Making a Difference

Annual Report | 2014-2015

Making a Difference
Annual Report | 2014-2015

Letter from the President & CEO and Chair........................................................................................... 4

Management’s Discussion and Analysis................................................................................................... 10

CPA Canada’s Mission
Acting in the public interest...................................................................................................................... 12
Supporting our members........................................................................................................................... 13
Contributing to economic and social development...................................................................... 16

Operating Environment.................................................................................................................................... 30

Financial Performance....................................................................................................................................... 40

Governance of CPA Canada........................................................................................................................... 42

2014–2015 Board of Directors......................................................................................................................... 43
CPA Canada Management Committee...................................................................................................... 45

Financial Statements.......................................................................................................................................... 46

Table of Contents 3
 Letter from the President and
CEO and Chair

Unification is making a difference!

The Canadian accounting profession made history in fiscal 2015 with the creation
of a single national Chartered Professional Accounting body representing
Canada’s 190,000 professional accountants. It happened on October 1, 2014,
when CGA-Canada’s domestic and international members, students, staff
and volunteers joined CPA Canada. Being the national body for Canada’s
only business and accounting designation—and one of the largest accounting
bodies in the world—is making a difference. CPA Canada now has the influence,
recognition, resources and reach to deliver more to our members, students,
other stakeholders and, of course, the public.
Kevin Dancey, FCPA, FCA
President & CEO
While unification of the Canadian accounting profession is rapidly progressing,
proclamation of CPA legislation in all Canadian jurisdictions is not expected
until 2016. Yet the benefits of a single, unified profession are no longer merely
a promise. They’re becoming reality.

CPA Canada, Bermuda, and the CPA provincial and territorial bodies worked
closely together during the past year to establish the strategic framework
needed to realize the benefits of a new, single and united Canadian CPA
profession. Leaders of the profession developed a shared vision, mission and
set of member values, while also agreeing on the mandate for the respective
bodies governing the new CPA profession.

Bob Strachan, FCPA, FCMA

Chair

4 CPA Canada Annual Report 2014-2015

Our Strategic Framework
Vision
The Canadian CPA is the pre-eminent,
globally respected business and
accounting designation

Mission
CPA Canada enhances the influence,
relevance and value of the Canadian CPA
profession by:

• Acting in the public interest

• Supporting its members

•  ontributing to economic and

C
social development

Key objectives
• Act in the public interest

•  e a leader in accounting and

B
business education

• Expand and satisfy the demand for high

quality business and accounting professionals

• Be the most valued and trusted resource
relied on by members, students and key
stakeholders

• Foster member pride and engagement


•  e recognized as a leading influential voice
B
in Canada and for the profession globally

• Foster organizational effectiveness

Letter from the President and CEO and Chair 5

 With those essential building blocks in place, CPA level. All of these volunteers are benefiting from
Canada defined its own strategic plan and worked improved co-ordination and support thanks to a new
with its approximately 360 employees across its volunteer management program.
four primary locations in Ontario, British Columbia
and Quebec to define CPA Canada’s organizational
values. We also worked with the provinces to ensure Making a difference by delivering
our international members living in the U.S., Asia Canada’s premier business and
and the Caribbean are supported and part accounting education programs
of the Canadian CPA profession The Canadian CPA is more than
through membership in the an accounting designation—
provincial and national it’s also a business credential
bodies and through the and it recognizes that
establishment of new accountants must not
chapters in Asia and only measure value,
the Caribbean that but also create
connect these value. Our shared
groups of members vision signals
with each other the profession’s
and other CPA Canada commitment to
Canadian CPAs. Organization graduating CPAs

CPA Canada’s Values who are highly

members are all
enjoying improved
services provided
by the national body
that help them connect,
build their careers and
give back to the profession
and their communities. Through
the new CPA Canada website,
customizable preference centre and
integrated enewsletter, Member News, members can
specify the news and resources they want to receive.
CPA Canada is providing new practice and information
tools to help all its members.
CPA Canada is also working directly with members to
develop relevant programs, products and services, while
also engaging members who want to demonstrate the
value of the profession. By the end of fiscal 2015, more
than 800 CPA volunteers were engaged in supporting
the profession through 128 committees, boards and
advisory groups. In addition, more than 11,000 members
are now registered to deliver CPA Canada’s award-
winning Financial Literacy Program at a community
skilled in both
accounting and
business, as well as
leadership, strategy
and professionalism.
One of the most
significant benefits related
to unification of the profession
this year is the establishment of
high-quality, highly respected CPA
education programs.
This year marked some impressive educational
program accomplishments including:
• The CPA Professional Education Program (CPA
PEP) was launched across Canada in both English
and French in the fall of 2014. It was also launched
in the Caribbean and Bermuda and the first CPAs
are set to graduate this fall. Enrolment in the CPA
prerequisite program, launched in fiscal 2014,
exceeded expectations. This intensive accelerated
bridging program is designed for those who have
an undergraduate degree but lack some or all of
the requirements for entry into the CPA PEP.

6 CPA Canada Annual Report 2014-2015

• T
 he CPA Canada Advanced Certificate in
Accounting and Finance (ACAF) has been
developed and will be launched this fall. Designed
for individuals who do not wish to pursue a CPA
designation, it qualifies graduates for mid-level
positions in business, industry, government and
public accounting.
• CPA Canada’s high-quality professional learning
and development programs designed to help our
members bolster their careers were expanded
this year through online offerings. Another big
accomplishment this year was CPA Canada’s The
One National Conference that brought together
more than 1,000 CPAs from the three legacy
professions to learn, network and share knowledge.
Making a difference—in Canada and globally
With the profession acting and speaking as one,
stakeholders in Canada and around the world are
acknowledging the value of the Canadian CPA profession
in important ways. The Canadian profession’s enhanced
domestic and international influence benefits our members
and helps CPA Canada deliver on its mission to contribute
to economic and social development.
We experienced this during the past year in a number
of ways, including:
• Prime Minister Stephen Harper visited CPA Canada’s
Toronto office in August 2014 for meetings with
our CEO and Chair, as well as the CEOs of national
accounting firms, taking time to also visit with
our employees.
• A new era of greater co-operation and collaboration
with the Canada Revenue Agency was realized
through a framework agreement, signed in November.
The agreement calls for an enhanced working
relationship to help Canada maintain a world-class
tax system, with the best interests of taxpayers as
the key priority.
• As a united profession, our knowledge and
expertise is sought by many stakeholders. Among
the opportunities, we assisted the government in
developing its three-year strategy to discourage
participation in the underground economy. Our
VP Corporate Citizenship was appointed to the
National Steering Committee on Financial Literacy.
We also participated in consultation sessions held
by the external Regulatory Advisory Committee
tasked with ensuring the federal government’s
account of its red tape reduction efforts is reliable.
• CPA Canada supported the federal government’s
activities on the international stage, with our VP
Education Services joining our nation’s trade
mission to South Korea to explore opportunities
created by Canada’s new free-trade deal with that
country. Our VP Taxation joined National Revenue
Minister Kerry-Lynne Findlay on a two-day trip to
the United Kingdom to discuss tax compliance
and the needs of small business.
• We continued to collaborate with the Canadian
standards boards and provincial and territorial
bodies to provide guidance and support for the
application of accounting and audit standards.
• CPA Canada expanded its presence on the global
stage, with key appointments to several international
standard-setting boards and governing bodies,
including two members to the board of the
International Federation of Accountants (IFAC). We
also entered into a memorandum of co-operation
with the Chinese Institute of CPAs to work together
on a number of initiatives.
• We reinforced numerous alliances and sponsorships
with leading organizations to support best practices
and raise the profile of CPAs. One example is the
memorandum of understanding that we signed with
the Institute of Internal Auditors of Canada (IIA) to
strengthen co-operation and collaboration between
the two organizations. CPA Canada and the IIA have
already begun working together on a number of
mutually beneficial activities that will enhance the
CPA profile and provide value for our members.
Letter from the President and CEO and Chair 7
 Poised to make an even bigger difference
Throughout this report we address the way unification
has helped CPA Canada enhance its ability to
strengthen the profession’s capacity and effectiveness—
through high ethical standards, shared vision, mission
and values, and superior skills and resources. This is
the work we do on behalf of our members, and our
community. And we’ve only just begun. We have an
ambitious agenda for the year ahead as we continue
to grow in size and influence.

None of what we have accomplished during the year,

or will accomplish in the future, could be possible
without the hard work, energy and dedication of our
members and volunteers, employees, and provincial
and territorial partners who have committed to making
us one profession—united and uniquely Canadian. We
thank all for their commitment and belief in the new
Canadian CPA profession.

Kevin Dancey, FCPA, FCA

President & CEO

Bob Strachan, FCPA, FCMA

Chair

8 CPA Canada Annual Report 2014-2015

Making a difference:
Delivering top-quality education in business and accounting
CPA Canada is making a difference in the professional
education marketplace by offering multiple opportunities
to people seeking careers in business and accounting.
New certificate focuses on job-ready
accounting skills
The CPA Canada Advanced Certificate in Accounting
and Finance (ACAF) will launch in the fall of 2015. It is
designed for new college graduates, people working in
accounting without a designation, and internationally
trained accountants who want to work in Canada
but who do not wish to pursue a CPA designation.
It focuses on the job-ready skills that employers
need within the accounting and finance functions of
their businesses. Internationally, ACAF offers foreign
students a clear route to a recognized certificate,
helping improve their prospects in their home countries
and opportunities in Canada.
F
A
The CPA Canada
AC
Advanced Certificate
in Accounting and
Finance (ACAF) will
launch in the fall of 2015.
CPA PREP and CPA PEP programs
launched nationwide
The CPA Prerequisite Education Program (CPA PREP)
is an intensive, accelerated bridging program for
people who have an undergraduate degree but lack
some or all of the necessary requisites for admission
to the CPA Professional Education Program (CPA PEP).
Now in its second year, enrolment in the CPA PREP is
exceeding expectations.
The CPA PEP, the CPA profession’s flagship program,
provides students with the education necessary to
prepare them for certification as a CPA. The program
is now offered nationally, as well as in the Caribbean
and Bermuda, with the first newly minted CPAs set
to graduate in the fall of 2015. These students will
be the first to write the Common Final Examination,
the CPA profession’s national three-day certification
examination.
Mentors inspire the next
generation of CPAs
As part of the new CPA Practical Experience
Requirements issued in 2014, all aspiring CPA
candidates must be mentored by a CPA. Volunteer
CPA mentors are key to ensuring that aspiring CPAs
gain the practical experience they need to earn the
CPA designation. CPA Canada’s new mentorship
program, which debuted in September 2014,
attracted 5,350 potential recruits.
New North American specialty
area credentials
Two new specialty area credentials were introduced
to members during the year in collaboration with the
American Institute of Certified Public Accountants
(AICPA). The new credentials, Certified in Financial
Forensics (CFF) and Certified Information Technology
Professional (CITP), supplement Canada’s Corporate
Finance (CF) credential in supporting members
working and advising in specialty areas.
Helping foreign-trained accountants
In addition to promoting our ACAF certificate
internationally, we offer credential recognition and
pre-arrival support. This year, we launched the
CPA Canada Guide to Accounting Business Culture,
an online program that introduces newcomers to
Canadian business norms in a range of practical areas,
including resumé writing and interview skills. We are
also enhancing our transfer credit database so that
foreign students can have their credentials assessed
more quickly and consistently.
CPA Canada Annual Report 2014-2015 9
 Management’s Discussion
and Analysis
What follows is a discussion of CPA Canada’s key
objectives, major activities and achievements for
fiscal 2015, as well as its financial position, results
of operations and cash flows for the year ended
March 31, 2015. Management’s Discussion and
Analysis should be read along with the audited
financial statements and the accompanying notes
for the same year-end.
event that linked employees in Burnaby, Toronto, Montreal
and Ottawa for the first time. The celebration signalled
our final shift from unification to integration, and its
cross-country format embodied our new emphasis
on connectivity, using enhanced technology and
communications platforms to enable collaboration
across all our locations.

From unification to integration

CPA legislation is proposed or in place in almost all
jurisdictions and the new designation is being used
by more than 160,000 of our members. The new
CPA certification program has been rolled out across
Canada and the Caribbean, and the first Common
Final Examination will be held this fall. We continue
to support more than 30,000 CPA and legacy CGA,
CMA and CA students as they complete their
respective certification programs.

The integration agreement between CPA Canada

and CGA-Canada, effective October 1, 2014, marked
the final step in uniting the profession at the national
level. To kick off the celebration, Pat Keller, Chair of October 1, 2014. Signing of integration agreement between
CPA Canada and CGA-Canada. Left to right: Kevin Dancey,
CGA-Canada and Joyce Evans, former Chair of
Bob Strachan, Pat Keller, Joyce Evans.
CGA-Canada, took the stage with CPA Canada Chair
Bob Strachan and President and CEO Kevin Dancey
for the official signing, and we then welcomed our
newest employees as part of an interactive video

10 CPA Canada Annual Report 2014-2015

Collaboration in action to sit on the IFAC board. Our contributions to
As new CPA provincial bodies were created, they IFAC have impact worldwide in advancing the
became Organization Members of CPA Canada. promotion of quality professional standards and
Together we collaborated on initiatives of benefit to the development of robust international economies.
the profession such as strategy, branding, education,
public trust and member engagement. Guiding these Negotiating mutual recognition agreements (MRAs)
endeavours were the Council of Chairs and Council with leading accounting bodies around the world
of Chief Executives, which bring together the leaders boosts mobility opportunities for members and
of the provincial, territorial and national bodies. recognition of Canadian CPAs. These MRAs also help
facilitate the recognition of foreign-qualified accountants.
One of the first joint initiatives was to develop a
common strategic framework, including a new mission, In 2015-16, our newly constituted International
vision and member values for the profession. Qualifications Appraisal Board will begin reviewing the
legacy MRA agreements and work to identify potential
new agreements on behalf of the CPA profession.
Taking our place on the international stage
With our combined membership of more than
190,000, CPA Canada is now one of the world’s
largest professional accounting bodies. With Canadian
CPAs sitting on a number of influential international
accounting bodies and more than 8,000 of our
members working internationally, we’re well placed
to increase our influence globally.

Our increasing global emphasis not only allows us

to offer greater support to our members, but raises
our visibility with foreign accounting bodies,
regulators, educators and businesses.

Our global influence is enhanced by our strong

representation on key global accounting bodies.
For the 2014 and 2015 calendar years, 13 CPA
members served on International Federation of Carol Bellringer, auditor general of British Columbia and Joy
Accountants’ boards and committees. In 2015, Thomas, executive vice-president of CPA Canada represent the
Canadian CPA profession on the IFAC board.
CPA Canada was one of only two accounting
bodies with more than one member appointed

CPA Canada’s Mission:

CPA Canada enhances the influence, relevance and value of the
Canadian CPA profession by:
• acting in the public interest;
• supporting our members; and
• contributing to economic and social development

Management’s Discussion and Analysis 11

 Acting in the public interest
Acting in the public interest: What we do and
how we do it
CPA Canada, through its predecessor
organizations, has a long history rooted in
commitment to activities that benefit Canadians,
businesses and the country. We fund the
development of Canadian accounting and
assurance standards and the work of the
independent standard-setting boards and
oversight councils that have long made Canadian
capital markets safe, transparent and the envy of
countries around the world. We develop guidance
and practice documents that help ensure Canadian
businesses and other organizations thrive. And  as a leading resource. In fact, IFAC has published
we ensure that Canadians have access to
the learning tools that provide them with the
information they need to better manage their
finances and prosper in today’s economy.
Supporting standard-setting and implementation
CPA Canada is a vital supporter of standard-setting
in Canada and globally.
In Canada, there are more than 125 volunteers on
standards oversight councils, boards, committees
and task forces that participate in the standard-
setting process. In fiscal 2015, CPA Canada provided
$9.3 million in financial support for standard-setting,
including the activities of the Accounting Standards
Boards, Public Sector Accounting Board and Auditing
and Assurance Standards Board, and their independent,
public oversight through the Accounting Standards
Oversight Council and the Auditing and Assurance
Standards Oversight Council.
Beyond our borders, CPA Canada contributes
$2.5 million to standard-setting through its support
for the International Accounting Standards Board
(IASB), International Public Sector Accounting
Standards Board (IPSASB) and International Federation
of Accountants (IFAC).
We develop non-authoritative guidance to help financial
statement preparers, auditors, directors and investors
in Canada apply reporting and assurance standards.
12 CPA Canada Annual Report 2014-2015
For example:
• In 2015, CPA Canada continued to promote
improvements in audit and assurance quality,
liaising with the Auditing and Assurance Standards
Board and collaborating with the Canadian Public
Accountability Board and other stakeholders to
address applying Canadian audit standards.
• Our Viewpoint series of publications features
practical information and examples to help members
better understand accounting issues facing the
extractive industries, which constitute a vital sector
of Canada’s economy.
• Our Guide to IFRS in Canada is globally recognized
CPA Canada’s International Financial Reporting
Standards (IFRS) guidance as a model for others.
• Our Guide to Accounting Standards for Private
Enterprises is one of the most substantive
resources available for preparers and assurance
providers of private company financial statements.
• We provide tools and alerts to assist Canadian audit
practitioners in the application of audit standards.
• Partnering with the Canadian Public Accountability
Board, we advanced our initiative on enhancing
audit quality. We held the first of what will become a
national series of roundtables with senior Canadian
audit committee members, hosted by some of the
larger Canadian accounting firms in 2015-16.
Protecting our capital markets and economy
CPA Canada leads a variety of collaborative initiatives
that aim to defend and strengthen the nation’s
economy and finances.
We continued to act in the public interest by
contributing to the fight against money laundering
and the financing of terrorists. This included publication
of a compliance guide by CPA Canada’s Anti-Money
Laundering and Anti-Terrorist Financing (AML & ATF)
Committee and working with the Financial Transactions
and Reports Analysis Centre of Canada (FINTRAC), the
regulator in charge of Canada’s AML & ATF regime.
Our committee’s chair appeared before parliamentary
committees to address proposed changes to AML
& ATF legislation, and we responded to FINTRAC’s
proposed guidance on the Risk-Based Approach to
Money Laundering and Terrorist Financing.
Partnering with Natural Resources Canada, we are
identifying the ways CPAs can help organizations
adapt to the risks and opportunities related to a
changing climate, to enhance the competitiveness
of Canadian organizations and our overall economy.
The project will deliver case studies, guidelines
for existing CPA competencies, and professional
development opportunities.
CPA Canada is teaming with the Ivey Foundation and TD
Bank for a Natural Capital Innovation Lab that will explore
ways to best value, manage and make decisions regarding
one of Canada’s most critical assets—our natural capital.
Supporting our members
Supporting our members: What we do and
how we do it
Using our new online preference centre, members
and students can select topics and interests they
want, and control how they receive communications
from CPA Canada. The organizational enewsletter,
Member News, can be customized based on the
preferences of each reader. This dynamic publication
integrates a number of previous enewsletters and is
distributed monthly to 210,000 subscribers. This year
we also expanded our social media presence with a
new Facebook page and increased our engagement
on LinkedIn and Twitter.
As a result of integration, the Canadian Professional
Engagement Manual (C-PEM) and the Public
Practice Manual formerly published by CGA-Canada
are being redeveloped as the Professional Engagement
Guide. This new practitioner resource will combine
the best of both manuals and be released in fall 2016.
In the interim, we have created a series of video
vignettes, featuring step-by-step instructions to
help practitioners complete key forms effectively
and efficiently.

