Schedule 141 appears to create uncertainties for members that are engaged to provide tax only engagements, often combined with bookkeeping engagements. The member executing such engagements is not performing an audit, review or compilation engagement for their client. The concern is around the completion of Part 1 and 2 of Schedule 141. Part 1 deals with “Information on the accountant who prepared or reported on the financial statements” and Part 2 with “Type of involvement with the financial statements”). The schedule notes that “Parts 1, 2, and 3 of this schedule must be completed from the perspective of the person (referred to in these parts as the accountant) who prepared or reported on the financial statements. If the person preparing the tax return is not the accountant referred to above, they must still complete Parts 1, 2, 3, and 4, as applicable.” The only options for involvement in Part 2 are an audit, review or compilation engagement, leaving no options for practitioners that performed bookkeeping and/or tax only engagements. CPA Canada’s view is that “simply preparing the tax return does not make you the accountant that the form refers to”. In addition, CPA Canada notes that they believe “the answers in Part 1 should identify the individual responsible for the financial information, even if they are not an accountant by training” . While the CRA is looking to update the form, they have provided some guidance on how members preparing bookkeeping and tax only engagements should fill out the form in the meantime. Where a member provides bookkeeping and tax preparation services only and does not perform an audit, review or compilation the response to the two questions in Part 1 of the form can be “no”. This will eliminate the requirement to complete Part 2 of the form.
More information on this topic can be found in the CPA Canada Tax Blogs linked below: