By-Law Four/Code
of Ethical Principles and Rules of Conduct
Independence
Standard
A professional
organization and its members are granted the legal right by society to organize
itself, to control entrance into the profession and to formulate standards of
behaviour governing its members. In return for this right, CGA Ontario’s members
of the profession are to act in the interest of society and its members.
Provincial and federal Acts and
Code of Ethical Principles and Rules of
Conduct formalize this arrangement. In order to fulfil this responsibility,
professionals must have a number of important character traits, as well as the
skill to make expert technical and moral judgments that serve the interests of
society. In addition, the Public Accountants Council for the Province of Ontario
has developed standards pertaining to the rules of professional conduct that a
designated body must meet in order to be authorized to license and govern the
activities of its members as public accountants: the
Code of Ethical
Principles and Rules of Conduct are written to ensure that those standards
have been met.
Certified general accountants thus have an important role to play in society. In
the performance of that role, many of a professional’s actions have an effect on
the welfare of other people. Because of their societal responsibilities, members
of a profession are obligated to act in the interest of these other parties who
have a stake in the nature and quality of professional activities. These
stakeholders include employers, clients, various identifiable third parties and
the public at large. Therefore, the professional organization and its members
have a stake in the performance of individual members. The
Code of Ethical
Principles and Rules of Conduct applies to the behaviour of members of the
Association when they either perform the role of a professional accountant or
represent themselves as members of the Association.
The role of a CGA is broad and general. It is defined in two ways: first, by
specifying the tasks that accountants characteristically perform and second by
specifying the parties who are to benefit from the performance of those tasks
and how professional accountants should act in order to benefit them.
The characteristic tasks performed by certified general accountants include the
production, analysis, and distribution of information. In addition, the
provision of ancillary services are related to the core expertise in accounting.
The
Code of Ethical Principles and Rules of Conduct governs a CGA’s
actions in the performance of these tasks.
Certified general accountants are committed to providing professional services
competently and with due care. This requires extensive knowledge and experience,
and the ability to make appropriate judgments. Competence and due care imply the
necessity and ability to make ethical judgments. In addition, CGAs are committed
to improving the quality of professional services and the profession itself.
Certified general accountants are committed to the public interest. Normally,
acting in the public interest is achieved by acting in the interest of one’s
client or employer. However, whenever there is a conflict between these
interests, the professional’s first obligation is to the public at large. Acting
appropriately in such situations may require the courage of one’s convictions.
In virtue of their commitment to the public interest, certified general
accountants owe an obligation to other parties. In order to satisfy that
obligation, two elements of character are crucial to members of the CGA
profession. They must act with integrity and be trustworthy. Acting with
integrity means that they are committed to a high standard of behaviour and
strive to achieve it in their work. It implies the highest standard of
behaviour, and thus exceeds the minimum allowable under laws, regulations or
specific professional pronouncements. Trustworthiness means that others may
safely put themselves in a position in which a CGA is expected to help them.
Integrity and trustworthiness imply the possession of other character traits,
including honesty, prudence, competence, loyalty to the proper beneficiaries of
their actions and objectivity. Objectivity in turn requires that certified
general accountants should be truthful and impartial, and should act fairly with
regard to the interests of themselves and others.
Certified general accountants also are committed to avoiding conflicts of
interest. When a situation arises in which a conflict either cannot be avoided,
or it is undesirable to avoid from the beneficiaries’ point of view, disclosure
of the conflict (and consent of the beneficiaries) is necessary. Furthermore,
CGAs are committed to protecting the confidentiality of information about their
client or employer, which they obtain or produce in the course of performing
their role. This protection, however, is not absolute.
Certified general accountants are committed to acting in accordance with all
applicable laws and professional standards. In situations where violation of
some standard occurs, the burden of proof is on the CGA to show why such an
action is justifiable.
