The Firm was the auditor of the election campaigns of candidates running in provincial and federal elections, and for constituency/riding political associations. A partner of the Firm held a volunteer position with two political campaigns in which the partner exercised a function of leadership or direction. The same partner also received rental income from one of the candidates’ campaigns.
Although the partner did not have a role in the audit engagements and was not engagement partner, the Firm did not adequately consider the threats to its independence these relationships had on its objectivity. It did not document its considerations and conclusions in this regard, as required by professional standards.
The Investigation Committee determined that the Firm contravened the following:
CPABC Code of Professional Conduct
201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
202.2 - Objectivity
203 - Professional competence
204.1 - Independence (Assurance and specified auditing procedures engagements)
204.2 - Independence (Compliance with Rule 204.1)
204.3 - Independence (Identification of threats and safeguards)
204.5 - Independence (Documentation)
204.20 - Independence (Audits under elections legislation)
206.1 - Compliance with professional standards
CGA Code of Ethical Principles and Rules of Conduct
EP7 - Independence
R701 - Audit, Review Engagement, Other Assurance and Specified Auditing Procedures Engagements
The Committee recommended that the Firm:
- accept a reprimand;
- pay a fine of $1,000; and
- pay expenses of $3,548 plus GST of $177.40.