Investigation Committee Determinations and Recommendations

The Member offered corporate services to a client that are regarded as the practice of law by the Law Society of British Columbia.  Such services are restricted to lawyers under the Legal Profession Act. The Member is not a lawyer. Further, the client alleges the Member used an unprofessional tone in their communications, which the Member denies.

The Investigation Committee determined the Member contravened the following Rules of the CPABC Code of Professional Conduct:

201.1 - Maintenance of the good reputation of the profession
213 - Unlawful activity

The Committee recommended the Member:

  1. Accept a reprimand;
  2. Pay expenses of $1,371; and
  3. Attend and successfully complete a professional development course in communications in situations of conflict, which is satisfactory to the Director, Professional Conduct.

The Member was retained by a client to assist with a taxation matter. When a dispute arose between the Member and the client regarding the services provided and the billing, the content and tone of some of the Member’s communications with the client were unprofessional.   

The Investigation Committee determined the Member contravened Rule 201.1 (Maintenance of the good reputation of the profession) of the CPABC Code of Professional Conduct.

The Committee recommended the Member:

  1. Accept a reprimand; and
  2. Pay partial expenses of $500.

Disciplinary proceedings were brought by the Public Company Accounting Oversight Board (PCAOB) in the United States against the Member and their firm as a result of failing to comply with PCAOB rules. The PCAOB found the Member altered firm working papers and that employees of the firm that were supervised by the Member improperly backdated working papers. The Member also failed to co-operate with the PCAOB’s inspection of the firm.

PCAOB issued an order that:

  1. Censured the Member and the firm;
  2. Revoked the firm’s registration;
  3. Barred the Member from being associated with a public accounting firm registered with the PCAOB; and
  4. Imposed a penalty of US$50,000.

The Member also failed to self-report the PCAOB’s Order to CPABC as the Rules of the CPABC Code of Professional Conduct (the Code) and Bylaws require.

The Investigation Committee determined the Member contravened the following:

Rules of the Code:

102.3 - Matters to be reported to CPABC
201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
203 - Professional competence
205(a) - False or misleading documents and oral representations
501 - Policies and procedures for compliance with professional standards
502 - Policies and procedures for the conduct of a practice

Bylaw:

511(1) - Obligation to Report

The Committee took into account the PCAOB sanctions.  The Committee recommended the Member:

  1. Accept a reprimand;
  2. Pay a fine of $1,000 for a breach of Rule 102.3 and Bylaw 511(1); and
  3. Pay expenses of $2,836.

The Member borrowed money from a private individual (the “lender”) to engage in a real estate transaction (the “property”). The Member misrepresented to the lender the extent of their indebtedness concerning the property, and failed to take steps to ensure that the loan was properly secured.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

201.1 - Maintenance of the good reputation of the profession
205 - False or misleading documents and oral representations

The Committee took into account that the Member had repaid to the lender the amount borrowed.  The Investigation Committee recommended that the Member:

  1. Accept a reprimand; and
  2. Pay partial costs of $2,000.

Mr. Shumka:

  1. Was licensed by CPABC in public practice until 2019, when he requested that his practice licence be cancelled. Despite the cancellation of his licence, he continued to engage in public practice by preparing personal tax returns for the public. During this period, he also failed to maintain professional liability insurance.
  2. Negligently prepared the tax returns of clients. As a result, the clients were assessed incorrect tax liabilities by the Canada Revenue Agency (CRA).
  3. Failed to use the descriptive style “CPA, CA” as the Rules of the CPABC Code of Professional Conduct (Code) require.

The Investigation Committee determined Mr. Shumka contravened the following:

Rules of the Code:

201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
205(a) - False or misleading documents and oral representations
208 - Confidentiality of information
218 - Retention of documentation and working papers
402.1&.2 - Use of descriptive style

Bylaws:

506 - Legacy designations
700 (1 to 5) - Public Practice by CPA Members

The Committee took into consideration the personal circumstances of Mr. Shumka.  The Committee recommended that Mr. Shumka:

  1. Accept a reprimand;
  2. Pay a fine of $2,000;
  3. Pay partial costs of $2,000;
  4. Agree to
    1. apply for proper licensure for public practice within 90 days, obtain professional liability insurance as required, and not to engage in public practice without obtaining such licensure.
    2. file with the Registrar a document retention and data backup policy satisfactory to the Registrar prior to receiving such licensure.
    3. maintain the standards of documentation that the Rules require.
    4. correctly use the designation “CPA, CA” as the Rules and Bylaws require.
    5. apply for and obtain an EFILE account and number with CRA.
  1. Successfully completes at the next available dates:
    1. A course in taxation satisfactory to the Director, Professional Conduct
    2. A course in practice management satisfactory to the Director, Professional Conduct
    3. A course in ethics satisfactory to the Director, Professional Conduct, and
  1. Accept the publication of a public notice of this Determination and Recommendation which identifies Mr. Shumka.

While applying for membership in CPABC after completing the requirements for the CPA Professional Education Program, the Candidate failed to disclose a previous academic infraction issued by the Chartered Professional Accountants Western School of Business.  The Candidate represents that the omission was due to an oversight, as they did not believe disclosure was required.

The Investigation Committee determined the Candidate contravened the CPABC Code of Professional Conduct as follows,

103 - False or misleading applications
201.1 - Maintenance of the good reputation of the profession

The Committee recommended the Candidate:

  1. Accept a reprimand; and
  2. Pay expenses of $707.

The Member provided public accounting services as a sole practitioner, while concurrently the Chief Executive Officer and minority shareholder of a mortgage investment corporation (MIC). A mortgage was issued by the MIC to the Complainants, who were also accounting clients of the Member. The Complainants experienced increased interest expenses when they failed to respond to several notices from the MIC that the mortgage had matured.  

The issuance of the mortgage placed the Member in a conflict of interest. However, the Committee did not conclude that the Member’s conduct lacked objectivity in the provision of the professional services and noted that the Complainants’ losses for the increased mortgage interest were caused by their failure to respond to the MIC’s communications with them, not by the actions of the Member.

The Investigation Committee determined the Member contravened Rules 210.1 & 210.2 (Conflicts of Interest) of the CPABC Code of Professional Conduct. 

The Committee recommended the Member accept a warning to avoid future conflicts of interest and ensure adequate safeguards are in place and documented if conflicts of interest arise.

The Member met with a potential client and engaged in the practice of law by offering or providing services in relation to the incorporation of a business in Canada. The Member is not authorized to practice law. The Member sent an invoice for these legal services to the potential client that was issued by a non-CPA firm that is owned by the Member’s spouse. 

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows:

201.1 - Maintenance of the good reputation of the profession
213 - Unlawful Activity
408.1 - Association with non-registrant in public practice

The Investigation Committee recommended the Member:

  1. Accept a reprimand; and
  2. Pay expenses of $1,265.

The Member’s firm had a bookkeeping engagement with a client which included preparing the employee payroll. The Member made errors in the payment of vacation pay, statutory holidays and some employee withholdings. These errors were not detected by the client for an extended period. However, some of these errors would have been minimized if the Member had learned the benefit policies of the client.        

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows:

201.1 - Maintenance of the good reputation of the profession
202.1 - Due care
203 - Professional competence
206.1 - Compliance with professional standards

The Investigation Committee recommended the Member:

  1. Accept a reprimand;
  2. Pay partial costs of $1,000; and
  3. Successfully complete a course in payroll management.

The Member assisted a charity in preparing accounting and related information to accompany a grant application. The terms of the relationship were not clarified with the Board of the charity in advance of the Member assisting it. When a personal dispute arose with people associated with the charity, the Member did not communicate professionally and truthfully, and rendered a billing which did not adhere to professional standards.    

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care

The Investigation Committee recommended the Member:

  1. Accept a reprimand;
  2. Pay a fine of $1,000; and
  3. Pay expenses of $2,890.

For a period of 3 weeks, the Candidate held full-time employment with two separate employers, unbeknownst to each employer and in contravention of the Candidate’s employment agreements with each of them. The Candidate resigned from one employer and employment was terminated by the other employer.     