CPA Canada is committed to enhancing the value

of Canadian CPAs in all aspects of their careers.
We create learning programs, practical resources
and access to business and social networks that
empower our members to excel at each step
in their careers. We actively represent the
unique needs of our members at home with the
federal government and in international forums,
providing a strong, influential voice in the setting
of international accounting standards, trade
and mobility agreements, and other regulatory
practices. We proactively promote domestic and
international recognition of the value of Canadian
CPAs as pre-eminent, globally respected business
and accounting professionals, who are trusted to
help organizations succeed and to do what is right.

Delivering news and knowledge

CPA Canada delivers important news and updates to
keep our members current on emerging issues and
help them professionally.

Management’s Discussion and Analysis 13

 #1.
#5. Creating a Rolling Forecast: 9,907
toP FivE
WEBinARS
2014
#4. Expense Fraud: 10,390
Our hugely popular webinars continued to achieve
great results, both in terms of attendance and satisfaction
ratings. There were 81 webinars produced this year, with
a 92% satisfaction rate from the 330,000 registrants.
CPA Magazine also achieved an important milestone,
completing its first full year in production. The magazine
was nominated in two categories for the 38th National
Magazine Awards, which celebrate excellence in Canadian
magazines. The publication also earned 20 nominations
for the 2015 Kenneth R. Wilson magazine awards, which
honour business-to-business publications, and won
six awards, including gold for Best Issue (The Money
Issue, May 2014).
We also tapped the knowledge and sentiment of the
business community through events and surveys,
including our quarterly Business Monitor.
Helping members support Canada’s
not-for-profit sector
CPAs are huge supporters of Canada’s not-for-profit
sector, donating time and money to help not-for-profit
organizations (NFPs) pursue their social missions
and philanthropic goals. CPA Canada supports these
members and the sector by developing guidance
for directors and managers of NFPs. In 2014-15, we
delivered new publications in our 20 Questions Directors
of Not-for-Profit Organizations Should Ask series. Our
2015 Not-For-Profit Financial Executive Forum addressed
the key challenges facing today’s NFP executives.
NFPs also look to CPA Canada for examples of
how to apply NFP accounting standards. We have
developed model financial statements for NFPs.
14 CPA Canada Annual Report 2014-2015
#2. Brain-ability at Work: 10,982
#3. Executive Presence: 10,482
Moreover, CPA Canada’s annual report embodies
the latest guidance and thinking on quality NFP
financial reporting.
Helping members gain new skills and
meet evolving demands
Positioning our members for the future requires a
broad approach. Our 2014-15 initiatives included:
• Enabling sustainability reporting: We presented
members with guidance and support through
publications, webinars, presentations and conferences,
including The Starter’s Guide to Sustainability
Reporting, to help organizations expand disclosure.
• Integrated reporting: While monitoring global
developments, we fostered awareness and shared
information on integrated reporting through
a webinar, presentations to users and working
groups, and conference sessions.
• Drivers of Change: This collaborative research
project aims to identify the key forces influencing the
future of business and finance to help the profession
prepare members and students for the future.
A clear highlight of our support for members—and
a compelling testament to the depth and breadth of
the profession—was The One National Conference
in September 2014. The annual event provided an
unprecedented learning experience, bringing together
more than 1,000 CPAs from all streams for two days
of important updates on new developments and their
business implications, thought-provoking keynote
addresses and networking opportunities.
 1

2 3 4

5 7

One thousand participants gathered in Toronto for CPA Canada’s The One National Conference in September 2014. 1. Full house for
keynote session. 2. CPA Canada’s Tashia Batstone, vice-president, education services, presents at the conference. 3. Meeting members at
the CPA Canada booth. 4. Jeremy Gutsche, innovation expert and CEO of trendHunter.com, gives a keynote address. 5. Pam Robertson,
conference organizer and principal with CPA Canada, and Daniel Muzyka, CEO of the Conference Board of Canada. 6. The Hudson Bay
Company’s vice-chair, Bonnie Brooks, addresses the crowd during a keynote address. 7. Kevin Dancey, CPA Canada’s president and CEO,
addresses the crowd.

Management’s Discussion and Analysis 15

 Contributing to economic
and social development
CPA Canada’s Mission – Contributing to
economic and social development

As an organization representing more than

190,000 professionals with a passion for
doing what is right for both businesses and
communities, CPA Canada is committed to
enhancing the overall economic and social
fabric of Canada. We do this by building strong
relationships with other thought leaders in
business, finance and government, and with
influential regulators, academics and not-for-
profit organizations, to provide information,
ideas and inspiration. We believe that through Looking back at the launch of the Accounting Mentorship
Program founded by CPA Canada and the Martin Aboriginal
collaboration we can contribute to a Canadian Education Initiative with former prime minister Paul Martin (left)
knowledge philanthropy bank that will help and Kevin Dancey, president and CEO, CPA Canada.

elevate the collective prospects of individual

Canadians and ensure a sustainable future
for Canada.

Investing in knowledge philanthropy and finding • Aboriginal support: We continued to work

ways to contribute to Canada’s economic and
social development
• Knowledge philanthropy: Our new Knowledge
Philanthropy group develops research-based
studies and policy papers that contribute to
important debates about economic and social
issues affecting Canadians, Canadian business
and our economy.
• Special projects: CPA Canada is also involved with
• Defining ethical frameworks for new challenges:
We partnered with the University of Toronto to
engage professionals in medicine, law, education,
engineering and accounting in discussions on
competencies in professional judgment and
ethical decision-making.
• Encouraging entrepreneurialism in Canada:
We presented key guidance and strategies from
some of North America’s top business owners
and leaders through our Business Insights, a
new resource.
with the Martin Aboriginal Education Initiative
on a mentorship program where accounting
professionals act as mentors to Aboriginal high
school students to help them achieve academic
success. The initiative also offers continued support
as the students seek a post-secondary education
and to provide guidance in career choices.
the international Accounting for Sustainability
Project (A4S), which solidifies our commitment
to engage with global accounting and business
leaders in the area of sustainability. Through our
ongoing research and participation with A4S,
CPA Canada can bring leading-edge information
and ideas to our communities

16 CPA Canada Annual Report 2014-2015

Household finances in Canada Report

53%

of non-retired households
said they did not save on a regular basis

In light of falling oil prices and other signs of a weakening economy, CPA Canada
commissioned a public opinion poll of 1,500 Canadian adults in the winter of 2015 as
a follow-up to a similar survey conducted in the spring of 2014. The resulting study
provided an excellent opportunity to gauge if Canadian households were viewing
their financial position differently in the shifting marketplace and highlighted the
financial vulnerability of many Canadian households.

Management’s Discussion and Analysis 17

 Making a difference:
Improving Canada’s tax system
A single, clear voice to advocate for our members
and the public interest is one of unification’s biggest
advantages, and it is making a difference in our
representations on tax issues. CPA Canada has
committees covering 11 unique areas of tax, with more
than 100 volunteers.
Our formal collaboration agreement with the Canada
Revenue Agency, signed in November, heralded a
new era of greater co-operation and collaboration.
The arrangement calls for an enhanced working
relationship to help Canada maintain a world-class tax
system, with the best interests of taxpayers remaining
a key priority. The agreement sets a framework for
continuous engagement and closer collaboration.
Seven joint CRA-CPA committees established under
the agreement now serve as constructive forums
for working together on a broad range of issues of
common interest.
November 26, 2014: Historic agreement signed by CPA Canada and the Canada Revenue Agency. Left to right: Andrew Treusch,
commissioner and CEO, CRA; Kerry-Lynne Findlay, national revenue minister; Kevin Dancey, president and CEO, CPA Canada.
18 CPA Canada Annual Report 2014-2015
Unification has also enabled us to reach out to a broad
range of stakeholders. CPA Canada:
• consulted on the design of the Canada Revenue
Agency’s Registration of Tax Preparer Program
and brought together diverse organizations with
distinct interests, including national professional
services firms, H&R Block, Liberty Tax Services and
the EFILE Association of Canada;
• joined forces with the Investment Industry
Association of Canada to advocate for changes to
Canada’s unduly complex reporting requirements
for foreign property income; and
•  ade representations to the Finance Department and
m
the CRA on a number of issues, including persistent
problems with the filing deadlines for trusts and the
impact on preparing personal tax returns.
Promoting top-quality tax professionals
The first cohort of students in our redesigned
In-Depth Tax Course entered their final year in the
fall of 2014. The program culminates with the Year
3 project, which sees students working in groups to
develop a single, comprehensive case study that
brings together and builds on concepts learned
throughout the course.
CPA Canada also began developing a new core
tax education path that aims to bridge the gap
between the In-Depth Tax Course and more
advanced offerings. New intermediate courses that
are in the works will cover important areas such
as corporate reorganizations, international tax and
dispute resolution.
As well, we are pilot testing Best Practices in Tax,
an initiative to help tax services practitioners,
particularly small- and medium-sized practitioners,
with the design of standard processes and
procedures that will minimize error, reduce risk
and improve efficiency.
tax
Ad
min
Tax Administration
CRA-CPA
JOINT COMMITTEES
Compliance
Red Tape
Pursuing confidentiality rights for accountants
CPA Canada continues to advocate for taxpayers
to have access to tax advice on a confidential
basis. We propose balancing the taxpayer’s right to
confidentiality with the Canada Revenue Agency’s
obligations to protect the tax base.
Defining the future of tax policy
CPA Canada stepped up its efforts to bring clarity to
the important issues of tax evasion and avoidance
with a white paper on the topic. We joined senior
federal Finance Department and CRA officials in a
Canadian Tax Foundation discussion on the OECD’s
plan to address tax base erosion and profit shifting
globally. We co-sponsored with the C.D. Howe
Institute a tax policy paper written by Kevin Milligan,
associate professor of economics at the University
of British Columbia, on possible reforms to the
Canadian tax system. The paper was awarded the
2014 Doug Purvis Memorial Prize by the Canadian
Economics Association. In addition, CPA Canada has
a representative on the federal government’s special
committee on the underground economy.
Service Training
Commodity Tax
Scientific Research &
Experimental Development
Management’s Discussion and Analysis 19
 Making a difference:
Showcasing the value of Canada’s CPAs
National unification has helped CPA Canada emphasize
the value of the CPA designation. The message is
clear: CPAs are smart professionals you can trust to
meet your business and financial needs. Our effort to
increase awareness of the CPA brand and to publicize
what our members do for companies and individuals is
also helping with recruitment.
The fiscal 2015 ad campaign heightened awareness by
playing on the word “pro”—as in “PROfessional,” and
by using clever wordplay to create strong impressions
August 2014. Prime Minister Stephen Harper (right) is welcomed by Kevin Dancey, president and CEO, to the CPA Canada offices.
20 CPA Canada Annual Report 2014-2015
about the value CPAs provide. Unaided awareness
among key stakeholders—a measure of how business
owners, managers, professionals and entrepreneurs
perceive CPA without prompting—stood at 22%
nationally in 2014-15, which is a strong showing for
the second year of a newly launched brand. The
research also showed the business community is
already recognizing CPAs to be respected business
professionals who are trustworthy, have integrity, and
have strong financial competencies and technical
business skills.
Our media relations team is strengthening CPA
Canada’s reputation as an authoritative source of
commentary and advice for the media. Reporters
increasingly look to CPA Canada’s thought leaders
for insight into such issues as financial literacy, the
economy and the federal budget.
We issued 31 news releases in 2014-15. Media coverage
for the organization garnered more than 13.9 million
media impressions in 2014, up from nine million the year
before. Our series of publication-ready articles placed
with the content marketing firm Fifth Story in fall of
2014 continue to be picked up extensively. In total,
CPA Canada reached more than 1.2 million readers as
we highlighted the value of the profession and its
members in newspapers, magazines, and online across
Canada and globally.
CPA Canada’s united voice and combined strength in
federal government relations allowed the profession
to cement its reputation as a trusted adviser to
senior officials.
Prime Minister Stephen Harper visited CPA Canada’s
Toronto office in August 2014 for meetings with our
President and Chair, as well as the CEOs of national
accounting firms. He also took time to meet with staff.
This marks the first time a sitting prime minister in an
official capacity has visited a Canadian accounting
body, further evidence that a united profession is being
recognized and is more influential.
Getting our message out worldwide
Similarly, we are raising our global profile, taking our
seat at the table alongside international business
groups and contributing to submissions on international
policy by groups that include the Business and Industry
Advisory Committee to the Organization for Economic
Co-operation and Development’s tax committee, and
the American Chamber of Commerce in Canada.
CPA Canada’s submission on unification of the
profession was included in IFAC’s international
milestones project. It was part of a project gallery
at the 2014 World Congress of Accountants depicting
CPA Canada and its key objectives.
The International Federation of Accountants (IFAC)
Knowledge Gateway provides links to third-party
websites of leading accounting bodies. Through this
network of resources, accountants and business
professionals from around the world have access
to relevant and timely publications, guidance, and
thought-leadership pieces that affect the accounting
profession and the global business landscape. During
this past year several CPA Canada publications were
recognized by IFAC for the value they provide and
were posted to the gateway.

CPAs also secured their roles as trusted advisers to

senior government officials, during a series of cross-
country, federal-provincial roundtables when CPAs
were asked to provide input on specific federal policies,
programs and services.

The profession is also active on the policy front, making

submissions to, and appearances before, the House of
Commons Finance Committee and facilitating member
engagement in a series of roundtable discussions on
reducing red tape.

Management’s Discussion and Analysis 21

 CPA Brand

The CPA profession monitors a number of core measures that enable tracking of progress in
building awareness and recognition of the value of the Chartered Professional Accountant
brand. These measures are tracked annually through research undertaken by a third party and
then compiled into a dashboard for easy review. The results of the most recent research are
provided here. Information for 2014 is based on the surveys conducted in March and April of
2014; information for 2015 is based on the surveys conducted in February and March of 2015.
Mean score is based on a 7-point scale.

Attributes of CPAs
CPAs get high scores from the business community and affluent households.

Business (2015) Affluent Households

Are trustworthy 6.1 5.0

Respected business professionals
Demonstrate integrity 5.9 Are trustworthy 5.6
Demonstrate strong business skills 5.9
and financial capabilities Demonstrate integrity 5.2

Respect business professionals 5.8 Demonstrate objectivity 4.8

Demonstrate objectivity 5.5 4.5

Demonstrate good strategic thinking
Demonstrate good strategic thinking 5.5 Demonstrate strong business skills 4.5
and financial capabilities
Demonstrate the drive to create value 5.3
Demonstrate the drive to create value 4.2
Strong team players 5.1 Strong team players 4.2

Disagree Agree 2015

Disagree Agree 2014

22 CPA Canada Annual Report 2014-2015

 Impression of PROFESSIONAL ACCOUNTANTS
Affluent households and stakeholders have a favourable impression of professional accountants.

Affluent Households
Stakeholders (2015)
5.0
Professional accountants
5.6 Professional accountants 5.8
Physicians
Notaries 5.2 Professional engineers 5.6

Professional engineers 5.1 Financial analysts 4.9

MBAs 4.8
MBAs 4.7
Financial analysts 4.5
Lawyers 4.4
Financial planners 4.5
4.3 Bankers 4.2
Bankers
Lawyers 4.2 Financial planners 4.0
Investment brokers 4.2 Insurance advisers 4.0
Insurance advisers 4.1
Investment brokers 3.4
2015
Negative Positive 2014

CONFIDENCE INDEX
Members and students increasingly recognize the value of the CPA designation.

