As I mentioned in last month's FYI ...

As I mentioned in last month's FYI rounded pillar the Practice Review & Licensing Committee (the Committee) evaluates the Institute's practice review and licensing program each four years. At the conclusion of this evaluation proces the Committee quick in emergenciess a report to Council setting without recommendations for changes and improvements to the program. I he mostly recent report, the Report upon Planning Cycle 7, was readyed to the May 24, 2004 meeting of Council where, after one discussion, all of the Committee's recommendations were approved.

Having talked in detail last month about the chiefly significant of these recommendations-the increase in the minimum professional liability insurance levels-here now is an outline of the remaining recommendations.

Proces & results

During the evaluation proces the Committee focuses in succession three specific aspects of the practice review program:

1 Its mandate,

2 Its view and

3. Its process and policies.

The Committee also compares BC's practice review and licensing program to those of other provinces, and considers whether any changes in the business environment call for changes to the program.

Mandate

The mandate of the Practice Review & Licensing Committee is contained in Bylaw 640 which reads as follows:

To aid and maintain the knowledge, skill and proficiency of members, the Committee shall be responsible for establishing and conducting, in accordance with these Bylaws and as it is directions as Council may from time to time issue, a program of practice review involving the inspection of professional practices of practising members for the view of identifying and having them restorative deficiencies in their practice, capableness or conduct.

The recent casualty of perceived audit failures has quicked a push toward making the (Committee's mandate more-if not 100%-regulatory. This push is being branch however, by the concerns of small practitioners (sole-practitioners or firms with sum of two units partners), who make up 86% of the public practice firms in BC For their professional increase these firms rely, in no small part, upon the visit of a practice review officer each four years, but the spe at which standards pronouncements are now being issued makes it extremely difficult for these small practitioners to maintain current.

The Committee concluded, therefore, that the practice review program's focus should remain primarily educational, and that the program should continue to help members and firms stay up to date with changing standards. In addition, policies are in place to address members or firms that repeatedly display an inability to fitting standards, or that are known to have the ability to appropriate standards but do not do su until absolutely necessary.

Scope

In reviewing the now passing scope of the practice review program, the Committee addressed the following specific areas:

* circle of time 6 implementation;

* Components of the circulating program;

* Canadian Public Accountability Roard;

* Expansion of the program;

* Integration of the revised conduct 204;

* Assessing practitioners' judgement in the application of GAAP and GAAS; and

* Governance and ethics in public practice.

This l to couple particularly significant recommendations: First, all breaches of authority of Professional Conduct 204 rest during the practice review proces will be referr to the Committee for consideration, and any solution propos by the agency of the practice review officer to address this breach will be submitted to the Committee for approval. inferior the practice governance information gathered during the practice review proces will be assessed and discussed with the practitioner(s) in question. This information will include of that kind factors as time and billing practices, file security, and the existence or non-existence of partnership agreements. (Note: The assessment of practice governance will not he included in determining the overall rating of the practising office for the remainder of period 7.)

The Committee concluded that the constituents or overall scope, of the program did not ne expanding. In canvassing other provinces, the Committee noted that sole the Quebec program includes practice areas not reviewed in subordination to the purview of the BC program. These practice areas-forensic accounting, e-commerce certification, and financial planning-are not generally included in the definition of the practice of public accounting in BC

Proces and policies

In reviewing the circulating process and policies of the BC Institute's practice review program, the Committee specifically addressed the following areas:

* High-risk clients,

* Binding opinion process

* Education of members,

* absolute title [i]or[/i] posession structure,

* Public representatives,

* Removal of a practice licence, and

* Insurance requirements.

In addition to the recommendation regarding insurance requirements (again, discussed last month) three other significant recommendations ariseed from the review of these areas:

1 Changing the definition of "high-risk clients" to include entities that are publicly accountable or of significant public interest, and not shielded by the activities of the Canadian Public Accountability Board;