The standards of conduct contained in the
Code of Ethical Principles and
Rules of Conduct provide standards of acceptable behaviour of Association
members. They apply to all members of the Association, and extend to students
(except where the wording of any rule makes it clear that it specifically
relates to members only). These standards take the form of ethical principles
and rules. Some of the basic principles apply to all CGAs; others relate
specifically to the role that members play when they provide professional
services. These principles provide a positive guide to members of the
Association in their professional activities to help them make judgments on how
they should act. They also provide a basis for enforcing a minimum level of
acceptable behaviour.
Furthermore, CGA Canada’s
Code of Ethical Principles and Rules of Conduct
applies when members perform services outside their own province or territory or
even outside Canada. Members should be aware that other jurisdictions may impose
more restrictive standards on services performed in those jurisdictions. Where
these can be determined, it is recommended those standards be observed.
The most important part of this document is the
Code of Ethical Principles.
The principles provide the ethical standards in accordance with which
accountants are to make their professional judgments. The
Rules of Conduct
provide clear statements of required or prohibited behaviour in specific
situations. They are appropriate in areas in which the standard of acceptable
behaviour is either vague or sufficiently important to formulate a written
standard.
This
Code of Ethical Principles and Rules of Conduct is structured so
that the ethical principles are relatively general and subject only rarely to
revision. As the profession and its environment change, it is anticipated that
the rules of conduct will be amended occasionally, as warranted by addition,
modification and deletion.
CGA Ontario adopted CGA Canada's
Code of Ethical Principles and Rules of
Conduct at the June 1997 meeting of its board of governors.
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Members have a fundamental responsibility to safeguard and advance the interests
of society. This implies acting with trustworthiness, integrity and objectivity.
This responsibility extends beyond a member’s own behaviour to the behaviours of
colleagues and to the standards of the Association and the profession.
Members shall act
in the interests of their clients, employers, and interested third parties, and
shall be prepared to sacrifice their self-interest to do so. Members shall
honour the trust bestowed on them by others, and shall not use their privileged
position without their principal’s knowledge and consent.. Members shall strive
to be independent of mind and in appearance.
Members shall
strive to continually upgrade and develop their technical knowledge and skills
in the areas in which they practise as professionals. This technical expertise
shall be employed with due professional care and judgment.
Members shall not
be associated with any information that the member knows, or ought to know, to
be false or misleading, whether by statement or omission.
Members shall act
openly and fairly towards others in the practice of their profession.
Members shall
always act in accordance with the duties and responsibilities associated with
being members of the profession, and shall carry on work in a manner that will
enhance the image of the profession and the Association.
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The Rules of
Conduct provide specific statements of the minimum standards of acceptable
professional behaviour. They provide clearer statements about specific ethical
issues, but do not exhaust the range of enforceable ethical standards. They are
organized under the headings of the Ethical Principles to which they apply. The
Rules of Conduct also provide guidance concerning the application of the rules
to certain specific situations. The Rules of Conduct apply to all members and
firms, whether or not the member or the firm is licensed or authorized to
practise public accounting, and to students.
Members have a
fundamental responsibility to safeguard and advance the interests of society.
This implies acting with trust-worthiness, integrity and objectivity. This
responsibility extends beyond a member’s own behaviour to the behaviour of
colleagues and to the standards of the Association and the profession.
A member shall
not permit the member’s firm name or the member’s name to be used with,
participate in, or knowingly provide services to, any practice, pronouncement or
act that would be of a nature to discredit the profession.
A member shall
not permit the member’s firm name or the member’s name to be used with,
participate in, or provide services to, any activity that the member knows, or
which a reasonably prudent person would believe, to be unlawful.
A member shall not engage in a discriminatory practice on a prohibited
ground of discrimination, as those terms are defined in theOntario Human
Rights Code.
A member shall,
subject to Rule 105 and Rule 201, notify the Association of any breach of the
Code of Ethical Principles and Rules of Conduct by another member, or any
other situation of which the member has sufficient knowledge, which appears to
put in doubt the competence, reputation or integrity of members.