Members Students

Proud identifying 5.6 Will be proud to identify 6.0

as a CPA 5.0 myself as a CPA 5.1
Confidence in 5.5 Expected 5.7
professional prospects 5.2 competitive advantage 5.1
Accurately reflected 5.3 Employers will perceive my CPA 5.4
professional competencies 4.8 designation as superior 4.7
Enhanced market value 5.1 Confidence in 5.4
as a professional 4.4 career prospects 4.8
Superior career 4.9 2015 Expect better access to 5.1
opportunities 2015
4.4 2014 international opportunities 4.8 2014

Management’s Discussion and Analysis 23

 Fostering professional accounting
strength internationally

In 2014-15, CPA Canada established two new areas
of international focus—Asia and the Americas—to
build on our legacy brands’ reputations in these
markets, raise the profession’s global visibility and
influence, and make a difference internationally.
Taking the lead in developing
our profession globally
CPA Canada was selected as one of 12 bodies to
become a member of IFAC’s Professional Accounting
Organization Capacity Building Program. Launched
in 2014 and sponsored by the U.K. Department of
International Development, the program provides
peer-to-peer support to professional organizations in
emerging countries, helping develop and strengthen
their professional standards.
Regionally, CPA Canada is a member of the board of
the Confederation of Asian and Pacific Accountants,
whose current deputy president, Jackie Poirier, is
a Nova Scotia member. CPA Canada also became
an affiliate member of the Institute of Chartered
Accountants of the Caribbean and will help ICAC
advance the interests of accountants in the Caribbean
region through promotion of internationally acceptable
standards and best practices, thought leadership,
research and continuing professional development.
CPA Canada is a founding member of the Global
Accounting Alliance (GAA), which facilitates co-
operation among 11 of the world’s leading professional
accounting organizations.
Contributing knowledge and
expertise in Asia
CPA Canada signed a memorandum of co-operation
with the Chinese Institute of CPAs at the World
Congress of Accountants in November 2014. The
agreement identifies the following areas of shared
interest: professional education; certification; ethics;
regulation and standard-setting; and collaboration
among firms.
We also opened our first international chapters in
Shanghai, Beijing, Guangzhou and Hong Kong.
Contributing knowledge and expertise
in the Caribbean
Over the next year, CPA Canada’s network of
international chapters will expand to the Caribbean.
Accountancy continues to be a popular profession in
the Caribbean—and the Canadian CPA is fast becoming
a designation of choice. The Canadian CPA Professional
Education Program is attractive to potential students
in both the public and private sectors, especially
those with clients and ties to Canada or working in
the finance and resource sectors. Its portability and
commitment to audit quality and ethical decision-
making make the Canadian CPA an attractive option
for those seeking mobility and an exciting career.

24 CPA Canada
CPA Canada
Annual
Annual
Report
Report
2014-2015
2014-2015
There are more than 190,000 Canadian CPAs living
and working in 155 countries.

Management’s Discussion and Analysis 25



Thanks to our volunteers. We couldn’t make

such a difference without you!

CPA Canada owes much of its success to its 800
volunteers from across the country. These professionals
contribute an enormous amount of time, energy
and expertise to the profession on a wide range of
strategically important projects and activities.
Our volunteers make a difference by:
• advising on issues of importance to the profession
and business;
• collaborating to create intellectual capital;
• improving guidance; and
• sharing their knowledge, insights and ideas.
As part of the financial literacy program, Finance
Minister Joe Oliver partnered with CPA Canada to
hold a fraud prevention session in his riding. “When
Canadians make the best financial decisions for
themselves, we will obtain the best outcomes for our
economy,” explained Oliver.
Canada’s accounting profession also has a seat at
the national financial literacy table. Cairine Wilson,
CPA Canada’s vice-president, corporate citizenship, was
appointed to the National Steering Committee on Financial
Literacy by Minister of State for Finance Kevin Sorenson
and Jane Rooney, Canada’s Financial Literacy Leader.

Helping Canadians understand

how to manage their money
In 2014, CPA Canada was honoured with a prestigious
EIFLE (Excellence in Financial Literacy Education)
award and named Organization of the Year, Non-profit,
by the U.S.-based Institute for Financial Literacy.

Through CPA Canada’s Financial Literacy Program,

there are more than 11,000 professional accountants
registered, trained and prepared to conduct free
financial seminars in communities across the country.
The national volunteer program helps Canadians of
all ages, with tailored offerings for, among others,
newcomers and small business owners.
CPA Canada is represented on a national steering committee
charged with developing a Canadian financial literacy strategy.
Left to right: Minister of State (Finance) Kevin Sorenson;
CPA Canada’s vice-president of corporate citizenship,
Cairine Wilson; Financial Literacy Leader Jane Rooney.

moRE tHAn

Professional accountants volunteering for CPA Canada's Financial Literacy Program

26 CPA Canada Annual Report 2014-2015

Helping our employees give back
With more staff and more locations, our popular
employee volunteer program is growing, allowing
CPA Canada to devote additional time and energy
to making a difference in the community.
Toronto staff volunteers contributed more than
525 volunteer hours with 11 partner organizations.
Our volunteers helped the Toronto Fire Service with its
annual toy drive, and helped the Centre for Addiction
and Mental Health deliver its arts and crafts programs
and serve hot meals. Employees in Ottawa raised funds
for the Ottawa Food Bank through their Food Bank
Friday Fund; staff in Montreal planted trees on Mount
Royal; and staff in Burnaby raised funds through a
number of events to combat bullying.
Management’s Discussion and Analysis 27


There are more than 120 volunteer committees,

task forces and groups at CPA Canada

1 3

2 4

1. Canadian Performance Reporting Board. Left to right: Martin Lundie, Jonathan Allen, Karyn Brooks, Joan Dunne, Julie Desjardins (staff),
Dirk Lever (chair), Rosemary McGuire (staff).
2. Accounting Standards Board (AcSB). Back row (left to right): Lara Gaede, Michel Magnan, Gale Kelly, Paul Hargreaves, Brian Drayton.
Front row (left to right): Rebecca Villmann, Jocelyn Patenaude, Linda Mezon, Karen Higgins, Adam Sheparski.
3. Public Sector Accounting Board (PSAB). Back row (left to right): Russ Jones, Bill Matthews, Mike Ferguson, Tim Wiles, Mike Ruta,
Andrew Newman, Bill Cox, Murray Lindo, Cam Weldon. Middle row (left to right): Lydia So, Joanna Chrzanowski, Antonella Risi,
Edlene Mogul. Front row (left to right): Tim Beauchamp, Rod Monette, Margaret MacDonald, France Alain.
4. Auditing and Assurance Standards Board (AASB) Back row (left to right): Fred Pries, Jim McCarter, Bill Mandelman, Doug King,
Marcel Couture, Jacqui Kuypers, Chi Ho Ng, Birender Gill, Alan Reynolds, Anna Moreton, Michael Frankel, Eric Turner, Marian McMahon,
Ron Salole. Front row (left to right): Greg Shields, Darrell Jensen (Vice-Chair), Cathy MacGregor (Chair), Alodie Brew, Dave Rasmussen.

28 CPA Canada Annual Report 2014-2015

Behind the scenes:
Operational excellence

From Finance to Human Resources and IT, to
Translation and Office Services, CPA Canada’s teams
completed the complex tasks to build a foundation for
excellence without compromising the organization’s
ability to deliver services to members.
• Our finance team has been instrumental in
CPA Canada’s effective financial planning, risk
management and stewardship of resources.
Its work can be seen throughout the Financial
Performance section of this report.
• Human Resources facilitated the integration of
employees of all three national accounting bodies.
The team worked with managers across the
organization to balance the needs of CPA Canada,
current employees and transitioning employees so
that CPA Canada continued to operate effectively
during a period of significant change.
• Our redesigned online system for students offers
a seamless experience, from registration to
participation in our pre-qualification programs.
• With our new volunteer management program,
the 800 CPAs who drive the success of our
128 committees can pursue their work with better
co-ordination and support.
• Office Services continues to create a comfortable,
well-run environment for members, volunteers and
employees to do their work.
Through all of these initiatives, CPA Canada is
creating better experiences for its students, members,
volunteers and staff, and supporting them as they
continue to make an even greater difference.

• Our new technology platforms are designed

to take collaboration among our employees,
provincial bodies, volunteers and committees to
new heights. We are working to enable staff to
work together seamlessly across four locations.

• Our team of 40 Language Services professionals

had a landmark year, translating numerous items
such as accounting and auditing standards,
guidance and support materials, and the new
CPA Professional Education Program.

Management’s Discussion and Analysis 29

 Operating Environment
CPA Canada pursues opportunities, provides services
and conducts activities that may expose it to a variety
of risks. The ability to respond appropriately and
effectively to expected and unanticipated change is
critical to the organization’s success.
Risks to CPA Canada’s strategy
Managing risk
An important aspect of governance and management
best practices is to ensure that organizational risks are
identified, assessed and managed in a timely, efficient
and effective manner.
Risk management approach
CPA Canada’s risk management policy is to apply an
enterprise risk management (ERM) framework that
helps guide the organization in its risk management
activities. The ERM framework:
• establishes the roles and responsibilities of the
CPA Canada Board of Directors, Audit Committee
and Management Committee;
• specifies the organization’s tolerance for risk;
• outlines the process for identifying, assessing and
categorizing the organization’s risks;
• ensures a uniform approach to risk mitigation,
management and reporting;
30 CPA Canada Annual Report 2014-2015
• incorporates numerous approaches for managing
risk, including avoidance, mitigation, transferal,
insurance and acceptance;
• encourages a risk-aware culture where risk
management is integrated into CPA Canada’s
strategic and operational decision-making;
• outlines how key risks, opportunities and impacts
are determined; and
• facilitates the understanding, discussion, evaluation
and management of risks at all levels.
Risk governance
Risk oversight of CPA Canada activities resides
with the Board of Directors. The board oversees the
organization’s ERM and approves a risk management
policy and an annual risk-tolerance profile designed to
ensure a consistent understanding of risk exposure.
The board is responsible for the annual approval of
CPA Canada’s multi-year strategic plan. It ensures
that the strategic direction is sound, provides linkage
between strategies and provision of services, and
establishes the basis of the annual operational
commitments and related budgets. It is through
CPA Canada’s strategic planning process that key
risks affecting the organization as a whole are
identified and addressed.
The board monitors compliance with the risk
management policy and reviews the risk
management policy and procedures annually.
The board delegates primary responsibility for risk
management to the Audit Committee and is supported
by the Management Committee. The board is kept
informed of significant risks and mitigating strategies
through ongoing reporting mechanisms.
The Audit Committee is responsible for reviewing
the significant risks and uncertainties that may affect
CPA Canada, and the adequacy of its risk management
policy, procedures and controls. The committee
recommends the risk management policy and annual
risk tolerance profile to the board for approval.
The CPA Canada Management Committee, composed
of the president and CEO, executive vice president
and the vice presidents of each core business group
and support function, provides leadership in the
development and implementation of ERM.
The committee’s responsibilities encompass:
• developing, implementing and maintaining an
effective ERM framework for the organization;
• developing the risk management policy and risk
tolerance profile of the organization;
• communicating the organization’s risk management
policy, risk tolerance profile, and ERM framework;
• identifying potential and emergent risks, assessing
their likelihood and impact, determining what risks
are not acceptable and when risk mitigation and
risk management strategies must be developed;
• determining the right level of risk for each strategic
initiative using the risk tolerance profile;
• assigning responsibility to develop risk mitigation
approaches and actions to appropriate staff and/or
boards and committees on an issue-specific basis;
• explicitly identifying risk mitigation resource
requirements and allocation to manage risks to
an acceptable level; and
• identifying opportunities to manage the
uncertainties of potential and emergent risks,
and potential outcomes.
Risk assessment
CPA Canada, under its risk management policy and risk
tolerance profile, assesses its willingness to accept risk
and seeks to manage those risks to an acceptable level,
otherwise referred to as its tolerance for risk.
Members of the Management Committee are
accountable for effectively managing risks relative to
their respective areas and collectively updating the
ERM framework during the year.
CPA Canada attempts to proactively mitigate its
exposure to risk through sound planning, effective
management, and the appropriate response strategies.
Key risks
A key risk is one that, alone or in combination with
interrelated risks, can have a significant adverse impact
on the organization’s reputation, its ability to achieve its
priorities, objectives and financial performance, and has
a probability of occurring.
Operating Environment 31
 Key risk Risk management strategy
External and environmental
Inability to support and act in the
public interest
Inability to identify and adapt to the
diverse and changing needs of its
key stakeholders and/or inability to
demonstrate and deliver value
Inability to comply with, or adapt
to, current and changing regulations
and laws
32 CPA Canada Annual Report 2014-2015
CPA Canada supports a robust and independent standard-setting process that
helps to ensure the financial and non-financial information in the private and
public sectors is reliable, comparable, transparent and credible. This is critical
to investor confidence, a sound financial system and to acting in the public
interest. CPA Canada also continues to enhance audit quality through several
initiatives including collaborative efforts with regulators such as the Canadian
Public Accountability Board (CPAB) and to enhance the value of audit by
effectively responding to the technological, regulatory and other challenges
facing audit practices. Through its Awards of Excellence in Corporate
Reporting, Awards of Excellence in Public Sector Financial Management and
guidance publications, CPA Canada helps establish best practices that support
healthy capital markets and contribute to accountability and transparency.
Through its financial literacy programs, publications, tools and resources,
CPA Canada is a leading advocate for financial literacy.
CPA Canada consults regularly with stakeholders including members,
candidates, students, provincial bodies, academics, employers and others
to monitor changes in expectations, needs and priorities, against which it
benchmarks and measures its performance. Through its strategic planning
process, CPA Canada ensures its key priorities and objectives are aligned with
the ongoing needs of its stakeholders. It also conducts periodic research for
relevant products and services, and listens to feedback to incorporate into
programs and service delivery.
CPA Canada’s Code of Conduct sets out expected ethical behaviour of
employees, volunteers and consultants, and helps set the tone at the top for
a culture of integrity. It is everyone’s responsibility to uphold the principles
of respect, integrity, honesty and trust, and to speak up and report concerns
about the violation of laws, regulations and CPA Canada policies. CPA Canada’s
policies and processes also provide for the timely review and monitoring of
potential or actual legal or regulatory issues to enable senior management
and the board to effectively perform their management and oversight
responsibilities. CPA Canada also maintains a broad range of insurance
coverage, which is reviewed annually with the Audit Committee. While it
is not possible to entirely eliminate legal and regulatory risk, CPA Canada
works closely with its legal and other advisers to manage risk, seek advice
on the performance of legal obligations, and manage litigation that involves
or impacts CPA Canada.
Key risk Risk management strategy
Internal and operational
Inability to protect CPA Canada’s
brand assets and/or effectively build
brand awareness
Inability to attract and retain
sufficient and appropriately skilled
people who have the expertise
(focus, commitment and capability)
to support the achievement of CPA
Canada’s key strategic objectives
and priorities; and address external
and/or internal human resources-
related matters
Inability to produce competent CPAs
Inability to deliver a CPA
professional education program
that meets the expectations of the
marketplace, hindering new entrants
and leading to an insufficient
number of candidates being
attracted to the program
To manage risks to its brand strategy, CPA Canada regularly monitors and
measures the effectiveness of its branding initiatives through the Council of
Chief Executive’s Brand Steering Committee. It engages outside expertise
to assist in this activity. It also maintains relationships with political and
governmental bodies, and enhances its presence in Ottawa as a trusted
adviser on business and accounting issues. CPA Canada has a strategic
communication and crisis-management process, and a social media strategy
and policy to enhance its effectiveness and credibility in the social media
environment. The CPA Canada branding strategy ensures CPA Canada is
talking to members with one voice.
Various policies and practices address organizational design, employee
recruitment programs, succession planning, compensation structures,
ongoing training and professional development programs and performance
management.
Volunteer recruitment and recognition programs are utilized and volunteer
satisfaction is monitored through surveys conducted periodically.
To produce competent CPAs, CPA Canada employs uniform assessments
throughout the certification program (including a common final examination).
It works collaboratively with the provincial and territorial bodies to maintain
a practical experience requirement, and ensure relevant competencies are
developed and assessed.
CPA Canada regularly conducts research with members, employers and
other stakeholders to measure satisfaction, determine key touch points to
drive promotion, and bring the new CPA professional education program to
the attention of prospective candidates. Broad stakeholder consultation on
program relevancy also drives marketplace penetration and awareness.
The CPA competency map and programming is regularly reviewed to ensure
they remain relevant. In addition, alternate streams to certification have been
developed to ensure the program remains inclusive and attractive.
The delivery of the CPA education program in conjunction with the provincial
and territorial bodies is heavily reliant on technology, and CPA Canada has
partnered with key third-party providers with proven track records.
Operating Environment 33
 Key risk Risk management strategy
Internal and operational (continued)

Inability to ensure the CPA
professional education program
module evaluations and the
common final examination are not
compromised, and the reliability
and validity of the examinations
themselves are not brought into
question
A team of experienced and dedicated CPA Canada employees and
volunteers with expertise in the design and delivery of examinations ensures
the examinations are not compromised, and results are reliable and valid.
Comprehensive confidentiality and security processes are in place to
ensure integrity.

