Members setting up a new public practice have many decisions to make, including choosing the name of their firm. Later on, when new partners are brought in, practitioners often consider changing the name of their firm. So, what can practitioners use as their firm name?
Firms are not restricted to using the names of their owners, such as “Wang, Kumar & Co, Chartered Professional Accountants” or “E. Aaron Presley, Chartered Professional Accountant”, and are permitted to use non-personal names. We refer you to Rule 401 in the Code of Professional Conduct, which sets out the requirements for practice names, and highlight Rule 402 which sets out the requirement for using the “Chartered Professional Accountant(s)” styling in your practice name.
A member or registered firm shall engage in the practice of public accounting only under a name or style which:
- is not misleading;
- is not self-laudatory;
- does not contravene professional good taste; and
- has been approved by the Public Practice Committee or the Registrar in a manner specified by the Board.
Subject to sections 44 and 45 of the Act and Bylaw 506, members and registered firms shall carry on the practice of public accounting under the descriptive style of "Chartered Professional Accountant(s)" unless it forms part of the firm name or the member or firm is exempted by CPABC. Regardless of the functions actually performed, the use of “Chartered Professional Accountants(s)” as part of the firm name or as a descriptive style, in offering services to the public, shall be regarded as carrying on the practice of public accounting for the purposes of the CPA Code.
A related business or practice shall not be designated "Chartered Professional Accountant(s)", "Public Accountant(s)" or “Professional Accountant(s)”.
Practitioners wanting to use “and Company” or similar wording can find clarification in the guidance to Rule 401 as follows:
- It is in the interest of all members of CPABC that members and firms be allowed to conduct their practices under names which reflect their individual preferences and which are appropriate for their particular marketplaces. This Guidance provides assistance for members and firms in the selection of practice names and in the identification with other professional service organizations.
- Members, firms and related businesses or practices should ensure, at all times, that any information contained in their practice names about themselves, their firms or their services is accurate. The following are examples of practice names containing inappropriate information:
- any implication in the practice name that the practising unit is larger than it is, such as by use of plural descriptions or other misleading use of words. The use of “and Company” or similar wording in a practice name is permitted, if it is not misleading with respect to the total number of full-time equivalent persons, whether member or not, performing professional services within the practice;
- any implication in the practice name that a person is a partner or a former partner of a practice, when the person is not;
- any reference to representation or association which is not in conformity with the facts;
- any implication that separate firms sharing office space, staff or other resources or in other cost-sharing arrangements are in partnership or otherwise share ownership of a practice;
- any reference in the practice name to particular services provided where the practice is not currently able to provide those services; and
- any statement in the practice name that may create false or unjustified expectations as to the results of a particular engagement.
- When a member or firm engaged in the practice of public accounting or a related business or practice participates in an organization whose members practise public accounting internationally, with professional engagements accepted and reports or opinions issued in the international name, the member, firm or related business or practice may refer to such international name on professional stationery and in name plates, directory listings, announcements and brochures by using terms such as "internationally", “globally”, "international firm", or “global firm”. General references to "offices throughout the world" or "offices in principal cities throughout the world" imply broad coverage and should be used only where the international organization's members practise public accounting in many countries.
- A member or firm engaged in the practice of public accounting or a related business or practice may have an arrangement with another person or organization whereby one acts for the other in a particular location, and the assignment, by agreement, may be in the name of one of them. In such circumstances it is appropriate, if desired, for the member, firm or related business or practice to refer to the fact of such representation by a suitable reference to the location and the name and/or address and professional designation of the representative, with a description of the relationship as being "represented by". If representation arrangements exist in a number of locations it may not be possible to give full details of each, and in such case it would be appropriate, if desired, to refer to the fact of representation in the particular locations, specifying the locations individually. Generally, references such as "represented throughout the world", which may not be factual and may be misleading, should be avoided. In any public reference to representation, the representative must be a person or organization practising public accounting.
- Members, firms and related businesses or practices may associate themselves with international organizations which do not practise public accounting and which exist primarily to provide their members with access to international public accounting services through referrals or other means. In these cases it is appropriate to make public reference on professional stationery and elsewhere to membership in a bona fide international organization by using a term such as "a member of (name), an international association of accounting firms". However, terms such as "internationally", “globally”, "international firm" or “global firm” should not be used in those circumstances. General references such as "members throughout the world" should be used only where there are in fact members of the organization in many countries. References such as "represented throughout the world" should be avoided unless they are factual and not misleading.
- Members, firms and related businesses or practices should ensure that their practice names or styles are not self-laudatory and do not claim superiority over any other member, firm or related business or practice. Care should be taken in using the word “The” in the firm name so that it does not imply exclusivity.
- Practice names that might tend to lower public respect for the profession should not be used. Care should also be exercised with respect to the use of acronyms.
- In general, approval will be given to non-personal firm names unless they are misleading, self-laudatory or contravene professional good taste. However, there may be certain other considerations which will affect the approval decision. A practice name that is so similar to that of another firm registered in the same area as to cause confusion in the minds of the public may not be approved. Consideration will also be given to cultural and linguistic sensitivities in deciding whether to approve a non-personal firm name.
- The Public Practice Committee, in its discretion, is permitted to be flexible in transitional situations. For example, a member engaged in the practice of public accounting as a sole proprietor or, where permitted, an incorporated professional, may apply to the Public Practice Committee for permission to practise for a specified period of time under both the member's approved name and, with the predecessor's written authorization, the name used by a predecessor sole proprietor or firm.
- Other situations where transitional flexibility may be granted include those where a previously approved firm name becomes inappropriate. An example of such a situation would occur when, due to the departure of a partner, the firm name becomes misleading with respect to the size of the firm. In such cases, the member or firm may apply to the Public Practice Committee for permission to continue to use the name for a specified period of time.
Guidance to Rule 402
- The requirement to carry out the practice of public accounting under the descriptive style “Chartered Professional Accountant(s)” does not preclude a firm from advertising professional services without reference to “Chartered Professional Accountant(s)”. However, unless prohibited by the Act and bylaws or otherwise exempted by CPABC, all material that refers to the practice of public accounting, including printed promotional material and website content, must include a reference to “Chartered Professional Accountant(s)” in conjunction with the firm name. In addition, such a reference must be included on audit reports, review engagement reports, compilation engagement reports and other material and correspondence that relates to the provision of public accounting services, such as engagement letters, invoices, management letters and responses to requests for proposals.
- In a jurisdiction that may permit the use of the initials “CPA” as part of a firm name, such use would not be considered to meet the requirement for the use of the descriptive style “Chartered Professional Accountant(s)” when carrying on the practice of public accounting unless the jurisdiction specifically permits the use of the initials for that purpose.