Challenging conditions fail to
dampen growth

A rise in the Canadian dollar and the US subprime crisis has
increased the volatility in the Canadian economy but the country’s
accounting profession has enjoyed 10 percent growth despite its
clients facing increasing economic challenges, according to this
year’s IAB Canada survey (see IAB Country Survey:
Robust profession rises to the challenge).

Lionel Goldman, who chairs Praxity Global Alliance participant
Collins Barrow, explained that the Canadian dollar’s performance
has dominated the financial headlines in 2007. “This single factor
presented challenges for every public accounting firm’s
manufacturing and distribution clients, as well as other clients
involved in cross-border and international commerce,” he
said.

Deloitte chief executive Alan MacGibbon said the firm’s clients
were preoccupied with “navigating the credit crisis and dealing
with the volatility of the Canadian dollar”.

Strong oil profits and a stable regulatory environment have
insulated the Canadian profession from many of the pressures facing
its clients, with industry revenues rising to C$5.9 billion ($5.9
million). MacGibbon said the Canadian economy continued to grow,
albeit at a slower pace from previous years. “There are significant
regional differences between the various parts of the country.
Western Canada is surfing the oil wave and Eastern Canada is seeing
a much slower economy with the difficulties of exporters who have
to deal with a Canadian dollar that is at a 30-year high. All of
these factors suggest a challenging yet exciting year ahead for the
professional services industry,” MacGibbon said.

Canadian firms speaking with IAB have also reported more
comfort working with the regulatory oversight bodies such as the
Public Companies Accounting Oversight Board and Canadian Public
Accountability Board. Most firms anticipated a steady increase in
work relating to the changeover to IFRS from 2011, which is
expected to be announced in March by Canada’s Accounting Standards
Board. The country’s coming shift to IFRS is “the most important
regulatory change we see on the horizon”, KPMG chief executive Bill
MacKinnon said.