Inability of CPA Canada to
produce professional learning and
development programs, publications,
products and services that are
innovative, relevant and aligned
with contemporary technology and
delivery models
CPA Canada manages these risks by conducting member-focused research to
help select and deliver the products and benefits that provide value. Members
are also encouraged to participate at events and try publications, products
or services through a variety of marketing activities and promotions. The
organization collaborates with provincial and territorial bodies to enhance
and expand product offerings. It works closely with key strategic partners to
design inventive programs with long-term benefits. Appropriate information
technology skills and core competencies are available to the organization, and
the IT infrastructure appropriately supports current and future development
plans. IT Services monitors new technology and trends, works closely with
stakeholders and undertakes extensive surveys to understand their needs
and priorities.

Inability to adequately protect and IT Services employs a number of programs, procedures and processes to
secure CPA Canada’s technology, IT effectively respond to emergencies, and to safeguard CPA Canada technology,
infrastructure and information from IT infrastructure and information from unauthorized intrusions and
a major negative event other threats.

Financial risk Credit risk

CPA Canada is exposed to a number of risks associated
with financial instruments that have the potential to
affect its operating and financial performance. The
financial instrument risk exposures are: credit risk,
liquidity risk and market risk (currency, interest rate and
other price risk).
CPA Canada manages these risks in accordance with
its risk management policy. The objective of the policy
is to reduce volatility in cash flow and earnings, and
safeguard assets.
CPA Canada is exposed to credit risk resulting from
the possibility that parties may default on their
financial obligations, or if there is a concentration of
transactions carried out with the same party, or if there
is a concentration of financial obligations that have
similar economic characteristics that could be similarly
affected by changes in economic conditions, such that
CPA Canada could incur a financial loss. CPA Canada
does not hold directly any collateral as security for
financial obligations of counterparties.

CPA Canada also has an investment policy that details

the asset quality and proportion of fixed income and
equity securities in which it invests. It does not use
derivative financial instruments to manage its risks.

34 CPA Canada Annual Report 2014-2015

The maximum exposure of CPA Canada to credit risk
at March 31 is as follows ($000s):
2015 2014
Cash and cash equivalents $ 4,249 $ 18,206
Amounts receivable 17,600 10,213
Short-term investments 2,000 4,230
Investments - Guaranteed
investment certificates 16,355 -
Investments - Canadian
fixed income - 7,381
Investments - Index pooled
funds: Canadian fixed income 21,291 18,788
$ 61,495 $ 58,818
Cash and cash equivalents, short-term investments
and investments: Credit risk associated with cash
and cash equivalents, short-term investments and
investments is minimized substantially by ensuring
that these assets are invested in financial obligations
of: governments; major financial institutions that have
been accorded investment grade ratings by a primary
rating agency; and/or other credit-worthy parties.
An ongoing review is performed to evaluate changes
in the status of the issuers of securities authorized
for investment under the investment policy of
CPA Canada.
Amounts receivable: Credit risk associated with
amounts receivable is minimized by CPA Canada’s
large and diverse customer base, which covers
substantially all business sectors in Canada.
CPA Canada follows a program of credit evaluations
of customers and limits the amount of credit
extended when deemed necessary.
Concentrations of credit risk with respect to amounts
receivable is limited due to the credit quality of the
parties extended credit, as well as the large number
and geographic dispersion of smaller customers.
Amounts receivable from the provincial and territorial
bodies generally relate to members’ fees collected
on CPA Canada’s behalf and costs recoverable from
the provincial and territorial bodies. At March 31, 2015
and 2014, amounts receivable from the three largest
provincial and territorial bodies comprised 83% and
71%, respectively, of the total amounts due from
provincial and territorial bodies.
Concentrations of credit risk with respect to
guaranteed investment certificates are mitigated due
to the credit quality of the major financial institutions
issuing the investment. At March 31, 2015, 89% of the
total holdings in guaranteed investment certificates
are with the same financial institution.
Liquidity risk
Liquidity risk is the risk that CPA Canada will not be
able to meet a demand for cash or fund its obligations
as they come due.
CPA Canada meets its liquidity requirements by
preparing and monitoring detailed forecasts of cash
flows from operations, anticipating investing and
financing activities, and holding assets that can
be readily converted into cash. CPA Canada has a
short-term unsecured bank facility of up to $1 million
in place should it be required to meet temporary
fluctuations in cash requirements. At March 31, 2015
and 2014, the bank facility had not been drawn upon.
Market risk
Market risk is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because
of changes in market prices. Market risk is comprised
of currency risk, interest rate risk and other price risk.
Currency risk
Currency risk refers to the risk that the fair value
of financial instruments or future cash flows
associated with the instruments will fluctuate relative
to the Canadian dollar due to changes in foreign
exchange rates.
The functional currency of CPA Canada is the
Canadian dollar. CPA Canada infrequently transacts
in foreign currencies due to certain revenues and
operating costs being denominated in foreign
currencies, as well as sourcing certain purchases,
services and capital asset acquisitions internationally.
CPA Canada does not use foreign exchange forward
contracts to manage foreign exchange transaction
exposures.
Operating Environment 35
 CPA Canada also invests a portion of its investment
portfolio in an index pooled fund which invests in
foreign equities. CPA Canada mitigates its currency
risk exposure by investing in an index pooled fund that
is composed of investment securities comprised of
multiple currencies.
Interest rate risk
Interest rate risk refers to the risk that the fair value of
financial instruments or future cash flows associated
with the instruments will fluctuate due to changes in
market interest rates.
The exposure of CPA Canada to interest rate risk arises
from its interest bearing assets and fixed-rate long-term
loans. CPA Canada’s interest-bearing assets include
cash and cash equivalents, short-term investments and
guaranteed investment certificates held with financial
institutions that earn interest at market rates.
Fluctuations in market rates of interest on cash and cash
equivalents, short-term investments and guaranteed
investment certificates do not have a significant impact
on CPA Canada’s results of operations.
The objective of CPA Canada with respect to its fixed
income investments and guaranteed investment
certificates is to ensure the security of principal
amounts invested, provide for a high degree of liquidity
and achieve a satisfactory investment return.
CPA Canada manages the interest rate risk exposure
of its fixed income investments and guaranteed
investment certificates by using a laddered portfolio
with varying terms to maturity. The laddered structure
of maturities helps to enhance the average portfolio
yield while reducing the sensitivity of the portfolio
to the impact of interest rate fluctuations. The fixed
income pooled fund investments consist of varying
maturities, which reduces the overall sensitivity to
interest rate changes.
36 CPA Canada Annual Report 2014-2015
Other price risk
Other price risk refers to the risk that the fair value of
financial instruments or future cash flows associated
with the instruments will fluctuate because of changes
in market prices (other than those arising from currency
risk or interest rate risk), whether those changes are
caused by factors specific to the individual instrument
or its issuer or factors affecting all similar instruments
traded in the market.
CPA Canada is exposed to other price risk because of
its investment in index pooled funds.
The investment policy of CPA Canada restricts
investments in index pooled funds to selected market
indices. The investment policy for index pooled
funds provides for an asset mix of 55% (+/-3%) fixed
income investments and 45% (+/-3%) equities and
is rebalanced to the asset mix on a quarterly basis.
Risk and volatility of investment returns are mitigated
through diversification of investments in different
countries, business sectors and corporation sizes.
Financial risks associated with Defined
Benefit Plans for Employees
The primary long-term risk of the Plans to CPA Canada
is that the Plans assets and future operational cash
flows of CPA Canada will be insufficient to satisfy the
Plan liabilities. A summary of the funded status of the
Plans is as follows ($000s):
2015 2014
Funded plan:
Plan assets at fair value $ 56,832 $ 51,014
Defined benefit obligations (61,069) (51,416)
(4,237) (402)
Unfunded plans:
Defined benefit obligations (26,078) (22,068)
Post-retirement benefits liability
recognized in the statement of
financial position $ (30,315) $ (22,470)
The liabilities of the plans expose CPA Canada to
various forms of risk including liquidity risk and the
risk associated with changes in actuarial assumptions,
primarily interest rate risk with reference to the
discount rate used to measure the defined benefit
obligations of the Plans.
The assets of the Plan expose CPA Canada to various

25+28+1829v
forms of risk including credit, liquidity and market risk Guaranteed Investment Certificates
which is comprised of interest, currency and other price at Amortized Cost
risk. The assets of the plan comprise investments in
index pooled funds. The investment policy for the index
pooled funds provides for an asset mix of 40% (+/-3%)
fixed income investments and 60% (+/-3%) equities and
is rebalanced on a quarterly basis.
18% 29%
CPA Canada mitigates the risks relating to the plan
assets in the same manner as its financial instruments.
In addition, there is a natural offset in relation to the
interest rate risk on the liability of its funded plan arising
from its investments in index pooled funds whose
values are also affected by changes in interest rates. 28% 25%

Changes in risk
There are no significant changes in the risk profile $000s
of the financial instruments and defined benefit Matures in fiscal 2017 4,713
plans of CPA Canada from that of CPA Canada
Matures in fiscal 2018 4,000
and CGA-Canada in the prior year.
Matures in fiscal 2019 4,642

Matures in fiscal 2020 3,000

Capability to deliver results

Capital resources and liquidity

CPA Canada’s cash and cash equivalents position
was $4.2 million as of March 31, 2015, a decrease of
$14.0 million from the $18.2 million1 cash and cash
equivalents position at the prior year-end. Cash and
cash equivalents at year-end are held on deposit with
major Canadian financial institutions in interest-bearing
accounts or in guaranteed investment certificates.
Cash used in operating activities increased year-over-
year by $13.5 million. The increase was primarily due
to the net changes in non-cash working capital. Higher
amounts receivables, lower accounts payable and
accrued liabilities, and deferred revenue, due to a
decrease in the amount of members’ fees received in
advance compared to the prior year, contributed to
a decrease in cash.
Investing activities used cash of $8.5 million primarily
from the net purchases of investments and capital
assets. CPA Canada also has available an undrawn
operating line of credit of $1 million with a Canadian
financial institution.
Financing activities used cash of $0.5 million for the
repayment of long-term debt on the Burnaby office
of CPA Canada.
CPA Canada’s short-term investments have effective
interest rates ranging from 1.4% to 1.45% with maturity
dates in March 2016 (2014: effective interest rates
ranging from 1.25% to 1.45% with maturity dates ranging
from June 2014 to March 2015).

1
  The combination of CPA Canada and CGA-Canada financial positions on April 1, 2014.

Operating Environment 37

CPA Canada’s investments are comprised of guaranteed
investment certificates and index pooled funds. The
guaranteed investment certificates have effective
interest rates ranging from 1.55% to 2.52% with maturity
dates ranging from June 2016 to November 2019. CPA
Canada’s investments held no guaranteed investment
certificates in the prior year. The Canadian fixed income
investments in the index pooled funds have effective
interest rates ranging from 0.70% to 6.52% (2014: 0.95%
to 6.65%), with maturity dates ranging from April 2015
to December 2064 (2014: April 2014 to March 2064).
CPA Canada’s investment policy benchmark asset mix
of the index pooled fund investments is set at 55%
(+/-3%) for fixed income investments and 45% (+/-3%)
for equities. The actual asset mix is rebalanced on a
quarterly basis. The benchmark asset mix has remained
the same throughout the year.
Investment in capital assets is guided by the capital
asset plan prepared by management each year and
approved by the Board of Directors. For fiscal 2015,
the plan called for an increase in capital spending.
The additional capital investment was used to further
expand the organization’s information technology
infrastructure, principally to support the new CPA
professional certification and education programs,
and to continue the work on CPA Canada’s integrated
website launched December 2014. CPA Canada’s
total capital investment in 2014-15 was $2.0 million
compared to $1.6 million in the prior year.
Net assets
Net assets as of March 31, 2015 amounted to $36.6
million and consisted of $7.7 million invested in capital
assets (net book value of capital assets less the
unamortized balance of deferred tenant inducements
and long-term debt used to purchase capital assets),
and $28.9 million of unrestricted net assets, which
increased by $7.7 million during the year. The changes
in net assets were primarily impacted by a significant
excess of revenues over expenses for fiscal 2015 of
$15.2 million somewhat offset by the defined benefit
costs for remeasurements and other items of $7.3 million
as a result of the adoption of the new employee future
benefits standards.
38 CPA Canada Annual Report 2014-2015
55+25+20v
Index Pooled Funds
at Fair Value
20%
55%
25%
$000s
Canadian fixed income 21,291
Foreign equities 9,549
Canadian equities 7,736
On October 1, 2014, in the final operational phase of
unification at the national level, CGA-Canada combined
its assets, obligations, employees and operations with
CPA Canada excluding all insurance-related assets and
liabilities related to the professional liability program
operated for CGA public practitioners and the associated
insurance fund. The initial phase of unification at the
national level previously saw CICA and CMA Canada
combine with CPA Canada on April 1, 2013. The
transition to a fully unified Canadian nationalaccounting
body was the culmination of the efforts of all three
national legacy bodies—CICA, CMA Canada and
CGA-Canada—and represented tremendous change
and unprecedented growth in the size and scope of
the combined organization.
To effectively manage the significant change and
rapid growth taking place during the year, revenue
streams from existing and new programs were closely
monitored and expenditures were prudently managed,
emphasizing cost containment, where possible. This
was necessary in order to have sufficient financial
resources available to continue to develop and enhance
the new CPA Professional Education Program (CPA PEP)
as it was rolled out across the country and while the
existing legacy education programs were maintained,
continue to develop and roll out the new CPA
Prerequisite Education Program (CPA PREP), begin to
develop the new Advanced Certificate in Accounting
and Finance Program (ACAF), and continue to build
the new integrated CPA Canada website launched
during the year. CPA Canada, under a new and evolving
operating environment, achieved all its key strategic
initiatives for 2015, capping off a very successful year.

Higher revenues from almost all revenue streams and a

focus on managing costs effectively through integration
contributed to the $15.2 million excess of revenues over
expenses for fiscal 2015. The unrestricted net assets
are required to provide sufficient financial capital to
meet any material unexpected financial risks such as
future long-term lease costs and unplanned projects
subsequently approved by the board. The unrestricted
net assets are also available to help maintain reasonable
stability in annual member fees.

The Audit Committee annually reviews the level of

unrestricted net assets to assess its appropriateness.
The unrestricted net assets of $28.9 million amount to
the equivalent of approximately 3¼ months of fiscal
2015 expenses, which remains within the three-month
expense guideline the Audit Committee considers the
minimum amount needed in net assets to meet any
unexpected financial risk.

Operating Environment 39
 Financial Performance

53+18+121142v
In fiscal 2015, CPA Canada operations resulted in a 2015 Sources of Revenue
$15.2 million excess of revenues over expenses
compared to the prior year where the excess of revenues
over expenses was $2.0 million. Total revenues were 4% 2%
significantly higher than the prior year most notably in
certification education programs, and total expenses
overall were lower than the year before. 11%
Total revenues of $121.6 million from all sources increased
$11.4 million over the prior year. Total members’ fees 12%
increased $2.8 million due to the growth in the combined 53%
membership. Certification education programs revenue
increased significantly year-over-year, from $16.6 million
18%
to $22.1 million. This was largely due to a higher student
uptake in the legacy education programs, spurred on
somewhat by the planned phase-out of the programs
next year, as well as an increase in revenue from the roll Members’ fees
out of the CPA certification education programs across
Certification education programs
the country. Professional learning and development
Professional learning and development
revenue increased $1.7 million year-over-year and revenue
from publications, products and services was $0.5 million Publications, products and services
lower. Investment income of $5.0 million was also Investment income
significantly higher in fiscal 2015 by $1.7 million, Magazines
primarily from an increase in unrealized appreciation
in fair value of index pooled funds. In fiscal 2015, total
magazine revenue increased $0.2 million compared
to the prior year, and other revenue remained flat
year over year.

40 CPA Canada Annual Report 2014-2015

 19+18+13129764v
Total Revenue 2015 Sources of Expenses
$000s
140,000— 4%
120,000 —————————————————————————— 6%
100,000 ————————————————— 121,560
—————————
110,186
80,000 —————————————————————————— 7% 19%
60,000 ——————————————————————————
40,000 —————————————————————————— 9%
20,000 —————————————————————————— 18%
0 —————————————————————————————— 12%
2014 2015
12% 13%
Members’ Fees
$000s Certification education programs

140,000— Finance and administration

Governance and international relations
120,000 ——————————————————————————
Professional learning and development
100,000 ——————————————————————————
Publications, products and services
80,000 ——————————————————————————
Standards
60,000 ——————————————————————————
63,639 Strategic communications, branding
60,820
40,000 ————————————————— ————————— and public affairs
20,000 —————————————————————————— Research, guidance and support
0 —————————————————————————————— Magazines
2014 2015

Total expenses of $106.3 million decreased by Total Expenses

$1.9 million compared to prior year total expenses
of $108.2 million. Expenses were lower in most areas,
$000s
with the exception of professional learning and 140,000—
development, publications, products and services, 120,000 ——————————————————————————
and standards, where expenses increased modestly.
100,000 ——————————————————————————
The overall decrease in expenses reflects a year 108,175 106,317
80,000 ——————————————————————————
carefully focused on managing costs strategically
by reducing and avoiding costs where possible and 60,000 ——————————————————————————
allocating resources to where they were needed most 40,000 ——————————————————————————
as CGA-Canada and CPA Canada completed the 20,000 ——————————————————————————
final phase of integration at the national level and
combined their employees and operations together
0 ——————————————————————————————
on October 1, 2014. Throughout the transition, the 2014 2015
combined organization was able to pursue its key
objectives and priorities, maintain or enhance its core
services and continue to make a difference on behalf
of members and other stakeholders.