A member or other
person appointed by the Association as a member advisor, or to a similar
position, shall be exempt and prohibited from reporting under these rules, any
matter of which the appointee becomes aware in the course of the duties
incumbent in such a position, unless the matter discloses a likely risk of
serious harm or loss to a client, an employer, or the Association, or involves a breach of a statute.
A member shall, when appointed by the Association to the
professional standards and competence committee or one of its sub-committees or
engaged by the committee or one of its sub-committees to conduct a practice
inspection, be exempt and be prohibited from reporting under these rules any
matter of which the member becomes aware in the course of the
Association-related duties except when:
(a) the matter discloses a likely risk of serious harm or loss to a client, an employer,
or the Association, or involves a breach of a statute; or
(b) the
professional standards and competence committee or one of its sub-committees
files a complaint relating to a breach of these rules or a breach of a statute,
based on the results of a practice inspection;
(c) the practice
inspection was made on request of the discipline committee, the professional
standards and competence committee or one of its sub-committees, the
professional conduct tribunal or the competency tribunal; or
(d) the member or
the firm has failed to cooperate with the practice inspector,
or to abide by the practice inspection process.
A member shall be exempt and prohibited from reporting under
Rule 104, where the disclosure of such matters is otherwise prohibited by law.
R105
Professional Courtesy
A member shall
act, in relation to any member, firm or professional colleague with the courtesy
and consideration due between professional colleagues and shall not criticize
another professional colleague without first submitting this criticism to that
colleague for explanation. Where the criticism may result in a complaint against
the colleague being lodged with the discipline committee, the member must, where
required, first submit that criticism in writing to the colleague for
explanation. The member, thereafter, shall inform that colleague as to the
action the member has taken concerning the criticisms. The lodging of an ethics
complaint against a professional colleague is considered a criticism under this
rule.
Notwithstanding Rule R105, a member may first submit a
criticism of another professional colleague to the relevant Association, should
the matter be considered of such a nature that prior written notice to that
colleague is not appropriate.
A member shall
report to the Association any situation of which the member has sufficient
personal knowledge and which the member thinks may be detrimental to the
profession.
A member may
engage in any profession, trade, industry, office or duty, except where these
undertakings are detrimental to the public good or to the standards of the
profession.
A member engaged in a professional practice or in the
practice of public accounting may carry on a business or practice through an
organization separate from such professional practice or public accounting
practice, either as a proprietor or partner, or as a director, officer or
shareholder of a corporation, and may associate with non-members for this
purpose, subject to the following provisions:
a. the business
or practice shall not be designated "Certified General Accountant(s)"; and
b. no reference
to any such business or practice may be made in the letterheads, name plates,
professional cards or announcements of the professional practice or the public
accounting practice, nor may reference be made to the professional practice or
the public accounting practice in the letterheads, name plates, professional
cards or announcements of any such business or practice.
A member engaged in
a practice other than a professional practice or a public accounting practice
may, in carrying on such a practice, conduct these affairs (or the firm’s or
corporation’s affairs) free of the constraints imposed upon members engaged in a
professional practice or the practice of public accounting, but not in such a
fashion as to bring disrepute on the profession or the Association.
A member practising as described in Rule R107.2 shall not
refer a client for services to another member or firm engaged in a professional
practice or the practice of public accounting for a commission or other
compensation.
A firm carrying on a business or practice as described in
Rule R107.1 may use normal business methods to solicit business for its own
functions, but such methods may not be used or appear to be used, for the
solicitation of clients for the professional practice or the public practice
with which the member is associated.
It shall be
unethical for a member, while acting in a professional capacity or otherwise, to
engage in misconduct of a reprehensible or serious nature which reflects on the
member’s or student’s honesty, integrity, or trustworthiness or, is relevant to
the person’s suitability as a member of the profession.
