Staying in Your Lane—and Staying Safe Professionally

By CPABC; Published in CPABC in Focus
Last Revision: 11/1/2020

CPAs are busy professionals with myriad responsibilities. With so much to keep track of on a daily basis, many members may lose sight of the wide range of services that require public practice licensing and some may end up crossing the line. Some may also be caught unprepared or ill-equipped when their professional services stray into unfamiliar areas. This article provides a cautionary look at both situations1.

Understanding what “public practice” means

CPABC Bylaw 100 (Definitions) defines public practice as “… offering to provide public accounting or other regulated services to the public.” This definition encompasses a broad spectrum of work—everything from assurance and compilation engagements to tax-related and statutory filing services, to accounting services involving summarization, advice, analysis, counsel, or interpretation. Many of these services require a public practice licence2.

Here are some examples of members engaging in public practice areas that require licensing from CPABC.

Example 1: Starting small

When CPAs find themselves between jobs, they may decide to “dabble” in public accounting—perhaps by preparing a small number of tax returns for family, friends, and close associates. What they might not realize, however, is that once a CPA even offers to provide accounting services to the public—this includes through advertising—they need a public practice licence. It doesn’t matter if their practice is nascent, small, or just a temporary measure to tide the CPA over until the economy improves—even if the CPA has no clients at all, they must be licensed once they extend the offer.

The reason is simple: A CPA’s friends and close associates are also members of the public. When a CPA offers to provide any “other regulated services” (such as tax preparation) to individuals outside their family3, they are effectively offering services to the public, which requires them to hold a public practice licence.

Note: A CPA must hold a public practice licence to provide any services constituting “public accounting” (i.e., audit, review, compilation, and other assurance services) irrespective of who they’re providing these services to.

Example 2: Serving as a CFO for multiple clients

New startup ventures seldom have the resources available to hire full-time CFOs, so they often seek out “CFOs for hire”—individuals who perform CFO-related services on contract for multiple clients. In such situations, it’s likely that the CFO-for-hire will need a public practice licence. CPAs who plan to pursue work in this area should take note.

Example 3: Preparing an “Accountant’s Report” trust report

CPABC’s professional conduct department has encountered more than one instance in which a CPA without assurance experience or training has completed an “Accountant’s Report” for submission to the Law Society of British Columbia.

Not only must a CPA hold a public practice licence to complete an Accountant’s Report—they must be licensed in the “audit” or “review” category, because these reports offer assurance regarding specific procedures the accountant must perform. A“compilation” or “other regulated services” category licence is not sufficientto complete and submit this kind of trust report to the Law Society.

Example 4: Providing special reports, attestations, and verifications

Occasionally, CPAs are asked to provide confirmation letters to various parties attesting to or confirming certain facts or situations. For example, a CPA may be asked to attest to the calculation of common area costs attributable to tenants or co-owners. Whatever the circumstances, providing any kind of attestation or verification—a form of assurance—requires a CPA to hold an “audit” or “review” category of public practice licence. Here again, a “compilation” or “other regulated services” category of licence is not sufficient.

Example 5: Preparing statutory filings when providing bookkeeping services

Although basic bookkeeping, which is essentially the data entry of basic transactions, does not meet the definition of public practice, clients often ask bookkeepers to prepare statutory filings, such as WorkSafeBC or PST returns. Whenever “basic bookkeeping” involves the preparation of statutory filings on a client’s behalf, a public practice licence is required.

Example 6: Providing consulting services

CPAs who work as consultants may be required to obtain a public practice licence, even if they do not use the CPA designation in their business name or signature block. It all depends on the nature of the consulting service and whether the service includes areas covered by the definition of public accounting and other regulated services. For example, a forensic accountant—a CPA who consults on accounting matters related to the law—is required to hold a public practice licence from CPABC. By contrast, a CPA who consults on matters unrelated to accounting (e.g., human resources) is not.

Example 7: Using the designation to describe business services

If a member uses the full wording “Chartered Professional Accountant” either as part of their firm name or as a descriptor of their business services, they are deemed to be carrying on the practice of public accounting as per Rule 402.1 of the CPABC Code of Professional Conduct (CPA Code)—regardless of the actual nature of their business services.

Avoiding wrong turns

CPABC occasionally receives complaints about CPAs who’ve gotten in over their heads in technical areas where they have little or no experience or training. The relevant rules of the CPA Code are as follows:

  • Rule 202.1 (Integrity and due care) – Members must “… perform professional services with integrity and due care.” 
  • Rule 203 (Professional competence) – Members must “… sustain professional competence by keeping informed of, and complying with, developments in professional standards….”
  • Rule 206.1 (Compliance with professional standards) – Members must “… perform professional services in accordance with generally accepted standards of practice of the profession.”

Here are two examples of members straying outside their area of competence.

Example 1: Preparing foreign tax returns

CPAs who prepare tax returns should ensure that they have the proper training for and familiarity with the tax laws of the jurisdictions in which they’re filing. For example, a recent CPABC investigation revealed that a practitioner with insufficient training in US tax law failed to complete their client’s US tax returns competently and completely missed the requirement that their client had to file state tax returns in several states.

Example 2: Providing labour market impact assessments

Faced with a shortage of skilled labour, some businesses hire temporary foreign workers. These businesses must complete the Government of Canada’s Labour Market Impact Assessment application process, which requires them to submit documents attesting to the fact that they operate a legal business and their job offer is legitimate. The government only accepts these particular attestations from lawyers and CPAs in good standing in their respective provinces.

Some business owners have approached CPABC members to seek attestations confirming that their businesses are in “good financial standing” and thus able to meet all financial obligations to any temporary foreign worker hired. However, there is no definition of “good financial standing” in the Labour Market Impact Assessment application process, nor is there a list of specified procedures that a CPA should undertake, so it’s unclear how a practitioner could meet CPABC’s professional standards in providing this attestation.

Moreover, it’s unlikely that any practitioner would be able to accurately predict how well a client’s business will perform, let alone provide any kind of assurance on the client’s ability to meet financial obligations. Consequently, members should not provide this kind of attestation to support their client’s Labour Market Impact Assessment application. Furthermore, since an attestation is not the only option acceptable to the government, practitioners might consider helping their clients put together some of the other acceptable documents instead.

The consequences of misconduct

Penalties assessed on CPAs through the investigation and disciplinary process vary depending on the specific circumstances of each case, and each case is unique; however, penalties often include fines and usually include the costs of the investigation, which often exceed the fines. In serious cases, the Investigation Committee may refer the matter to CPABC’s Disciplinary Committee, which may find that suspension or cancellation of membership is appropriate under the circumstances.

Do you need guidance?

CPABC has professional standards advisors who are here to help. You can consult them for confidential guidance to ensure that you stay compliant with the CPA Code when navigating difficult situations. Contact our advisors:


  1. This article elaborates on the article “Dabbling in Public Practice without a Licence: It Can Cost You,” which appeared in the July/August 2016 issue of CPABC in Focus (32-33).
  2. For a complete list of “other regulated services,” see the bylaw definitions in the Member & Practice Regulation section of bccpa.ca.
  3. The CPABC Bylaws do not include a specific definition of “family” but do include specific references to a spouse, parent, child, or sibling. However, many people would consider the definition of “family” to include grandparents and grandchildren. Given the various possible interpretations, please contact CPABC’s professional advisory team for guidance specific to your circumstances.

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