Financial Performance 41
 Governance of
CPA Canada

The CPA Canada Board of Directors conducted five
regular and two special meetings in 2014-15, as well
as a strategic retreat and an education day. Among
the key business conducted was approval of the CPA
Canada/CGA-Canada merger agreement, as well as the
admission of CPA Bermuda, CPA New Brunswick, CPA
Saskatchewan, CPA Newfoundland and Labrador, and
CPA Prince Edward Island as Organization Members.
The board receives regular reports from its four
standing committees (Audit, Nominating and
Governance, Human Resources and Compensation,
and Education and Qualifications Advisory). It also
receives a report at each regular meeting from the
Council of Chief Executives. The report covers the core
elements of the profession that are managed jointly by
the national and provincial accounting bodies, namely
strategic planning, public trust and ethics, education
and qualification, and brand and reputation activities.
The CPA Canada Board of Directors is now at its
maximum size, with the passage of a board resolution
in December 2014, increasing the number of directors
to 22 from 20. This change recognizes the participation
in unification of CGA-Ontario and CGA-Manitoba.
Subsequently, Blake Mercer, FCPA, FCGA, and
Marilyn Kuntz, FCPA, FCA, were appointed as directors.
Following the second CPA Canada annual general
meeting in September 2014, Shelley Brown, FCPA,
FCA, completed her term as chair; Bob Strachan, FCPA,
FCMA, became chair; and Alain Côté, FCPA, FCA,
became vice chair. The latter was succeeded in his role
as director by Manon Durivage, FCPA, FCA.

42 CPA Canada Annual Report 2014-2015

CPA Canada Board of Directors
2014-2015

Chair Vice Chair

Bob Strachan Alain Côté

FCPA, FCMA FCPA, FCA
Retired, Former Manager, Managing Partner, Québec Region,
Accounting Services, Capital Regional Deloitte, Montréal, Québec
District, Victoria, British Columbia

Directors

Barbara Carle-Thiesson N. Thomas Conyers

FCPA, FCA FCPA, FCA
Partner, MNP, Retired, Former Partner,
Nanaimo, British Columbia PricewaterhouseCoopers, Bermuda

Jacques Côté Manon Durivage*

FCPA, FCMA FCPA, FCA
Special Advisor, Canadian Space Partner, BDO Canada LLP
Agency, Montréal, Québec Montréal, Québec

Catherine Emrick Gregory Gallant

FCPA, FCGA FCPA, FCA
Senior Associate, Aquaculture Partner, Grant Thornton LLP
Innovation, Tides Canada, Toronto, Ontario
Calgary, Alberta

Leo Gallant Colleen Gibb

FCPA, FCA FCPA, FCA
Professor of Accounting, President, Gibb Widdis Professional
St. Francis Xavier University Corporation, Ancaster, Ontario
Antigonish, Nova Scotia

Note: Shelley Brown, FCPA, FCA, Partner, Deloitte, Vancouver, served as chair from September 25, 2013 to September 24, 2014.
* Manon Durivage, FCPA, FCA, succeeded Alain Côté in the position of director as of September 24, 2014.

Governance of CPA Canada 43

 CPA Canada Board of Directors
2014-2015

Directors

Marilyn Kuntz Terry Le Blanc

FCPA, FCA FCPA, FCGA
Retired, Former Partner, BDO Retired, Former Regional Director,
Canada LLP, Calgary, Alberta Canada Revenue Agency,
Moncton, New Brunswick

Michael E. Lem Jonathan Levin

FCPA, FCMA Partner, Fasken Martineau,
Vice President, Investment Advisor & Toronto, Ontario
Financial Planner, BMO Nesbitt Burns, (Public Representative)
Markham, Ontario

Blake Mercer John Nagy

FCPA, FCGA FCPA, FCGA
Partner, Mercer & Mercer, Partner, Reid Hurst Nagy Inc.,
Milton, Ontario Richmond, British Columbia

Dorothy Rice Stephan Robitaille

FCPA, FCMA FCPA, FCGA
Director Electoral Finance, Vice President Business Development,
Elections Nova Scotia, Lombard Odier Management (Canada)
Halifax, Nova Scotia Inc., Montréal, Québec

Michel Théroux Douglas J. Tkach

FCPA, FCA FCPA, FCA
Retired, Former CFO, Jas. A. Ogilvy Inc. Senior Vice President and Chief Internal
Montréal, Québec Auditor, Great-West Life Assurance
Company, Winnipeg, Manitoba

Marcel Vienneau Rod Wiley

CEO, Hybrid Paytech World and FCPA, FCMA
Co-founder of Mobi724 Solutions, Associate, Praxis Consulting,
Montréal, Québec Regina, Saskatchewan
(Public Representative)

44 CPA Canada Annual Report 2014-2015

CPA Canada Management Committee
As of March 31, 2015

Stephen Anisman CPA, CMA Stephenie Fox, CPA, CA

Vice-President, Finance and Chief Financial Officer Vice-President, Standards

Tashia Batstone, MBA, FCPA, FCA Lyle Handfield, FCPA, FCGA

Vice-President, Education Services Vice-President, International — Asia

Gordon Beal, CPA, CA, M.Ed. Gabe Hayos, FCPA, FCA

Vice-President, Research, Guidance and Support Vice-President, Taxation

Nicholas Cheung, CPA, CA, CIPP/C Joy Thomas, MBA, FCPA, FCMA, C. Dir.
Vice-President, Member Services Executive Vice-President

Kevin Dancey, FCPA, FCA Heather Whyte, MBA, APR

President and CEO Vice-President, Strategic Communications,
Branding and Public Affairs
Gale Evans, CPA, CMA, C.Dir.
Vice-President, Administration Cairine Wilson, MBA, CAE
Vice-President, Corporate Citizenship
Nancy Foran, FCPA, FCMA, C.Dir
Vice-President, International — The Americas

Stephenie Fox assumed the position of Vice-President, Standards as of April 1, 2015, succeeding
Glenn Rioux, CPA, CA, following his untimely death in September 2014.

Governance of CPA Canada 45

 Financial Statements
CPA Canada

Management responsibility The accompanying financial statements have been

for financial reporting
The accompanying financial statements and all other
information contained in this annual report are the
responsibility of the management of the Chartered
Professional Accountants of Canada (CPA Canada).
The financial statements have been prepared by
management in accordance with Canadian accounting
standards for not-for-profit organizations and have
been approved by the Board of Directors.
audited by the auditors who are engaged by the Board
of Directors on the recommendation of the Audit
Committee and whose appointment was ratified at the
annual meeting of members. The auditors have access
to the Audit Committee, without management present,
to discuss the results of their work.

Preparation of financial information is an integral

part of management’s broader responsibilities for
the ongoing operations of CPA Canada, which
includes adherence by all employees to CPA Canada’s Kevin Dancey, fcpa , fca

Code of Conduct. Management maintains a system President and CEO

of internal accounting controls to provide reasonable
assurance that transactions are accurately recorded
on a timely basis, are properly approved and result in
reliable financial information. Such information also
includes data based on management’s best estimates
and judgments. Joy Thomas, fcpa , fcma
Executive Vice-President
The Audit Committee reviews the annual financial
statements and recommends them to the Board
of Directors for its approval. In addition, the Audit
Committee meets periodically with management and
the external auditors, and reports to the Board of
Directors thereon. The Audit Committee also reviews the
annual report in its entirety.

46 CPA Canada Financial Statements 2014-2015

Independent auditor’s report
To the Members of
Chartered Professional Accountants of Canada
We have audited the accompanying financial
statements of Chartered Professional Accountants of
Canada, which comprise the statement of financial
position as at March 31, 2015, and the statements of
operations, changes in net assets and cash flows for
the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management’s responsibility
for the financial statements
Management is responsible for the preparation and
fair presentation of these financial statements in
accordance with Canadian accounting standards
for not-for-profit organizations and for such internal
control as management determines is necessary to
enable the preparation of financial statements that
are free from material misstatement, whether due to
fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these
financial statements based on our audit. We conducted
our audit in accordance with Canadian generally
accepted auditing standards. Those standards require
that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance
about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures
in the financial statements. The procedures selected
depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation
and fair presentation of the financial statements in
order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion, the financial statements present fairly, in
all material respects, the financial position of Chartered
Professional Accountants of Canada as at March 31,
2015 and the results of its operations and its cash flows
for the year then ended in accordance with Canadian
accounting standards for not-for-profit organizations.
Emphasis of matters
We draw attention to note 2 in which management
of Chartered Professional Accountants of Canada
describes and explains the accounting for the
combination of Chartered Professional Accountants
of Canada and the Certified General Accountants
Association of Canada on October 1, 2014. Our opinion
is not modified in respect of this matter.
Without modifying our opinion, we also draw
attention to note 3 in which management of Chartered
Professional Accountants of Canada describes and
explains the impact of the change in accounting policy
in response to the introduction of Sections 3462 and
3463 of the CPA Canada Handbook - Accounting.
Chartered Professional Accountants
Licensed Public Accountants
Toronto, Ontario
June 16, 2015
CPA Canada Financial Statements 2014-2015 47
 Statement of Financial Position
as at March 31

2015 2014
($000’s) ($000’s)
[Note 2]
ASSETS
Current Assets
Cash and cash equivalents [Note 4] $4,249 $18,206
Amounts receivable [Note 5] 17,600 10,213
Short-term investments [Note 6] 2,000 4,230
Inventories [Note 7] 590 688
Prepaid royalties and other assets 3,094 2,718
27,533 36,055

Investments [Note 8] 54,931 41,631

Capital Assets [Note 10]
Tangible assets 14,312 14,754
Intangible assets 1,027 1,035
15,339 15,789
70,270 57,420
$97,803 $93,475

LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities [Note 11] $13,902 $15,500
Deferred revenue 9,175 18,346
Current portion of long-term debt [Note 12] 373 508
23,450 34,354

Long-term Debt [Note 12] 6,776 7,149

Post-retirement Benefits [Note 13] 30,315 22,470

Deferred Lease Incentives [Note 14] 637 827

37,728 30,446
61,178 64,800

NET ASSETS
Invested in capital assets 7,691 7,487
Unrestricted 28,934 21,188
36,625 28,675
$97,803 $93,475

See accompanying notes

On behalf of the Board,

Bob Strachan, FCPA, FCMA Tom Conyers, FCPA, FCA

Director Director

48 CPA Canada Financial Statements 2014-2015

Statement of Operations
for the year ended March 31

2015 2014
($000’s) ($000’s)
[Note 2] [Note 2]
REVENUES
Members’ fees $63,639 $60,820
Certification education programs 22,080 16,581
Professional learning and development 14,945 13,268
Publications, products and services 13,048 13,589
Investment income [Note 15] 5,045 3,354
Magazines 2,374 2,163
Other 429 411
121,560 110,186

EXPENSES
Certification education programs 20,258 20,739
Finance and administration 19,261 19,800
Governance and international relations 13,833 14,624
Professional learning and development 13,077 12,975
Publications, products and services [Note 7] 12,817 12,418
Standards 9,263 8,969
Strategic communications, branding and public affairs 7,080 7,222
Research, guidance and support 6,156 6,427
Magazines 4,572 5,001
106,317 108,175

EXCESS OF REVENUES OVER EXPENSES $15,243 $2,011

See accompanying notes

CPA Canada Financial Statements 2014-2015 49

 Statement of Changes in Net Assets
for the year ended March 31

Invested in Invested in
Capital 2015 Capital 2014
Assets Unrestricted ($000’s) Assets Unrestricted ($000’s)

[Note 2]

Balance, beginning of year $7,487 $21,188 $28,675 $7,420 $15,156 $22,576

Excess of revenues over expenses
(expenses over revenues) (1,814) 17,057 15,243 (1,490) 3,501 2,011
Purchase of tangible assets 1,417 (1,417) — 757 (757) —
Purchase of intangible assets 601 (601) — 800 (800) —
Defined benefit costs - remeasurements
and other items — (7,293) (7,293) — 4,088 4,088
Balance, end of year $7,691 $28,934 $36,625 $7,487 $21,188 $28,675

See accompanying notes

50 CPA Canada Financial Statements 2014-2015

Statement of Cash Flows
for the year ended March 31

2015 2014
($000’s) ($000’s)
[Note 2]
OPERATING ACTIVITIES
Excess of revenues over expenses $15,243 $2,011
Adjustments to determine net cash provided by (used in) operating activities:
Amortization of tangible assets 1,759 1,712
Amortization of intangible assets 609 459
Loss on disposal of tangible assets 36 1
Interest capitalized on cash equivalents and short-term investments — (24)
Interest capitalized on guaranteed investment certificates and fixed income investments (115) (59)
Interest received on cash equivalents capitalized in prior years 11 —
Interest received on fixed income investments capitalized in prior years 79 109
Reinvested distributions from index pooled funds (1,976) (1,892)
Realized gains on sale of investments (481) (407)
Unrealized appreciation in fair value of index pooled funds (2,051) (562)
Required post-retirement benefits funding (2,042) (2,054)
Post-retirement benefits expense 2,594 3,318
Amortization of deferred lease incentives (190) (216)
13,476 2,396

Change in non-cash working capital items

Amounts receivable (7,387) (674)
Inventories 98 (48)
Prepaid royalties and other assets (376) (762)
Accounts payable and accrued liabilities (1,598) 2,225
Deferred revenue (9,171) 5,452
(4,958) 8,589

INVESTING ACTIVITIES
Purchase of short-term investments (2,000) (4,230)
Purchase of investments (29,631) (25,722)
Proceeds on sale of short-term investments 4,230 —
Proceeds on sale of investments 20,864 27,004
Purchase of tangible assets (1,417) (757)
Purchase of intangible assets (601) (800)
Proceeds on disposal of tangible assets 64 —
(8,491) (4,505)

FINANCING ACTIVITIES
Repayment of long-term debt (508) (510)

Net change in cash and cash equivalents (13,957) 3,574

Cash and cash equivalents, beginning of year 18,206 14,632

Cash and cash equivalents, end of year $4,249 $18,206

See accompanying notes

CPA Canada Financial Statements 2014-2015 51

 Notes to the Financial Statements
for the year ended March 31, 2015 (all amounts in $ thousands)

Nature and description of the organization

Chartered Professional Accountants of Canada (CPA Canada) was incorporated as a not-for-profit

corporation under the Canada Not-for-profit Corporations Act on January 1, 2013. CPA Canada is exempt
from federal and provincial income taxes.

CPA Canada conducts research into current business issues and supports the setting of accounting, auditing
and assurance standards for business, not-for-profit organizations and government. It assists and encourages
organization members and legacy bodies in promoting and developing appropriate and uniform standards
of qualification for admission of Chartered Professional Accountants and maintaining appropriate standards
of professional conduct for all Chartered Professional Accountants. CPA Canada issues guidance, publishes
professional literature, develops certification education and professional learning programs, and represents
the CPA profession nationally and internationally.

1. Significant accounting policies

These financial statements have been prepared by management in accordance with Canadian accounting
standards for not-for-profit organizations and include the following significant accounting policies:

a) Revenue recognition
(i) Members’ fees
Members’ fees are recognized as revenue proportionately over the fiscal year to which they relate.
Membership fees received in advance of the membership year to which they relate are recorded as
deferred revenue.

(ii) Publications, products and services

Revenue is recognized at the time of shipment, when the service is rendered, or proportionately over
the period of the subscription depending on the nature of the product or service. The liability for the
portion of subscription revenues invoiced but not yet earned is recorded as deferred revenue.

(iii) Professional learning and development

Revenue is recognized when professional learning and development programs are presented.
The liability for the portion of program revenues invoiced but not yet earned is recorded as
deferred revenue.

(iv) Certification education programs

Revenue is recognized upon a candidate’s enrolment in a certification education program module.
Examination fees are recognized as revenue when the examinations are held. The amount received in
advance of candidate enrolment or an examination being held is recorded as deferred revenue.

52 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

1. Significant accounting policies (continued)

a) Revenue recognition (continued)

(v) Investment income

Investment income comprises interest from cash and cash equivalents, interest from short-
term investments, interest from guaranteed investment certificates, interest from fixed income
investments, distributions from index pooled funds, realized gains and losses on the sale of
investments, and unrealized appreciation and depreciation in the fair value of index pooled funds.
Revenue is recognized on an accrual basis. Interest earned from guaranteed investment certificates
and fixed income investments is recognized over the terms of the respective investments using the
effective interest method.

(vi) Magazines
Magazine subscriptions are recognized as revenue over the period of the subscriptions. Advertising
revenue is recognized in the period in which the advertisement is published. The liability for the
portion of magazine revenues invoiced but not yet earned is recorded as deferred revenue. Member
magazine subscriptions are included in Members’ fees.

b) Cash and cash equivalents

Cash and cash equivalents consist of cash and investments which are readily convertible into cash or
have a maturity date of 90 days or less from date of acquisition, and are not subject to significant risk of
changes in value.

c) Short-term investments
Short-term investments consist of guaranteed investment certificates with maturity dates ranging from 91
days to twelve months from date of acquisition.

d) Investments
Investments consist of guaranteed investment certificates and fixed income investments with maturity
dates of greater than twelve months from date of acquisition, and index pooled funds. Guaranteed
investment certificates and fixed income investments maturing within twelve months from the year-end
date are classified as current.

e) Donated services
The work of CPA Canada is dependent on the voluntary service of many individuals who are experts
and industry leaders of specialized subject matters. Since these services are not normally purchased
by CPA Canada and because of the difficulty of determining their fair value, donated services are not
recognized in the financial statements.

f) Prepaid expenses
Prepaid expenses primarily comprise advance payments made to vendors in the current fiscal year for
goods and services to be received in the next fiscal year. Prepaid expenses are recognized as expenses in
the period when the goods and services are received.