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Members shall
act in the interest of their clients, employers, and interested third parties,
and shall be prepared to sacrifice their self-interest to do so. Members shall
honour the trust bestowed on them by others, and shall not use their privileged
position without their principal’s knowledge and consent. Members shall strive
to be independent of mind and in appearance.
A member shall
not disclose or use any confidential information acquired as a result of
professional or business relationships without proper and specific authority or
except as described in Rules R201.1 and R201.2.
A member shall disclose the information:
a.
where
disclosure is compelled by a process of law or by statute; or
b.
where
such information is required to be disclosed by the board of governors of the
Association or any of its committees appointed thereby in the proper exercise of
its duties.
A member is not forbidden from disclosing the information:
a.
where
properly acting in the course of the duties incumbent on a member; or
b.
where
a member becomes aware of an apparent or suspected criminal activity. Before
making such a disclosure, a member should obtain advice from a member of a
provincial or territorial law society as to the member’s duties and obligations
as a citizen in the context of the member’s professional activities. A member so
doing shall not be in violation of this rule regarding confidentiality, by
reason only of the seeking or following of such legal advice or reporting.
A member engaged to
perform a particular service may contract for the services of a person not
employed by the member to assist in the performance of that service, provided
the member first obtains agreement from that person to carefully and faithfully
preserve the confidentiality of any information used for the purposes of the
engagement and not to make use of such information other than as required in the
performance of such services.
Independence
requires:
(a) Independence of Mind
The state of
mind that permits the provision of an opinion without being affected by
influences that compromise professional judgment, allowing an individual to act
with integrity, and exercise objectivity and professional skepticism; and
(b) Independence in Appearance
The avoidance of
facts and circumstances that are so significant that a reasonable and informed
third party, having knowledge of all relevant information, including safeguards
applied, would reasonably conclude a member, firm, or a member of the assurance
team’s, integrity, objectivity or professional skepticism had been compromised.
In accordance with the CGA Independence Standard, a member shall
be free of any interest, influence or relationship in respect of the client’s affairs
which impairs the member’s professional judgment or objectivity, or which, in the
view of a reasonable observer, may have that effect.
A member shall comply with the requirements set out in the
CGA Independence Standard:
(a) Communication
A member shall not issue a communication in an assurance
engagement or specified auditing procedures engagement unless the member has
identified any threats to independence and evaluated the significance of those
threats. If the threats are other than insignificant, the member shall either
eliminate those threats,apply safeguards to reduce those threats to an
acceptable level, or decline to accept or continue the engagement.
(b) Prohibitions
A member shall comply with the prohibitions set out in the
CGA Independence Standard. Prohibitions are denoted within the Standard by
italics.
Prohibitions are
not limited to those specifically identified in the Standard, but must be
determined by the member’s application of professional judgment in assessing the
situation in accordance with the framework contained in the Standard.
(c) Compliance of
the Firm
A member shall ensure that staff of the firm remain free of
any interest, influence or relationship that would preclude the firm from
performing the engagement pursuant to subsections (a) and (b) of this Rule and
Rule R202.2.
(d) Documentation
A member shall document all threats to independence and
either the decision to continue the engagement with the appropriate safeguards
or the decision to decline the engagement.
(e) Requirement
to Disclose Prohibited Interest, Influence and Relationships
A member who has an interest, influence or relationship that
is precluded by this Rule shall advise the firm in writing of the interest,
influence and relationship.
A member who provides any services in relation to insolvency
shall be free of any interest, influence or relationship in respect of the
client’s affairs which impairs the member’s professional judgment or
objectivity, or which, in the view of a reasonable observer, may have that
effect.
