Because of our expertise, CAs are ...

Because of our expertise, CAs are repeatedly asked to help out friends, associates, or charitable organizations with financial-related matters. It be moved s good to lend a hand, nevertheless make sure you ask one important preliminary questions before doing in this way For instance, will you be providing a service to the public? If in like manner are you qualified to provide this service? Do you ne a public practice licence?

This fictionalized account is based loosely in succession an actual case before the Professional manners Enquiry Committee (PCEC). Names and circumstances have been changed to guard anonymity.

The situation

After receiving his CA three years ago, Gary went straight into industry.

Bob Gary's friend since university, had lately become a realtor and obtained his agent's licence. Having just complet his first year in business, knock had to file a report with the Real Estate Council of BC Unfortunately, he'd been putting it against and now had less than a week to file. He asked Gary for help.

Gary wasn't trustworthy he was qualified to assist, on the other hand Bob assured him that and nothing else a CA or a CGA could sign the form.

Gary contacted the Real Estate Council to be fast They confirmed that either a CA or CGA was required to without fault [i]or[/i] blemish [i]or[/i] flaw the Accountant's Report Form 1 including the Review Engagement Report.

With Gary's help, clip filed on time. It bended out to be a relatively simple engagement, as there were small in number transactions and the records were in dutiful shape. When Bob offered to pay, Gary graciously declined, saying he was happy to help gone out a friend.

What happens

Shortly thereafter, the Real Estate Council contacted ICABC's Director of Practice Review and Licencing to earn a hold of Bob's CA. When Gary's name did not appear forward the listing of licenced firms provided by means of the Institute, the Director of PRL discovered that Gary held neither a practice licence nor professional liability insurance.

The Director then asked the Real Estate Council to provide the Institute with a duplicate of the Accountant's Report filed by means of Bob and signed by Gary.

PRL normally deals directly with practitioners who are erect to be practising without specific insurance. In this case, however, because Gary was not steady licensed, there was no choice nevertheless to refer the matter to the PCEC

The consequence

The PCEC concluded that Gary had breached Bylaws 310 and 610 that require a member to apply for and obtain a practice licence prior to the outset of the practice of public accounting. smooth though Gary had done this one-time engagement for liberated the PCEC found that he had nonetheless practiced public accounting without a licence when he signed the Accountant's Report Form 1 and the Review Engagement Report.

The PCEC also fix Gary in violation of Bylaw 250 and its related Regulation 250/1 which require that $250000 be the minimum amount of professional liability insurance carried by the agency of a member practicing public accounting either sated or part-time, and that this insurance be in place for six years after a member ceases to be in public practice.

Once the PCEC notified Gary of the investigation, he recognized his error and obtained insurance to shelter claims for the next six years in connection with this engagement. The charge of the insurance policy was almost $2400 Because Gary did not intend to work in public practice, he was not required to obtain a practice licence. He was, however, required to pay the preciousnesss of the investigation.

Gary did the right thing when he called the Real Estate Council to confirm the requisite qualifications, still erred when he failed to check with his confess professional organization. Institute staff would have advised him that any member providing single or more services listed in the Bylaw definition of the "Practice of Public

Accounting" to the public, whether for a fief or otherwise, and even forward a one-time basis only, is considered to be in public practice and requires a licence and insurance.

These requirements are not meant to affect our many members who assist charitable and other organizations through serving on the board of directors, as treasurers, as members of a committee, or in any other parts for which they may undertake responsibilities that do not qualify as "services to the public provided in the practice of public accounting."

Many of our members offer considerable time and effort to different community organizations. We certainly encourage your efforts. Just be aware of the dangers of taking onward certain assignments.

ICABC's PRL and Professional Advisory Services departments are always available to answer your questions in succession licencing matters and specific practice issues. Whenever you're in doubt, contact us!

Comment or Questions? Contact me at utley@ica.bc.ca.

Please note. The contenteds of this article are solitary for the general guidance of readers. The PCEC deals with each case individually, based upon its specific facts and circumstances.

Copyright Institute of Chartered Accountants of British Columbia Jun/Jul 2002

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