CPA Canada Financial Statements 2014-2015 53

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

1. Significant accounting policies (continued)

g) Inventories
Inventories are valued at the lower of cost and net realizable value. The cost of inventories includes all
costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present
location and condition and is determined on a first-in, first-out basis.

h) Financial instruments
(i) 
Measurement of financial instruments
CPA Canada initially measures its financial assets and financial liabilities at fair value adjusted by, in
the case of a financial instrument that will not be measured subsequently at fair value, the amount of
transaction costs directly attributable to the instrument.

CPA Canada subsequently measures all of its financial assets and financial liabilities at amortized
cost, except for investments in index pooled funds that are quoted in an active market, which
are measured at fair value. Changes in fair value are recognized in income in the period the
changes occur.

Amortized cost is the amount at which a financial asset or financial liability is measured at initial
recognition minus principal repayments, plus or minus the cumulative amortization of any difference
between that initial amount and the maturity amount, and minus any reduction for impairment.

Transaction costs are recognized in income in the period incurred, except those relating to financial
instruments which will subsequently be measured at amortized cost. Transaction costs associated
with the acquisition and disposal of fixed income investments are capitalized and are included in the
acquisition costs or reduce proceeds on disposal. Investment management fees associated with the
index pooled funds are expensed as incurred.

Financial assets measured at amortized cost include cash and cash equivalents, amounts receivable,
short-term investments, guaranteed investment certificates and fixed income investments.

Financial liabilities measured at amortized cost include accounts payable and accrued liabilities and
long-term debt.

Financial assets measured at fair value include investments in index pooled funds.

The fair values of investments in index pooled funds are determined by reference to the latest closing
transactional net asset value of each respective index pooled fund.

(ii) Impairment
At the end of each reporting period, CPA Canada assesses whether there are any indications that
a financial asset measured at amortized cost may be impaired. Objective evidence of impairment
includes observable data that comes to the attention of CPA Canada, including but not limited

54 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

1. Significant accounting policies (continued)

h) Financial instruments (continued)
(ii) Impairment (continued)

to the following events: significant financial difficulty of the issuer; a breach of contract, such
as a default or delinquency in interest or principal payments; and bankruptcy or other financial
reorganization proceedings.

When there is an indication of impairment, CPA Canada determines whether a significant adverse

change has occurred during the period in the expected timing or amount of future cash flows from
the financial asset.

When CPA Canada identifies a significant adverse change in the expected timing or amount of
future cash flows from a financial asset, it reduces the carrying amount of the asset to the greater of
the following:
i) the present value of the cash flows expected to be generated by holding the financial asset
discounted using a current market rate of interest appropriate to the financial asset; and
ii) the amount that could be realized by selling the financial asset at the statement of financial
position date.

Any impairment of the financial asset is charged to income in the period in which the impairment
is determined.

When the extent of impairment of a previously written-down asset decreases and the decrease can
be related to an event occurring after the impairment was recognized, the previously recognized
impairment loss is reversed to the extent of the improvement, but not in excess of the impairment
loss. The amount of the reversal is recognized in income in the period the reversal occurs.

i) Capital assets
The costs of capital assets are capitalized upon meeting the criteria for recognition as a capital asset, with
the exception of expenditures on internally generated intangible assets during the development phase,
which are expensed as incurred. The cost of a capital asset comprises its purchase price and any directly
attributable cost of preparing the asset for its intended use.

A capital asset is tested for impairment whenever events or changes in circumstances indicate that its
carrying amount may not be recoverable. If any potential impairment is identified, then the amount of
the impairment is quantified by comparing the carrying value of the capital asset to its fair value. Any
impairment of the capital asset is charged to income in the period in which the impairment is determined.

An impairment loss is not reversed if the fair value of the capital asset subsequently increases.

(i) Tangible assets

Tangible assets, consisting of land, building, building improvements, furniture, equipment and
leasehold improvements, are measured at cost less accumulated amortization, if applicable, and
accumulated impairment losses.

CPA Canada Financial Statements 2014-2015 55

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

1. Significant accounting policies (continued)

i) Capital assets (continued)
(i) Tangible assets (continued)

Amortization is provided for on a straight-line basis over the estimated useful lives of the capital
assets as follows:

Building 25 years

Building improvements 10 years
Furniture and equipment 3 to 10 years
Leasehold improvements Remaining terms of the relevant leases

Intangible assets
(ii) 
Intangible assets, consisting of separately acquired computer application software, are measured at
cost less accumulated amortization and accumulated impairment losses.

Amortization is provided for on a straight-line basis over the estimated useful lives of the intangible
assets for a period of three to five years.

j) Post-retirement benefits

Defined benefit plans

(i) A defined benefit liability is recognized in the statement of financial position to the extent that the
defined benefit obligations of a plan exceed the fair value of the plan’s assets.

C
 omponents of the total cost of a defined benefit plan, excluding remeasurements and other items,
are recognized immediately in income.

Remeasurements and other items are recognized directly in net assets in the statement of financial
position rather than in the statement of operations and are presented as a separately identified line
item in the statement of changes in net assets.

(ii) Defined benefit obligations are actuarially determined using the projected benefit method prorated
on services and management’s best estimates of retirement age, mortality, discount rates to reflect
the time value of money, future salary and benefit levels and other actuarial assumptions.

(iii) Defined benefit obligations are measured using actuarial valuation reports prepared for accounting
purposes on an annual basis under which actuarial assumptions, including the discount rate, are
updated annually.

(iv) Plan assets are measured at fair value.

(v) Plan assets and defined benefit obligations are measured at March 31.

56 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

1. Significant accounting policies (continued)

j) Post-retirement benefits (continued)
Defined benefit plans (continued)

(vi) The components of the total cost of a defined benefit plan for a period are:
• current service cost;
• finance cost; and
• remeasurements and other items.

Current service cost for the period is the actuarial present value of benefits attributed to employees’
services rendered during the period, reduced to reflect employee contributions.

Finance cost for the period is the net interest on the defined benefit liability calculated by
multiplying the defined benefit liability at the start of the period by the discount rate used in
determining the defined benefit obligation at the start of the period. Finance cost for a defined
benefit asset is a credit.

Remeasurements and other items are comprised of:

• the difference between the actual return on plan assets and the return calculated using the
discount rate used to value the plan’s defined benefit obligations at the beginning of the period;
• actuarial gains and losses;
• the effect of any valuation allowance in the case of a net defined benefit asset;
• past service costs; and
• gains and losses arising from settlements and curtailments.

Actuarial gains and losses can arise in a given year from:

• the difference between the actual defined benefit obligations at the end of the year and the
expected defined benefit obligations at the end of the year; and
• changes in actuarial assumptions.

Defined contribution plans

(i) The total cost of a defined contribution plan is recognized in the current period.

(ii) The components of the total cost of a defined contribution plan for a period are:
• current service cost;
• past service costs;
• interest cost on the estimated present value of any contributions required in future periods
related to employee services rendered during the current period or prior periods; and
• a reduction for the interest income for the period on any unallocated plan surplus.

Current service cost for the period is comprised of the contributions required to be made in the period
in exchange for employee services rendered during the period, and the estimated present value of
any contributions required to be made in future periods related to employee services rendered during
the period.

CPA Canada Financial Statements 2014-2015 57

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

1. Significant accounting policies (continued)

k) Deferred lease incentives

Lease incentives received include reduced rent benefits and tenant inducements received in cash.

Lease incentives received in connection with original leases are amortized to income on a straight-line
basis over the terms of the original leases. Lease incentives received in connection with re-negotiated
leases are amortized to income on a straight-line basis over the period from the expiration date of the
respective original lease to the expiration date of the re-negotiated lease.

l) Net assets invested in capital assets

Net assets invested in capital assets comprises the net book value of capital assets less debt and the
unamortized balance of deferred tenant inducements used to purchase capital assets.

m) Management estimates
The preparation of financial statements in conformity with Canadian accounting standards for not-for-
profit organizations requires management to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the current period. Actual results may differ from the estimates, the
impact of which would be recorded in future periods.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the year in which the estimates are revised and in any future years affected.

Management considers the discount rates used to measure defined benefit obligations to be
significant estimates.

2. Uniting the Canadian accounting profession

Canada’s accounting landscape has been undergoing significant change with efforts to unite the accounting
profession under the Chartered Professional Accountant (CPA) designation. The unification of the three
national accounting organizations is being implemented in phases.

Initial operational phase

In the initial operational phase of unification, the assets, obligations, employees and operations of The
Canadian Institute of Chartered Accountants and the Society of Management Accountants of Canada
were combined.

The Canadian Institute of Chartered Accountants (CICA)

The CICA was the national organization representing approximately 83,000 Chartered Accountants in
Canada and Bermuda at both the national and international levels.

58 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

2. Uniting the Canadian accounting profession (continued)

Initial operational phase (continued)

The CICA conducted research into current business issues and supported the setting of accounting, auditing
and assurance standards for business, not-for-profit organizations and government. It issued guidance,
published professional literature and developed professional learning programs.

The Society of Management Accountants of Canada (CMA Canada)

CMA Canada was the national organization representing approximately 50,000 Certified Management
Accountants and students in Canada, Bermuda and the Caribbean at both the national and
international levels.

CMA Canada was responsible for setting national standards for accreditation and continuing development,
the development and evaluation of the national CMA Professional Program, national branding initiatives,
conducting management accounting research, publishing management accounting guidelines and practices,
and government relations initiatives.

Chartered Professional Accountants of Canada (CPA Canada)

Effective April 1, 2013, CPA Canada commenced operations to provide services that were previously provided
by the CICA and CMA Canada. On that date, the assets, obligations, employees and operations of the CICA
and CMA Canada were transferred to CPA Canada. The assets and obligations transferred to CPA Canada
from the CICA and CMA Canada were transferred at the carrying amounts as presented in the respective
financial statements of the CICA and CMA Canada, immediately prior to the transfer on April 1, 2013. Each
of the CICA and CMA Canada will continue in existence while provincial and territorial bodies transition to
become CPA bodies and for such time thereafter as is determined to be necessary.

Final operational phase

Effective October 1, 2014, the final operational phase of the unification effort was completed. On that date,
subject to the terms of an Integration Agreement and a Transfer and Services Agreement, the assets,
obligations, employees and operations of the Certified General Accountants Association of Canada
were combined with those of CPA Canada excluding all insurance-related assets and liabilities related
to the professional liability insurance program operated for CGA public practitioners and the associated
insurance fund.

The Certified General Accountants Association of Canada (CGA‑Canada)

CGA‑Canada was the national organization representing approximately 75,000 Certified General
Accountants and students in Canada at both the national and international levels.

CGA‑Canada was responsible for advancing the interests of its members and the public through national
and international representation, development of programs of studies and the establishment of professional
standards, practices and services.

CPA Canada Financial Statements 2014-2015 59

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

2. Uniting the Canadian accounting profession (continued)

Final operational phase (continued)

The assets and obligations of CGA‑Canada excluding all the insurance-related assets and liabilities were
combined with those of CPA Canada and recorded at the carrying amounts of CGA‑Canada, as presented
in the financial statements of CGA‑Canada immediately prior to the combination on October 1, 2014.
CGA‑Canada will continue in existence while provincial and territorial bodies transition to become CPA bodies
and for such time thereafter as is determined to be necessary.

Accounting for the combination

The combination of the assets, obligations and operations of the CICA, CMA Canada and CGA‑Canada
occurred in two operational phases, as described above, in accordance with the terms of A Framework for
Uniting the Canadian Accounting Profession issued in January 2012, under which none of the predecessor
organizations gained control or rights of precedence over the others following their combination. Since no
acquirer could be identified in the combination, the pooling of interests method was used to combine the
assets, obligations, employees and operations of the predecessor organizations at each operational phase.
As required by the pooling of interests method, the financial statements of CPA Canada and CGA‑Canada
for the year ended March 31, 2014 were combined to form the comparative figures for the current year as if
the organizations had always been combined. Similarly, although CGA‑Canada and CPA Canada operations
were combined on October, 1, 2014, the operating results of CGA‑Canada and CPA Canada for the six-
month period preceding the October 1, 2014 combination have also been presented together (see table
following) in order to present a full year of the combined organization’s operations as if all of the predecessor
organizations had been combined from inception.

The following tables illustrate the combination of the assets, obligations, and operations of CPA Canada and
CGA‑Canada presented in these financial statements as the CPA Canada comparative financial statements for
fiscal 2014. Inter-entity transactions were eliminated.

The financial information has been derived from the audited financial statements of each of CPA Canada and
CGA‑Canada, respectively, at March 31, 2014 and for the year then ended.

60 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

2. Uniting the Canadian accounting profession (continued)

Accounting for the combination (continued)

Combined statement of financial position as at March 31, 2014

CPA CPA CGA- CGA-

Canada Elimination Canada Canada Elimination Canada
balance as Change in of inter- balance balance as of inter- balance Combined
previously Accounting entity as previously entity as CPA
reported policy transactions restated reported transactions restated Canada
[Note 3]
ASSETS
Current Assets
Cash and cash
equivalents $4,655 $ — $ — $4,655 $13,551 $ — $13,551 $18,206
Amounts receivable 4,791 — (253) 4,538 5,675 — 5,675 10,213
Short-term investments 4,230 — — 4,230 — — — 4,230
Inventories 688 — — 688 — — — 688
Prepaid royalties
and other assets 2,440 — — 2,440 278 — 278 2,718
16,804 — (253) 16,551 19,504 — 19,504 36,055

Investments 41,631 — — 41,631 — — — 41,631

Capital Assets
Tangible assets 2,977 — — 2,977 11,777 — 11,777 14,754
Intangible assets 1,016 — — 1,016 19 — 19 1,035
3,993 — — 3,993 11,796 — 11,796 15,789
45,624 — — 45,624 11,796 — 11,796 57,420
$62,428 $ — $(253) $62,175 $31,300 $ — $31,300 $93,475

LIABILITIES
Current Liabilities
Accounts payable and
accrued liabilities $11,319 $ — $ — $11,319 $4,434 $(253) $4,181 $15,500
Deferred revenue 14,347 — — 14,347 3,999 — 3,999 18,346
Current portion of
long-term debt — — — — 508 — 508 508
25,666 — — 25,666 8,941 (253) 8,688 34,354

Long-term Debt — — — — 7,149 — 7,149 7,149

Post-retirement
Benefits 9,308 13,162 — 22,470 — — — 22,470

Deferred Lease
Incentives 827 — — 827 — — — 827
10,135 13,162 — 23,297 7,149 — 7,149 30,446
35,801 13,162 — 48,963 16,090 (253) 15,837 64,800
NET ASSETS
Invested in
capital assets 3,348 — — 3,348 4,139 — 4,139 7,487
Unrestricted1 23,279 (13,162) (253) 9,864 11,071 253 11,324 21,188
26,627 (13,162) (253) 13,212 15,210 253 15,463 28,675
$62,428 $ — $(253) $62,175 $31,300 $ — $31,300 $93,475

The unrestricted net assets of CPA Canada as at March 31, 2014, prior to the elimination of inter-entity transactions, was $10,117 ($23,279 - 13,162). See note 3.
1

CPA Canada Financial Statements 2014-2015 61

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

2. Uniting the Canadian accounting profession (continued)

Accounting for the combination (continued)

Combined statement of operations for the year ended March 31, 2014

CPA CPA CGA- CGA-

Canada Elimination Canada Canada Elimination Canada
balance as Change in of inter- balance balance as of inter- balance Combined
previously Accounting entity as previously entity as CPA
reported policy transactions restated reported transactions restated Canada
[Note 3]
REVENUES

Members’ fees $46,103 $ — $ — $46,103 $14,717 $ — $14,717 $60,820
Certification
education
programs 4,739 — — 4,739 12,156 (314) 11,842 16,581
Professional
learning and
development 11,096 — — 11,096 2,172 — 2,172 13,268
Publications,
products and
services 11,683 — (641) 11,042 2,547 — 2,547 13,589
Investment income 3,233 — — 3,233 121 — 121 3,354
Magazines 1,985 — — 1,985 183 (5) 178 2,163
Other — — — — 411 — 411 411
78,839 — (641) 78,198 32,307 (319) 31,988 110,186

EXPENSES

Certification
education
programs 13,025 — (314) 12,711 8,028 — 8,028 20,739
Finance and
administration 10,315 7 (56) 10,266 9,475 59 9,534 19,800
Governance and
international
relations 10,494 — — 10,494 4,770 (640) 4,130 14,624
Professional learning
and development 11,598 — — 11,598 1,382 (5) 1,377 12,975
Publications,
products and
services 11,578 — — 11,578 840 — 840 12,418
Standards 8,969 — — 8,969 — — — 8,969
Strategic
communications,
branding and
public affairs 4,629 — (18) 4,611 2,597 14 2,611 7,222
Research, guidance
and support 5,916 — — 5,916 511 — 511 6,427
Magazines 4,191 — — 4,191 810 — 810 5,001
80,715 7 (388) 80,334 28,413 (572) 27,841 108,175
EXCESS OF
REVENUES
OVER
EXPENSES
(EXPENSES
OVER
REVENUES) $(1,876) $(7) $(253) $(2,136) $3,894 $253 $4,147 $2,011

62 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

2. Uniting the Canadian accounting profession (continued)

Accounting for the combination (continued)