R202.3
Independence in Other Professional Services
(a) Requirement
to Disclose Interest, Influence and Relationships
A member who provides any services not subject to R202.1 and R202.2 and the CGA
Independence Standard shall disclose in writing to the client or employer any
interest, influence or relationship in respect of the client’s or employer’s
affairs which impairs the member’s professional judgment or objectivity, or
which, in the view of a reasonable observer, may have that effect.
(b) Parties to
the Same Transaction
Pursuant to Rule
R202.3(a) a member shall, when rendering advice to two or more clients who are
parties to the same transaction advise in writing that confidential information
obtained may be disclosed to other parties to the transaction. In addition, each
party to the transaction must provide written consent to the member
acknowledging these terms.
R202.4
Compilation Engagements
A member may issue a compilation engagement report as long as
appropriate disclosure of any interest, influence or relationship between the
member and the client is made in the compilation engagement report.
R203
Information Used for Personal Advantage
A member shall
not, without an employer’s or client’s consent, use confidential information
relating to the business of the member’s employer or client to directly or
indirectly obtain a personal advantage. Members shall not take any action, such
as acquiring any interest, property or benefit, in connection with which
unauthorized use is made of confidential knowledge of an employer’s or client’s
affairs obtained in the course of his or her duties.
R204
Trusteeship
Members who
handle money or other property in trust shall do so in accordance with the terms
of the trust and the general law relating to trusts; the member shall maintain
such records as are necessary to account properly for the money or other
property.
R204.1
Money Held in Trust
All money held in trust shall be kept in a separate trust
account or accounts in any bank, credit union or trust company, subject to the
terms under which the money is held.
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Members shall
strive to continually upgrade and develop their technical knowledge and skills
in the areas in which they practise as professionals. This technical expertise
shall be employed with due professional care and judgment.
R301
Competence
A member shall
sustain professional competence by keeping informed of, and complying with,
developments in the acknowledged standards of the profession in all areas in
which the member practises or is relied upon because of the member’s profession.
R302
Professional Development
A member shall
undertake continuing education and professional development activities in
accordance with the standards and policies established by the Association.
R303
Adherence to Acknowledged Principles and Standards
Members shall
adhere to acknowledged principles and standards of professional practice. In
addition, all licensees shall be required to establish, maintain and uphold
policies and procedures to ensure that all public accounting services are
performed in accordance with generally accepted standards of practice of public
accounting. The phrase ‘acknowledged principles and standards’ expresses a wide
meaning; namely, that body of principles and practices that have been generally
adopted by the profession and that are applied in the preparation of financial
statements and any tax related matter, taken together with the requirements of
any governing statutes, subject to (f) below. That is, a member shall adhere to:
(a)
generally accepted accounting principles in financial
reporting unless departure from these principles is fully disclosed;
(b)
generally accepted auditing standards;
(c)
accounting and auditing practices and standards recommended
by the Association, including those found in:
(i) the
CGA program of professional studies;
(ii) seminars offered by the Association;
(iii) the CGA Canada Public Practice Manual;
(iv) the CGA Independence Standard;
(v) the CICA Handbook-Accounting; and
(vi) the CICA Handbook-Assurance.
(d)
accounting and auditing practices that differ from those
recommended by the Association, provided that there is substantial authoritative
support for the alternative treatment and the departure from the Association’s
recommendations is disclosed;
(e)
accounting and auditing practices not specifically dealt with
by the Association, but which are otherwise generally accepted; and
(f)
requirements of any governing act or regulation, or those
pertaining to a securities regulator such as the Ontario Securities Commission
and the Securities and Exchange Commission, providing; however, in the event
that there is a conflict between the accounting and auditing standards of the
profession and a specific statutory or regulatory requirement, the member shall
make appropriate qualification in the report.
R304
Terms
of Engagement
A member clearly
shall state in writing to a client the nature and scope of services to be
rendered under the terms of the engagement.
A member shall
not permit the firm name or the member’s name to be used with any communication
or recommendation concerning financial information, unless the member has
considered all of the information required to support such communication and/or
recommendation.
