A company, controlled by the Member, provided a client with a mortgage on a property owned by the client. The Member:
- Contacted the previous mortgagor of the property (which was also an audit client of the Member) to discuss the client’s affairs, without the express consent of the client.
- Prepared Notice to Reader (NTR) financial statements for a company controlled by the client, but did not disclose in the NTR report that the Member’s independence was impaired as a result of their financial relationship with the client and the mortgage.
- Withheld a portion of the mortgage proceeds from the client and used those funds to pay for the Member’s accounting services, without obtaining the client’s express consent and understanding of the transaction.
The Investigation Committee determined the Member contravened the CPABC Rules of Professional Conduct as follows:
201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
204.1 - Independence – Assurance and specified auditing procedures engagements
204.10 - Independence – Disclosure of impaired independence
206.1 - Compliance with professional standards
208.2 - Confidentiality
210 - Conflicts of interest
212.2 - Handling of property of others
The Committee recommended the Member:
- accept a reprimand;
- pay partial expenses of $3,856 plus GST;
- self-report to the BC Financial Services Authority (“BCFSA”) regarding activity that may require registration with the BCFSA in a manner satisfactory to the Director, Professional Conduct, and provide CPABC with a copy of the self-report; and
- take the following CPABC Professional Development courses at the next available dates:
- Ethics at our Core
- Shades of Grey: Ethics in the workplace