Combined statement of cash flows for the year ended March 31, 2014

Combined
CPA Canada CGA‑Canada CPA Canada
OPERATING ACTIVITIES
Excess of revenues over expenses (expenses over revenues) $(2,136) $4,147 $2,011
Adjustments to determine net cash provided by (used in)
operating activities:
Amortization of tangible assets 909 803 1,712
Amortization of intangible assets 413 46 459
Loss on disposal of tangible assets — 1 1
Interest capitalized on cash equivalents
and short-term investments (24) — (24)
Interest capitalized on fixed income investments (59) — (59)
Interest received on fixed income investments
capitalized in prior years 109 — 109
Reinvested distributions from index pooled funds (1,892) — (1,892)
Realized gains on sale of investments (407) — (407)
Unrealized appreciation in fair value of index
pooled funds (562) — (562)
Required post-retirement benefits funding (2,054) — (2,054)
Post-retirement benefits expense 3,318 — 3,318
Amortization of deferred lease incentives (216) — (216)
(2,601) 4,997 2,396

Change in non-cash working capital items

Amounts receivable (634) (40) (674)
Inventories (48) — (48)
Prepaid royalties and other assets (697) (65) (762)
Accounts payable and accrued liabilities 1,793 432 2,225
Deferred revenue 5,369 83 5,452
3,182 5,407 8,589

INVESTING ACTIVITIES
Purchase of short-term investments (4,230) — (4,230)
Purchase of investments (25,722) — (25,722)
Proceeds on sale of investments 27,004 — 27,004
Purchase of tangible assets (737) (20) (757)
Purchase of intangible assets (800) — (800)
(4,485) (20) (4,505)

FINANCING ACTIVITIES
Repayment of long-term debt — (510) (510)

Net change in cash and cash equivalents (1,303) 4,877 3,574

Cash and cash equivalents, beginning of year 5,958 8,674 14,632

Cash and cash equivalents, end of year $4,655 $13,551 $18,206

CPA Canada Financial Statements 2014-2015 63

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

2. Uniting the Canadian accounting profession (continued)

Accounting for the combination (continued)

Combined statement of changes in net assets for the year ended March 31, 2014

Invested in
Capital Assets Unrestricted Total
CPA Canada
Balance, beginning of year $2,961 $8,299 $11,260
Excess of expenses over revenues (1,150) (986) (2,136)
Purchase of tangible assets 737 (737) —
Purchase of intangible assets 800 (800) —
Defined benefit costs, remeasurements and other items — 4,088 4,088
Balance, end of year $3,348 $9,864 $13,212

CGA‑Canada
Balance, beginning of year $4,459 $6,857 $11,316
Excess of revenues over expenses (expense over revenues) (340) 4,487 4,147
Purchase of tangible assets 20 (20) —
Balance, end of year $4,139 $11,324 $15,463

Combined CPA Canada
Balance, beginning of year $7,420 $15,156 $22,576
Excess of revenues over expenses (expenses over revenues) (1,490) 3,501 2,011
Purchase of tangible assets 757 (757) —
Purchase of intangible assets 800 (800) —
Defined benefit costs, remeasurements and other items — 4,088 4,088
Balance, end of year $7,487 $21,188 $28,675

64 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

2. Uniting the Canadian accounting profession (continued)

Accounting for the combination (continued)

When the combination transaction was completed on October 1, 2014, the combined assets and obligations
of the newly combined CPA Canada were as follows:

Combined statement of financial position as at October 1, 2014

Combined
CPA Canada CGA‑Canada CPA Canada
ASSETS

Current Assets
Cash and cash equivalents $4,637 $16,856 $21,493
Amounts receivable 8,277 7,322 15,599
Short-term investments 2,000 — 2,000
Inventories 591 — 591
Prepaid royalties and other assets 2,685 338 3,023
18,190 24,516 42,706

Investments 52,970 — 52,970

Capital Assets
Tangible assets 2,816 11,427 14,243
Intangible assets 1,046 17 1,063
3,862 11,444 15,306
56,832 11,444 68,276
$75,022 $35,960 $110,982

LIABILITIES

Current Liabilities
Accounts payable and accrued liabilities $7,681 $1,279 $8,960
Deferred revenue 30,217 5,772 35,989
Current portion of long-term debt — 244 244
37,898 7,295 45,193

Long-term debt — 7,149 7,149

Post-retirement Benefits 22,982 — 22,982

Deferred Lease Incentives 718 — 718

23,700 7,149 30,849
61,598 14,444 76,042

NET ASSETS

Invested in capital assets 3,303 4,051 7,354
Unrestricted 10,121 17,465 27,586
13,424 21,516 34,940
$75,022 $35,960 $110,982

CPA Canada Financial Statements 2014-2015 65

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

2. Uniting the Canadian accounting profession (continued)

Accounting for the combination (continued)

In order to present relevant, comparative financial statements, the current year operations of CPA Canada and
CGA‑Canada have been presented on a combined basis for the full fiscal year from April 1, 2014 through March 31, 2015.

Combined statement of operations for the year ended March 31, 2015

Combined Combined
CPA Canada CGA‑Canada CPA Canada CPA Canada Combined
operations for operations for operations for operations for CPA Canada
six months ended six months ended six months ended six months operations for
September 30, September 30, September 30, ended the year ended
2014 2014 2014 March 31, 2015 March 31, 2015

REVENUES

Members’ fees $23,786 $7,670 $31,456 $32,183 $63,639
Certification education programs 4,623 7,018 11,641 10,439 22,080
Professional learning and development 4,246 849 5,095 9,850 14,945
Publications, products and services 5,414 920 6,334 6,714 13,048
Investment income 1,530 90 1,620 3,425 5,045
Magazines 1,113 — 1,113 1,261 2,374
Other — 210 210 219 429
40,712 16,757 57,469 64,091 121,560

EXPENSES

Certification education programs 7,193 3,001 10,194 10,064 20,258
Finance and administration 6,065 3,741 9,806 9,455 19,261
Governance and international relations 4,553 1,774 6,327 7,506 13,833
Professional learning and development 5,521 533 6,054 7,023 13,077
Publications, products and services 5,478 260 5,738 7,079 12,817
Standards 4,539 — 4,539 4,724 9,263
Strategic communications,
branding and public affairs 2,231 1,171 3,402 3,678 7,080
Research, guidance and support 2,615 169 2,784 3,372 6,156
Magazines 2,305 55 2,360 2,212 4,572
40,500 10,704 51,204 55,113 106,317

EXCESS OF REVENUES
OVER EXPENSES $212 $6,053 $6,265 $8,978 $15,243

66 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

3. Change in accounting policy

In May 2013, the Accounting Standards Board (AcSB) issued Section 3462, Employee Future Benefits of the
CPA Canada Handbook - Accounting which replaced Section 3461.

In December 2013, the AcSB issued Section 3463, Reporting Employee Future Benefits by Not-for-Profit
Organizations which provides guidance for defined benefit plans on the recognition and presentation of
remeasurements and other items that differ from Section 3462.

Both Sections 3462 and 3463 are effective for reporting periods beginning on or after January 1, 2014, and
accordingly, CPA Canada has adopted the standards in the current year and has changed its accounting
policy in respect of post-retirement benefits.

The change in the accounting policy was made in accordance with the transitional provisions of Section 3462
and Section 3463. The transitional provisions provided guidance in connection with the manner in which a
change in the measurement date to that of the date of the statement of financial position rather than an early
measurement date was addressed and provided direction that retrospective application of the new Sections
was required.

The main changes for defined benefit plans are as follows:

• The full amount of a defined benefit obligation, net of plan assets, is recognized in the statement of
financial position effectively requiring the immediate recognition of all gains and losses arising from
defined benefit plans as they are incurred, and, thus, eliminating deferral and amortization accounting as
previously used.
• The interest cost and expected return on assets component of the defined benefit cost has been replaced
with a finance cost.
• Components of the total cost of a defined benefit plan, excluding remeasurements and other items, are
recognized immediately in income.
• Remeasurements and other items are recognized directly in net assets in the statement of financial
position rather than in the statement of operations and are presented as a separately identified line item
in the statement of changes in net assets.
• Plan obligations and plan assets are measured as of the statement of financial position date eliminating
the option of an early measurement date of not more than three months prior to the statement of
financial position date, which as previously used, resulted in a measurement date of December 31 for
three of the four defined benefit plans.

CPA Canada Financial Statements 2014-2015 67

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

3. Change in accounting policy (continued)

The adoption of the new accounting standards has been applied retrospectively. As a result, previously
reported balances of CPA Canada have been adjusted as follows:

Balance as
previously Balance as
reported Adjustment restated
Statement of Financial Position — April 1, 2013
Unrestricted net assets at April 1, 2013 $25,542 $(17,243) $8,299
Post-retirement benefits at April 1, 2013 8,051 17,243 25,294
Statement of Operations — 2014
Defined benefit costs (included in salaries and benefits expense) 3,311 7 3,318
Statement of Changes in Net Assets — 2014
Defined benefit costs – remeasurements and other items — 4,088 4,088
Statement of Financial Position — March 31, 2014
Unrestricted net assets at March 31, 2014 23,279 (13,162) 10,117
Post-retirement benefits at March 31, 2014 9,308 13,162 22,470

4. Cash and cash equivalents

2015 2014
Cash $4,249 $16,706
Guaranteed investment certificate —
­ 1.15%, matured June 26, 2014 — 1,500
$4,249
$18,206

5. Amounts receivable

2015 2014
AMOUNTS DUE FROM PROVINCIAL and territorial bodies:
Professional services products, interprovincial education services and other $13,443 $7,278
Member fees and magazine student subscriptions 606 141
14,049 7,419

AMOUNTS DUE FROM OTHERS:

Professional services products, magazine advertising, and other 3,666 2,861
Allowance for doubtful accounts (115) (67)
3,551
2,794
$17,600
$10,213

68 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

6. Short-term investments

Short-term investments have effective interest rates ranging from 1.40% to 1.45% maturing in March 2016
(2014 – effective interest rates ranging from 1.25% to 1.45% with maturity dates ranging from June 2014 to
March 2015).

7. Inventories

Inventories are comprised of books and publications available for sale. The amount of inventories recognized
as an expense during the year was $1,358 (2014 - $1,078).

8. Investments

2015
2014
MEASURED AT AMORTIZED COST
Canadian fixed income $ — $7,381
Guaranteed investment certificates 16,355 —
16,355 7,381

MEASURED AT FAIR VALUE

Index pooled funds – Canadian fixed income 21,291 18,788
– Canadian equities 7,736 6,874
– Foreign equities 9,549 8,588
38,576
34,250
$54,931
$41,631

CURRENT
Canadian fixed income $ — $—
Guaranteed investment certificates — —
— —

LONG-TERM
Guaranteed investment certificates 16,355 —
Canadian fixed income — 7,381
Index pooled funds 38,576 34,250
54,931 41,631
$54,931 $41,631

CPA Canada Financial Statements 2014-2015 69

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

8. Investments (continued)

The guaranteed investment certificates have effective interest rates ranging from 1.55% to 2.52%, with
maturity dates ranging from June 2016 to November 2019.

For 2014, the Canadian fixed income investments had effective interest rates ranging from 1.33% to 2.41% with
maturity dates ranging from April 2015 to December 2019.

The Canadian fixed income investments in the index pooled funds had effective interest rates ranging from
0.70% to 6.52% (2014 - 0.95% to 6.65%) and maturity dates ranging from April 2015 to December 2064 (2014
- April 2014 to March 2064).

9. Financial instrument risk management

CPA Canada is exposed to various risks through its financial instruments. The following analysis provides a
measure of the risk exposure and concentrations.

The financial instruments of CPA Canada and the nature of the risks to which they may be subject are
as follows:

Risks
Market risk
Financial instruments Credit Liquidity Currency Interest rate Other price
Cash and cash equivalents X X
Amounts receivable X
Short-term investments X X
Investments — Guaranteed
investment certificates X X
Investments — Canadian fixed income X X
Investments — index pooled funds:
Canadian fixed income X X X
Investments — index pooled funds:
Canadian and foreign equities X X
Accounts payable and accrued liabilities X
Long-term debt X X

CPA Canada manages its exposure to the risks associated with financial instruments that have the potential to
affect its operating and financial performance in accordance with its Risk Management Policy. The objective
of the policy is to reduce volatility in cash flow and earnings. The Board of Directors monitors compliance with
risk management policies and reviews risk management policies and procedures on an annual basis.

70 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

9. Financial instrument risk management (continued)

CPA Canada also has a specific Investment Policy that details the asset quality and proportion of fixed income
and equity securities in which investments are made.

CPA Canada does not use derivative financial instruments to manage its risks.

Credit risk
CPA Canada is exposed to credit risk resulting from the possibility that parties may default on their financial
obligations, or if there is a concentration of transactions carried out with the same party, or if there is a
concentration of financial obligations which have similar economic characteristics that could be similarly
affected by changes in economic conditions, such that CPA Canada could incur a financial loss. CPA Canada
does not hold directly any collateral as security for financial obligations of counterparties.

The maximum exposure of CPA Canada to credit risk at March 31 is as follows:

2015
2014
Cash and cash equivalents $4,249 $18,206
Amounts receivable 17,600 10,213
Short-term investments 2,000 4,230
Investments – Guaranteed investment certificates 16,355 —
Investments – Canadian fixed income — 7,381
Investments – index pooled funds: Canadian fixed income 21,291 18,788
$61,495 $58,818

Cash and cash equivalents, short-term investments and investments: Credit risk associated with cash and
cash equivalents, short-term investments and investments is minimized substantially by ensuring that these
assets are invested in financial obligations of: governments; major financial institutions that have been
accorded investment grade ratings by a primary rating agency; and/or other credit-worthy parties. An
ongoing review is performed to evaluate changes in the status of the issuers of securities authorized for
investment under the investment policy of CPA Canada.

Amounts receivable: Credit risk associated with amounts receivable is minimized by CPA Canada’s large
and diverse customer base, which covers substantially all business sectors in Canada. CPA Canada
follows a program of credit evaluations of customers and limits the amount of credit extended when
deemed necessary.

Management believes the concentration of credit risk with respect to amounts receivable is limited due to the
credit quality of the parties who are extended credit, as well as the large number and geographic dispersion
of smaller customers. Amounts receivable from the Provincial and territorial bodies generally relates to
members’ fees collected on CPA Canada’s behalf and costs recoverable from the Provincial and territorial
bodies. At March 31, 2015 and 2014, amounts receivable from the three largest Provincial and territorial bodies
comprised 83% and 71%, respectively, of the total amounts due from Provincial and territorial bodies.

CPA Canada Financial Statements 2014-2015 71

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

9. Financial instrument risk management (continued)

Credit risk (continued)

Management believes concentrations of credit risk with respect to guaranteed investment certificates are
mitigated due to the credit quality of the major financial institutions issuing the investment. At March 31, 2015,
89% of the total holdings in guaranteed investment certificates are with the same financial institution.

Liquidity risk
Liquidity risk is the risk that CPA Canada will not be able to meet a demand for cash or fund its obligations as
they come due.

CPA Canada meets its liquidity requirements by preparing and monitoring detailed forecasts of cash flows
from operations, anticipating investing and financing activities and holding assets that can be readily
converted into cash. CPA Canada has a short-term unsecured bank facility of up to $950, bearing interest at
prime, should it be required to meet temporary fluctuations in cash requirements. At March 31, 2015 and 2014,
the bank facility had not been drawn upon.

Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk is comprised of currency risk, interest rate risk and other price risk.

Currency risk
Currency risk refers to the risk that the fair value of financial instruments or future cash flows associated with
the instruments will fluctuate relative to the Canadian dollar due to changes in foreign exchange rates.

The functional currency of CPA Canada is the Canadian dollar. CPA Canada infrequently transacts in foreign
currencies due to certain revenues and operating costs being denominated in those currencies, as well as
sourcing certain purchases, services and capital asset acquisitions internationally.

CPA Canada does not use foreign exchange forward contracts to manage foreign exchange transaction
exposures.

CPA Canada also invests a portion of its investment portfolio in an index pooled fund which invests in
foreign equities. CPA Canada mitigates its currency risk exposure by investing in an index pooled fund that is
composed of investment securities comprised of multiple currencies.

Interest rate risk

Interest rate risk refers to the risk that the fair value of financial instruments or future cash flows associated
with the instruments will fluctuate due to changes in market interest rates.

The exposure of CPA Canada to interest rate risk arises from its interest bearing assets and fixed-rate
long-term loans.

72 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

9. Financial instrument risk management (continued)

Interest rate risk (continued)

CPA Canada’s interest bearing assets include cash and cash equivalents, short-term investments and
guaranteed investment certificates held with financial institutions that earn interest at market rates.

Fluctuations in market rates of interest on cash and cash equivalents, short-term investments and guaranteed
investment certificates do not have a significant impact on CPA Canada’s results of operations.

The objective of CPA Canada with respect to its fixed income investments and guaranteed investment
certificates is to ensure the security of principal amounts invested, provide for a high degree of liquidity, and
achieve a satisfactory investment return.

CPA Canada manages the interest rate risk exposure of its fixed income investments and guaranteed
investment certificates by using a laddered portfolio with varying terms to maturity. The laddered structure
of maturities helps to enhance the average portfolio yield while reducing the sensitivity of the portfolio to the
impact of interest rate fluctuations. The fixed income pooled fund investments consist of varying maturities
which reduces the overall sensitivity to interest rate changes.