The Investigation Committee determined the Candidate contravened the CPABC Code of Professional Conduct as follows,

201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
205 - False or misleading documents and oral representations
210 - Conflicts of interest

The Investigation Committee recommended the Candidate:

  1. Accept a reprimand; and
  2. Pay partial expenses of $1,000.

While applying for membership in CPABC after completing the requirements for the CPA Professional Education Program, the Candidate failed to disclose a previous academic infraction issued by the Chartered Professional Accountants Western School of Business. The Candidate represents that the omission was due to an oversight.

The Investigation Committee determined the Candidate contravened Rule 103 (False or misleading applications) of the CPABC Code of Professional Conduct. 

The Committee recommended the Candidate accept a warning to be more careful in the future.

A Member was the subject of three complaints. 

In the first case, the Member agreed to prepare personal tax returns for married clients. The Member did not respond to repeated messages from the clients and did not complete the engagements in a timely manner. As a consequence, filing deadlines were missed.

In the second case, the Member agreed to prepare personal tax returns for a client. The Member did not respond to repeated attempts by the client to contact them and did not complete the engagement in a timely manner. 

In the third case, the Member agreed to prepare personal tax returns for a client. The Member made errors in the client’s tax return and did not respond to repeated attempts by the client to contact them. 

In all three cases, The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows:

201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care

The Investigation Committee recommended the Member:

  1. Accept a reprimand; and
  2. Pay partial expenses of $500

In making its Recommendation, the Committee took into account that the Member was experiencing difficult personal and health circumstances during the period that the complaints arose.

While applying for membership in CPABC after completing the requirements for the CPA Professional Education Program, the Candidate failed to disclose a previous academic infraction issued by the Chartered Professional Accountants Western School of Business. The Candidate represents that the omission was due to an oversight, as they did not believe a disclosure was required.

The Investigation Committee determined the Candidate contravened the CPABC Code of Professional Conduct as follows:

103 - False or misleading applications
201.1 - Maintenance of the good reputation of the profession

The Investigation Committee recommended the Candidate:

  1. Accept a reprimand;
  2. Pay expenses of $747 ; and
  3. Promptly resubmit a corrected “Membership Application - Character Declaration” form to the Director, Professional Conduct.

The Member's Firm was contracted to provide Chief Financial Officer (CFO) services for a junior venture company (the "Company").  The Member was the designated person in the contract to provide those services. 

Unaudited interim financial statements of the Company were filed with securities regulators.  Under securities laws,  the Member, as CFO, was required to make certain statutory certifications of the filings.

The staff of the British Columbia Securities Commission (BCSC) questioned the accounting method used for a significant transaction of the Company. The staff of the BCSC subsequently issued a Cease Trade Order against the Company because, in the opinion of BCSC staff, the Company had not made satisfactory statutory securities filings.  The Member’s efforts to support the accounting treatment were insufficient to resolve the Cease Trade Order.  The Company restated the financial statements, and the Cease Trade Order was lifted by the BCSC after the Member resigned from the Company.

During the time the Member’s Firm was contracted to provide CFO services, the Member held a share position that was not disclosed in the Company's financial statements as the CPABC Code of Professional Conduct requires. The Committee noted that the Member properly disclosed their share transactions in other public securities filings (the SEDI system).

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows:

201.1 - Maintenance of the good reputation of the profession
202.1 - Due care
202.2 - Objectivity

The Committee recommended the Member:

  1. Accept a reprimand; and
  2. Pay expenses of $5,500.

While applying for membership in CPABC after completing the requirements for the CPA Professional Education Program, the Candidate failed to disclose a previous academic infraction issued by the Chartered Professional Accountants Western School of Business. The Candidate represents that the omission was due to an oversight.

The Investigation Committee determined the Candidate contravened Rule 103 of the CPABC Code of Professional Conduct (False or misleading applications).

The Committee recommended the Candidate accept a warning to be more careful in the future.

