Any member that is registered for public practice (except in the Other Regulated Services – Non-Reviewable category) is subject to a practice review. You will be contacted in advance to schedule the review.
Sole practitioners are practice reviewed as individuals. However, offices with multiple partners and/or authorized staff have all practitioners reviewed together. If the engagements of one partner are assessed as not meeting standards, the entire office would be assessed as not meeting standards and subject to reinspection in at least the type of work where standards were not met at a cost to the firm (currently $200/PRO/hour).
For larger firms with multiple offices a practice review is typically done separately for each office. However, multiple offices are be reviewed together as one inspection when their operations are very integrated. This means that the results of any of the partners in any of the offices in the inspection apply to all of the partners and all of the offices.
To determine how integrated multiple offices of the same firm are, we typically consider:
- Do partners allocate time between different offices and release engagements out of different offices?
- Are engagement staff located in one office or do they work in different locations?
If a firm has multiple offices who operate separately and would like to have these offices inspected during the same time period, we will try our best to accommodate this. Please note that the inspection due date would be the earliest due date of any the offices being inspected.
During a practice review, depending on the practice profile of the firm, a Practice Review Officer (“PRO”) would look at a sample of engagements including:
- Other assurance engagements (legal and real estate trusts, special reports)
- Compilation files
- T1 and T2s
- FOFI engagements
This is not an exhaustive list of reviewable work. Contact Craig Smith, Director, Practice Review for more information.
If you plan to retire and cancel your public practice license, your practice review may be waived upon receipt of a Request for Cancellation of Public Practice License form.
If you have performed and/or if you plan to perform any engagements, even a very small number, you will continue to be required to have a practice review.
For new practitioners who want an in-depth overview, a free, online version of the PD course, “Preparing for Practice Review” is available here.
All new firms are required to have a practice inspection within one year of registration. We recognize that some firms may not yet have reviewable work at the date that they are contacted to provide a list of assurance and notice to reader engagements to CPABC.
Reviewable work includes audits, reviews, trust engagements, special reports (ie. CAS 800, review procedures on specified amounts), compilations/Notice to Readers (“NTRs”), T2 and T1 engagements. If you have not yet released any of these engagements, please respond via email with:
- Confirmation that you have not yet performed any reviewable work
- The expected completion date and type of engagements for the reviewable work you plan to perform (ie. “Expect to have three compilations, three T2s completed by December 2021 and ten T1s completed by end of April 2022”)
CPABC performs the inspections of home based offices as a desk review, where files are selected from the firm’s list of assurance and compilation engagements and then submitted to CPABC online or by mail. Please note that due to the ongoing Covid-19 pandemic, CPABC is currently performing all inspections as desk reviews until at least Fall 2021.
Practices considered to be home-based offices
- A firm located inside a practitioner’s home.
- A firm who performs work and stores client records in their home and meets clients in a third party location (ie. clients’ offices or a rental meeting space)
- A firm where the work is performed in various locations, files are stored in the cloud, and there is no separate office where the practitioner meets with clients during normal business hours.
Practices not considered to be home-based offices
- A firm who operates an office on their property, but not in their home (ie. a garage or other building), which is open to the public.
- A firm with a separate office location where clients are met during business hours where a practitioner also occasionally works from home.
A PRO will provide file selection and file submission instructions to you approximately two months prior to your practice review deadline. Electronic files should be submitted using our secure FileCloud.
Some items to keep in mind when using FileCloud
- The username for FileCloud is the email address mentioned in your File Selection Email.
- Please check your junk/trash bins if you have not received file submission instructions within the timelines outlined.
- Password Requirements: The file cloud password must be at least eight characters long with at least: ONE CAPITAL letter, ONE Lowercase letter, ONE symbol, and ONE number.
- If you are unable to login in, please contact IT at: email@example.com.
All paper files received by the Practice Review team are stored and securely locked in a room at CPABC’s office with restricted access. These files are inspected only on CPABC’s premises and then returned to the practitioner once the practice review is complete. For electronic files, practitioners are provided access through a secure portal. Instructions are provided to the practitioner once it is confirmed that the files will be provided electronically.
Regardless of the method of transmission (paper or electronic), CPABC is governed by a strict confidentiality policy, as noted in Part 9.69 of the CPABC Act and further detailed here.
Special Reports are assurance or attestation reports. They can cover performing assurance procedures at the request of a third party on certain areas such as client revenues, expenses, salary/draws, & other financial statement information. They can also include advising on the results of applying specified procedures to financial information or a report on compliance with a specific agreement.
Some examples of special reports are those prepared under CAS 805, Section 9100 and 9110, and CSAE 3000 and CSAE 3001.
The list of your firm’s assurance and notice to reader engagements is what we use to select files for inspection. Practitioners licensed in ORS – Reviewable who perform T1 and T2 engagements only do not need to submit this list.
CPABC has provided a sample template; however, you are welcome to provide the list in any other format as long as it contains for each engagement partner / authorized staff:
- Name of the client
- Type of engagement (audit, review, compilation, trust engagement, or special report)
- Financial reporting framework (IFRS, ASPE, ASNPO, PSAB)
- Whether or not the engagement is considered high risk*
This refers to the engagement partner or authorized staff (i.e. staff with signing authority) who is responsible for the sign off and release of the file. We recognize that some firms may assign a relationship partner to an engagement. While this can be helpful for a firm’s internal purposes, for the inspections, we need to identify who the engagement partner is as we select a sample of files for each engagement partner and authorized staff.
CSQC 1, para C12 defines engagement partner as follows: The partner or other person in the firm who is responsible for the engagement and its performance, and for the report that is issued on behalf of the firm, and who, where required, has the appropriate authority from a professional, legal or regulatory body.