Other price risk

Other price risk refers to the risk that the fair value of financial instruments or future cash flows associated
with the instruments will fluctuate because of changes in market prices (other than those arising from
currency risk or interest rate risk), whether those changes are caused by factors specific to the individual
instrument or its issuer or factors affecting all similar instruments traded in the market.

CPA Canada is exposed to other price risk because of its investment in index pooled funds.

The investment policy of CPA Canada restricts investments in index pooled funds to selected market
indices. The investment policy for index pooled funds provides for an asset mix of 55% (+/-3%) fixed income
investments and 45% (+/-3%) equities and is rebalanced to the asset mix on a quarterly basis. Risk and
volatility of investment returns are mitigated through diversification of investments in different countries,
business sectors and corporation sizes.

Changes in risk
There are no significant changes in the risk profile of the financial instruments of CPA Canada from that of
CPA Canada and CGA‑Canada in the prior year.

CPA Canada Financial Statements 2014-2015 73

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

10. Capital assets

2015 2014
Accumulated Net book Accumulated Net book
Cost
Amortization value Cost Amortization value
a) Tangible assets
Land $3,661 $ — $3,661 $3,661 $ — $3,661
Building 8,543 2,221 6,322 8,543 1,880 6,663
Building improvements 1,836 1,121 715 1,752 948 804
Furniture and equipment 8,435 6,214 2,221 8,850 6,811 2,039
Leasehold improvements 4,412 3,019 1,393 4,643 3,056 1,587
26,887 12,575 14,312 27,449 12,695 14,754

b) Intangible assets
Computer application software 6,949 5,922 1,027 6,720 5,685 1, 035
$33,836 $18,497 $15,339 $34,169 $18,380 $15,789

11. Accounts payable and accrued liabilities

2015 2014
Trade payables and accrued liabilities $13,646 $14,615
Sales taxes 255 884
Payroll and withholding taxes 1 1
$13,902 $15,500

12. Long-term debt

2015 2014
Business mortgage, interest at a fixed rate of 5.74% per annum, payable monthly,
up to and including the maturity date which is October 17, 2017, when the amount
outstanding is due and payable in full. Currently CPA Canada pays $64 per month,
as blended payments of principal and interest. $7,149 $7,503

Business term loan, interest at a fixed rate of 5.14% per annum, payable monthly,
up to and including the maturity date which is August 4, 2018, when the amount
outstanding is due and payable in full. This loan was paid in full during the current year. — 154
$7,149 $7,657
Current portion (373) (508)
$6,776 $7,149

The business mortgage is secured by a demand all indebtedness first mortgage and assignment of rents
charging the Burnaby office of CPA Canada.

74 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

12. Long-term debt (continued)

2015 2014
Interest expenses:
Business mortgage $416 $435
Business term loan 3 12
$419 $447

Minimum future principal repayment of the business mortgage are as follows:

2016 $373
2017 397
2018 6,379
$7,149

13. Post-retirement benefits

2015 2014
Liability recognized in the statement of financial position:
Pension plans $13,008 $8,251
Other post-retirement benefits 17,307 14,219
$30,315 $22,470

Defined benefit costs recognized in the statement of operations:

Pension plans $1,632 $2,120
Other post-retirement benefits 962 1,198
$2,594 $3,318

Defined benefit costs recognized in the statement of changes in net assets:

Pension plans $4,879 $(2,649)
Other post-retirement benefits 2,414 (1,439)
$7,293 $(4,088)

Total cash payments for pension and other post-retirement benefits:

Required minimum contributions to the funded pension plan under current

pension regulations $1,308 $1,469
Benefit payments directly to beneficiaries for the unfunded supplementary
pension plan 446 385
Contribution to fund current costs of the other post-retirement benefits plan 288 200
$2,042 $2,054

CPA Canada Financial Statements 2014-2015 75

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

13. Post-retirement benefits (continued)

a) Pension plans

CPA Canada maintains a registered pension plan with defined benefit and defined contribution
components and a non-registered unfunded supplementary pension plan.

Effective July 1, 2010, the registered pension plan was amended to eliminate the non-contributory
option for new plan members of the defined benefit component after that date. Effective May 1, 2012,
the defined benefit component of the registered pension plan and the supplementary pension plan were
closed to new members. Members of the defined benefit component of the registered pension plan
continued to accrue services until October 31, 2013. On November 1, 2013, the registered pension plan
opened its defined contribution component to new members and existing defined benefit component
members with less than 55 combined years of age plus service at November 1, 2013. Members with 55
or more combined years of age plus service were offered the option of staying in the defined benefit
component of the registered pension plan until October 31, 2016 or transferring their participation to
the defined contribution component of the registered pension plan effective November 1, 2013. All
future service of plan members from November 1, 2013 onward is recognized in the defined contribution
component of the registered pension plan with the exception of plan members who may have elected to
accrue services in the defined benefit component of the registered pension plan until October 31, 2016.

CPA Canada funds the registered pension plan in the amount that is required by governing legislation
and determined by actuarial valuations for funding purposes. Pension benefits in excess of the maximum
allowable benefits permitted pursuant to the Income Tax Act are provided from the supplementary
pension plan for those members who qualified prior to November 1, 2013. Contributions are made to the
supplementary plan as benefits are paid.

The changes to the pension plans described above and the resultant decrease in the accrued pension
obligation of the supplementary pension plan were reflected in the fiscal 2013 financial statements of the
CICA. There was no decrease in the accrued pension obligation of the defined benefit component of the
registered pension plan.

The most recent actuarial valuation of the pension plans for accounting purposes was made on
March 31, 2015.

The most recent actuarial valuation of the pension plans for funding purposes was made on January 1,
2014 and indicated required minimum funding contributions for fiscal 2015 of approximately $974 (2014
- $1,243) for current service and $363 (2014 - $287) for solvency and going concern amortization. For
fiscal 2016, the indicated required minimum funding contributions for current service are $1,003 and for
solvency and going concern amortization are $442. The next required actuarial valuation of the pension
plan for funding purposes will be on January 1, 2017.

76 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

13. Post-retirement benefits (continued)

a) Pension plans (continued)

2015 2014
Registered Supplementary Registered Supplementary
plan plan Total plan plan Total

(i) Funded status of plans

Plan assets at fair value $56,832 $ — $56,832 $51,014 $ — $51,014

Defined benefit
obligations (61,069) (8,771) (69,840) (51,416) (7,849) (59,265)
Defined benefit liability $(4,237) $(8,771) $(13,008) $(402) $(7,849) $(8,251)

(ii) Plan assets at fair value

Balance, beginning of year $51,014 $ — $51,014 $45,215 $ — $45,215

Actual return on plan assets 6,597 — 6,597 5,582 — 5,582
Employer’s contributions 1,308 446 1,754 1,469 385 1,854
Employees’ contributions 518 — 518 508 — 508
Benefits paid (2,605) (446) (3,051) (1,760) (385) (2,145)
Balance, end of year $56,832 $ — $56,832 $51,014 $ — $51,014

Plan assets consist of:

Equity securities 59.8% — 59.8% 60.2% — 60.2%
Debt securities 40.2% — 40.2% 39.8% — 39.8%
100.0% — 100.0% 100.0% — 100.0%

(iii) Defined benefit obligations

Balance, beginning
of year $(51,416) $(7,849) $(59,265) $(48,832) $(7,017) $(55,849)
Current service cost (1,118) (170) (1,288) (1,535) (168) (1,703)
Interest cost on defined
benefit obligations (2,376) (373) (2,749) (2,019) (296) (2,315)
Employees’ contributions (518) — (518) (508) — (508)
Benefits paid 2,605 446 3,051 1,760 385 2,145
Actuarial loss (8,246) (825) (9,071) (282) (753) (1,035)
Balance, end of year $(61,069) $(8,771) $(69,840) $(51,416) $ (7,849) $(59,265)

CPA Canada Financial Statements 2014-2015 77

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

13. Post-retirement benefits (continued)

a) Pension plans (continued)

2015 2014
Registered Supplementary Registered Supplementary
plan plan Total plan plan Total

(iv) Components of defined benefit costs

Current service cost $1,118 $170 $1,288 $1,535 $168 $1,703

Finance cost (29) 373 344 120 297 417
Defined benefit costs
recognized in the
statement of
operations 1,089 543 1,632 1,655 465 2,120
Remeasurements and other items:
• Difference between
the actual return on
plan assets and the
return calculated
using the discount
rate used
for the purposes
of calculating
finance cost (4,192) — (4,192) (3,684) — (3,684)
• Actuarial loss 8,246 825 9,071 282 753 1,035
Defined benefit costs
recognized in
the statement
of changes in
net assets 4,054 825 4,879 (3,402) 753 (2,649)
Defined benefit costs $5,143 $1,368 $6,511 $(1,747) $1,218 $(529)

(v) Actuarial assumptions

The significant actuarial assumptions used in measuring the defined pension obligations and the
defined benefit costs for the years then ended are as follows:

2015 2014
Defined benefit Defined Defined benefit Defined
obligations benefit costs obligations benefit costs
Discount rate 3.60% 4.90% 4.90% 4.40%
Rate of compensation increase 3.00% 3.00% 3.00% 3.00%

78 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

13. Post-retirement benefits (continued)

a) Pension plans (continued)

(vi) Defined contribution component

CPA Canada matches employee contributions to the defined contribution component of the
registered pension plan. The matching rate is based on the member’s level of contributions, earnings
and years of service. The required contributions during fiscal 2015 were $1,031 (2014 - $383).

Defined contribution account balances held in the Society of Management Accountants of Canada
Employees’ (2009) Pension Plan will be transferred to the defined contribution component of
the CPA Canada registered pension plan upon approval being granted by the Financial Services
Commission of Ontario.

b) Other post-retirement benefits

CPA Canada provides non-pension post-retirement health, dental, and nominal life insurance benefits to
its retired employees through two defined benefit plans. Benefits are provided through a group insurance
contract and are funded through the payment of annual insurance premiums to an insurance provider.

Effective November 1, 2013, the post-retirement benefits of Plan 1 are only available to certain former
CICA employees whose combined age plus service were equal to 55 years or more on November 1,
2013 and are employees on the day preceding the date of retirement with an immediate pension from
the organization. The change to the post-retirement benefits and the resultant decrease in the accrued
benefit obligation were reflected in the fiscal 2013 financial statements of the CICA.

During fiscal 2014, changes were made to limit the eligibility of benefits in Plan 2 to certain former
CMA Canada employees. Certain employees remained eligible for Plan 2 benefits, or otherwise were
eligible for Plan 1 benefits, whereas the balance of employees were no longer eligible for benefits. The
change to the post-retirement benefits and the resultant decrease in the accrued benefit obligation were
reflected in the fiscal 2014 financial statements of CPA Canada.

The most recent actuarial valuation of the non-pension post-retirement benefit plans for accounting
purposes was made on March 31, 2015.

2015 2014
Plan 1 Plan 2 Total Plan 1 Plan 2 Total

(i) Funded status of plans

Plan assets at fair value $ — $ — $ — $ — $ — $—

Defined benefit obligations (15,790) (1,517) (17,307) (12,971) (1,248) (14,219)
Defined benefit liability $(15,790) $(1,517) $(17,307) $(12,971) $(1,248) $(14,219)

CPA Canada Financial Statements 2014-2015 79

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

13. Post-retirement benefits (continued)

b) Other post-retirement benefits (continued)

2015 2014
Plan 1 Plan 2 Total Plan 1 Plan 2 Total

(ii) Plan assets at fair value

Balance, beginning of year $ — $ — $ — $ — $ — $—

Employer’s contributions 271 17 288 181 19 200
Benefits paid (271) (17) (288) (181) (19) (200)
Balance, end of year $ — $ — $ — $ — $ — $—

(iii) Defined benefit obligations

Balance, beginning of year $(12,971) $(1,248) $(14,219) $(13,461) $(1,199) $(14,660)

Current service cost (250) (43) (293) (487) (85) (572)
Interest costs on defined benefit
obligations (612) (57) (669) (573) (53) (626)
Benefits paid 271 17 288 181 19 200
Decrease in defined benefit
obligations arising from a
curtailment event — — — — 221 221
Actuarial gain (loss) (2,228) (186) (2,414) 1,369 (151) 1,218
Balance, end of year $(15,790) $(1,517) $(17,307) $(12,971) $(1,248) $(14,219)

(iv) Components of defined benefit costs

Current service cost $250 $43 $293 $487 $85 $572

Finance cost 612 57 669 573 53 626
Defined benefit costs recognized in
the statement of operations 862 100 962 1,060 138 1,198
Remeasurements and other items
• Actuarial loss (gain) 2,228 186 2,414 (1,369) 151 (1,218)
• Curtailment loss (gain) — — — — (221) (221)
Defined benefit costs recognized in
the statement of changes in net assets 2,228 186 2,414 (1,369) (70) (1,439)
Defined benefit costs $3,090 $286 $3,376 $(309) $68 $(241)

80 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

13. Post-retirement benefits (continued)

b) Other post-retirement benefits (continued)

(v) Actuarial assumptions

The significant actuarial assumptions used in measuring the defined benefit obligations and the
defined benefit costs for the years then ended are as follows:

2015 2014
Defined benefit Defined benefit Defined benefit Defined benefit
obligations costs obligations costs
Plan 1
Discount rate 3.80% 5.00% 5.00% 4.50%
Initial health care trend rate 5.99% 6.13% 6.13% 6.16%
Ultimate health care trend rate 4.50% 4.50% 4.50% 4.50%
Year that the health care trend
rate reaches the ultimate rate 2028 2028 2028 2028

Plan 2
Discount rate 3.80% 4.60% 4.60% 4.40%
Initial health care trend rate 5.73% 5.88% 5.88% 5.75%
Ultimate health care trend rate 4.50% 4.50% 4.50% 4.50%
Year that the health care trend
rate reaches the ultimate rate 2028 2028 2028 2028

c) Financial risks
The primary long-term risk of the post-retirement benefits plans to CPA Canada is that the plan
assets and future operational cash flows of CPA Canada will be insufficient to satisfy the plan liabilities.

A summary of the funded status of the plans is as follows:

2015 2014
Funded plan:
Plan assets at fair value $56,832 $51,014
Defined benefit obligations (61,069) (51,416)
(4,237) (402)
Unfunded plans:
Defined benefit obligations (26,078) (22,068)
Post-retirement benefits liability recognized in the statement of financial position $(30,315) $(22,470)

The liabilities of the plans expose CPA Canada to various forms of risk, including liquidity risk and the
risk associated with changes in actuarial assumptions, primarily interest rate risk with reference to the
discount rate used to measure the defined benefit obligations of the plans.

The assets of the plan expose CPA Canada to various forms of risk, including credit, liquidity and market
risk which is comprised of interest, currency and other price risk. The assets of the plan comprise
investments in index pooled funds with an asset mix of 40% (+/-3%) fixed income investments and 60%
(+/-3%) equities, and are rebalanced on a quarterly basis.

CPA Canada Financial Statements 2014-2015 81

 Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

13. Post-retirement benefits (continued)

c) Financial risks (continued)

CPA Canada mitigates the risks relating to the plan assets in the same manner as its financial instruments.
In addition, there is a natural offset in relation to the interest rate risk on the liability of its funded
plan arising from its investments in index pooled funds whose values are also affected by changes in
interest rates.

14. Commitments

a) Premises leases
Pursuant to a lease agreement for its Toronto office premises, which expires August 31, 2017, lease
incentives totalling $2,007, comprised of reduced rent benefits in the amount of $376 and tenant
inducements in the amount of $1,631, were received.

Pursuant to lease amending agreements for its Toronto office premises entered into during fiscal 2015,
the term of the lease was extended to August 31, 2027. Tenant inducements will be received in fiscal 2016
at the completion of renovations based on actual costs paid to a maximum of $2,241.

Pursuant to a lease agreement for its Montreal office premises which expires April 30, 2023, lease
incentives totalling $233, comprised of reduced rent benefits in the amount of $88 and tenant
inducements in the amount of $145 were received.

The premises lease agreements require CPA Canada to pay a proportionate share of property taxes and
operating expenses.

Future minimum annual commitments, including an estimate of the proportionate share of property taxes
and operating expenses for the office premises, are as follows:

2016 $3,344
2017 3,359
2018 3,471
2019 3,420
2020 3,429
Subsequent years 25,771
$42,794

b) Deferred lease incentives

2015 2014
Tenant Reduced Tenant Reduced
inducements rent benefits Total inducements rent benefits Total
Balance, beginning of year $645 $182 $827 $817 $226 $1,043
Amortization (146) (44) (190) (172) (44) (216)
Balance, end of year $499 $138 $637 $645 $182 $827

82 CPA Canada Financial Statements 2014-2015

Notes to the Financial Statements (continued)

for the year ended March 31, 2015 (all amounts in $ thousands)

15. Investment income

2015 2014
Interest from cash and cash equivalents $165 $266
Interest from short-term investments 35 11
Interest from guaranteed investment certificates 116 —
Interest from fixed income investments 221 216
Distributions from index pooled funds 1,976 1,892
Realized gains on sale of investments 481 407
Unrealized appreciation in fair value of index pooled funds 2,051 562
$5,045 $3,354

CPA Canada Financial Statements 2014-2015 83

 84

Notes

84
Notes 85

85
 Notes
86

86
87

87
Chartered Professional
Accountants of Canada
277 Wellington Street West
Toronto ON CANADA M5V 3H2
T. 416 977.3222 F. 416 977.8585

www.cpacanada.ca