is to first prepare the set of accounts according to the tax point of the primary accounting records and then examine those transactions and adjust them according to their relevance to the financial period for which the accounts are being prepared.

A typical example of the difference would be the rent invoice for the business premises. Let us assume a quarterly rent invoice was received dated 1 December for the 3 months from December 1 to February 28 which was paid by the small business owner by cheque on December 31 and a year end date also of December 31

On a cash basis the rent would not technically be included in the accounts as it would be shown as a rent payment from the business bank account on January 2 or later if cashed by the recipient at a later date. Therefore that quarters rent would be included in the following year accounts not the current year as issuing a cheque is not a payment but actually a promise to pay.

Assuming the rent was paid in cash prior to the 31 December then the whole 3 months rent would be included in the current financial year. That treatment may have distorted the accounts as more or less than 12 months rent might have been included in the tax calculations.

On an accruals basis the rent invoice would have been entered in the accounting records with an effective date of December 1. The accountant or small business owner preparing the accounts would deduct 2 months from the qaurterly amount leaving one months rent in the current year accounts with the other 2 months being included the following year.

That is more accurate as the other side of the accounting would be for that same accountant or bookkeeper to further include the 2 months rent not already claimed to be included in the tax calculation for the next financial year. Mvoing the prepayment not specific to the accounting period is how business treats a prepayment under accrual accounting.

When operating cash accounting only transactions actually paid for or received are valid. On an accruals basis provisions can be made for costs incurred by the business whicvh have not yet been invoiced.

Cash accounting might appear easier but has the disadvantage of maintaining receipts and payments records in addition to the primary documents which should also be matched to the financial transactions to support the accounts.

Accrual accounting is based upon recording all financial transactions and then adjusting the end result to determine the most accurate net taxable profit. The accruals basis is favoured by accountants as it reaches an accurate tax liability as opposed to more or less tax being payable on the cash basis according to the credit control policies and practises of the business its suppliers and clients.

Rep. Elijah Cummings (D-MD) and Chairman Henry Waxman of the Committee on Oversight and Government Reform question witness on the accounting arrangement that led to .8 billion in missing funds.
Video Rating: 4 / 5