Firms are reminded that assurance engagements can be signed off only by appropriately licensed members of CPABC or another CPA provincial body.
Section 47 of the CPA Act restricts assurance activities by providing that only CPA members in good standing, professional accounting corporations, or registered firms can provide services in accordance with standards of professional practice published by CPA Canada.
While in the past there might have been situations where a partner holding a non-Canadian designation was authorized to sign off on assurance engagements on behalf of a registered firm, this is no longer permissible. It is consistent with CPABC’s regulatory mandate and the intent of the CPA Act to permit only CPA members to sign off on engagements that are restricted to CPAs under Section 47(1) of the Act, even though a registered firm is taking responsibility for all staff and their activities.
Rule 502 on a firm’s maintenance of policies and procedures for the conduct of a practice was amended last year to prevent partners or others who are not “professional colleagues” from signing off on or releasing engagements to perform services referred to in section 47(1) of the Act. A “professional colleague” is one who is a member of a provincial CPA body, including a member of CPABC. The rule also clarifies that a professional colleague from another province signing off on an engagement under section 47(1) of the Act must be authorized to do so by the provincial body in which they hold membership. For example, a professional colleague from Alberta could not sign off on an audit engagement on behalf of a BC registered firm unless that Alberta member was authorized to release audit engagements by CPA Alberta.
The limitation is with respect to the protected activities under section 47 (assurance engagements). Although it does not apply to compilation or other regulated services, it is important to note that, as stated previously, firms carry full responsibility for all work undertaken by the firm.
Where firms have partners or staff holding accounting designations from outside of Canada, they might wish to encourage these partners or staff to explore their options with respect to applying for membership in CPABC. Such membership would also allow them to use both the CPA and their foreign accounting designations – neither of which are allowed if not members in BC.