The Member performed specified audit procedures and completed a Law Society Reporting Form Trust Report for a law firm. The Report was completed and submitted to the Law Society of British Columbia.  The Law Society subsequently conducted a review of the Report.  The Member:

  1. was not independent of the law firm as they were employed by the firm as Chief Financial Officer;
  2. was unqualified to perform specified audit procedures;
  3. provided inaccurate or misleading responses to the Law Society’s queries; and
  4. did not have appropriate licensure from CPABC to conduct this work.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows:

Rules:

101.1 - Compliance with governing legislation, bylaws, regulations and the Code
201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
203 - Professional competence
204.1 - Independence – Assurance and specified auditing procedures engagements
205 - False or misleading documents and oral representations
206.1 - Compliance with professional standards

Bylaw

700(1)&(2) - Licensure for Public Practice

The Committee recommended the Member:

  1. Accept a reprimand;
  2. Pay fine of $1,000;
  3. Pay expenses of $3,188;
  4. Successfully complete the CPABC professional development course Ethics in Professional Practice – What Canadian CPAs Need to Know; and
  5. Provide confirmation to the Director, Professional Conduct that the Member contacted the Law Society and the law firm about the Committee’s determination.

The Member was retained by a client to perform specified audit procedures and complete a Law Society Reporting Form Trust Report for their client on two engagements. The Reports were completed and submitted to the Law Society of British Columbia. The Law Society subsequently conducted a review of the client’s trust accounts, and noted numerous breaches of trust accounting rules that the Member should have reported to the Law Society.

In addition, the Member was not independent of the client, as they also performed bookkeeping services for them.  The Member did not respond to Law Society queries during its review of the client’s transactions, and in this matter, provided information and responses to CPABC’s investigator which upon further enquiry, were incorrect or misleading.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows

104.1 - Requirement to co-operate
201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
203 - Professional competence
204.1 - Independence – Assurance and specified auditing procedures engagements
205(a) - False or misleading documents
206.1 - Compliance with professional standards

The Committee recommended the Member:

  1. Accept a reprimand;
  2. Pay a fine of $2,500; and
  3. Pay expenses of $4,358.

 

The Member self-reported to CPABC that, while an assurance partner with a firm, they did not adhere to the Canadian CPA Assurance Handbook, firm policy and other professional requirements with respect to file documentation and signoff. The Member personally completed various assurance working papers, and the financial statements and related assurance reports were issued before their work was reviewed. Additionally, the Member did not close out the assurance files within 60 days as per the Canadian Assurance Standard and firm policy.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows:

201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
206.1 - Compliance with professional standards

The Committee recommended the Member:

  1. Accept a reprimand; and
  2. Pay expenses of $1,175.

 

While applying for membership in CPABC, the Member failed to disclose a previous academic infraction issued by the Certified General Accountants Association of British Columbia. The Member represents the omission was due to an oversight.

The Investigation Committee determined the Member contravened Rule 103 of the CPABC Code of Professional Conduct (False or misleading applications).

The Committee recommended the Member accept a warning to be more careful in the future.

Mr. Suelzle incorrectly prepared a client’s personal tax return, making several material errors. When the Canada Revenue Agency made a time-sensitive request for additional information, Mr. Suelzle failed to respond and failed to advise his client. Mr. Suelzle did not adequately respond to repeated enquiries from the client as to the status of the client’s return.

During the investigation, Mr. Suelzle provided inadequate or incomplete responses to requests from the investigator.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows:

104.1&.2 - Requirement to co-operate
201.1 - Maintenance of the good reputation of the profession
202.1 - Due care
203 - Professional competence
205(a) - False or misleading documents and oral representations

The Committee recommended Mr. Suelzle:

  1. accept a reprimand;
  2. pay a fine of $25,000;
  3. pay expenses of $5,145;
  4. successfully complete a professional development course in effective communications;
  5. enter into an arrangement with a senior member of the profession with expertise in practice management (the “Advisor”), the terms of which include:
    1. the Advisor will conduct an overall review of Mr. Suelzle’s practice management. The Advisor must periodically review and have periodic mentoring discussions with Mr. Suelzle to promote better understanding by Mr. Suelzle of applicable professional, practice management and ethical standards. The Advisor must meet with Mr. Suelzle at least once every three months; 
    2. The Advisor must be given access by Mr. Suelzle to sufficient documentation to allow the Advisor to understand the nature, extent and issues related to Mr. Suelzle’s practice relevant to this matter;
    3. This arrangement will last one year; and
    4.  By no later than April 30, 2024, Mr. Suelzle must provide written notification to the Director, Professional Conduct, that Mr. Suelzle has completed at least four meetings with the Advisor.