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Members shall
not be associated with any information that the member knows, or ought to know,
to be false or misleading, whether by statement or omission.
R401
Communication Issued in Connection with Financial Information
A member shall
not issue a communication on any financial information, whether for publication
or not, when the information is prepared in a manner that may have a tendency to
be misleading.
A member shall
not be associated with any letter, report, statement, representation, financial
statement or tax filing, whether written or oral, which the member knows, or
should know, is false or misleading, regardless of any disclaimer of
responsibility.
R402.1
Employer/Employee Conflicts
It is recognized that under exceptional circumstances,
compliance with Rule R402 may place a member in a difficult position vis-à-vis
the member’s employer. Nevertheless, professional duty is forsaken if the member
fails to comply with Rule R402.
R403
Known Omission
A member shall
disclose any fact or information known to the member that is not disclosed in
the financial information, the omission of which would make that information
misleading.
R404
Material Discrepancy
A member shall
immediately disclose any material discrepancy that becomes known to the member
concerning financial information on which the member has issued a communication,
or with which the member is associated.
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Members shall
act openly and fairly towards others in the practice of their profession. A firm
shall be founded and conducted upon a reputation for professional excellence.
A member shall
not engage in bidding practices for professional services that use unfair
methods of competition.
R502
Impairment of
Incumbent Accountant
A member shall
not, when accepting a special assignment (whether by referral or otherwise) from
a client of an accountant who is continuing in the relationship with that
client, take any action that would tend to impair the position of the other
accountant in the on-going work with that client.
R503
Services Provided on Referral
A member shall
not, when receiving a special assignment for services by referral from another
accountant, provide or offer to provide any different services to the referring
accountant’s client without the consent of the referring accountant. The
referring accountant shall not unreasonably withhold such consent.
R504
Replacement
A member engaged in a professional practice or the practice of public
accounting shall, before accepting an appointment to replace another
professional accountant or firm, inquire from such other person or firm in
writing whether there is any professional reason why such an appointment should
not be accepted.
A member engaged
in a professional practice or the practice of public accounting shall respond
promptly to takeover letters received from other professional accountants. The
member shall supply reasonable information to the successor accountant about the
work being assumed. There must be readiness to co-operate with the successor,
recognizing that the client’s interests are paramount. A member shall transfer
to the client or, on the client’s instructions, to the newly appointed
accountant, all books and documents belonging to the client that are in the
member’s possession.
R506 Rule Deleted
A member engaged
in a professional practice or the practice of public accounting shall not,
directly or indirectly, accept a commission as a fee for work turned over to
another person. This does not pertain to the sale of an accounting practice or
part thereof.
R508
Contingent Fee
A member shall
not undertake an audit, review, compilation or tax return engagement for a fee
that is contingent on the results of such services.
R509
Advertising and
Other Forms of Solicitation
A member shall
not seek to obtain clients by advertising or other form of solicitation, which:
(a)
is false or deceptive;
(b)
includes the use of harassing conduct;
(c)
creates an unjustified expectation of favourable results; and
(d)
contains self-laudatory statements that are not verifiable.
A member shall not engage in a professional practice or the
practice of public accounting or in the practice of any function consistent
therewith, under a name or style that is misleading as to the nature of the
organization (proprietorship, partnership or, where permitted, corporation) or
the nature of the functions performed.
A member shall be permitted to refer to preferred or
restricted area(s) of practice in advertising, on business cards or on
letterhead; however, such preferred or restricted area(s) of practice shall not
be referred to as a specialty, unless the requirements of the Association have
been met.
R509.3 Fees
a) A member or firm shall ensure that a fee quoted and/or charged to a client for
the performance of professional services is sufficient in that:
-
Independence
, where required, will not be impaired; for additional guidance refer to CGA Canada’s
Independence Standard.
- Qualified members of the firm will be assigned to the engagement and will devote
the appropriate time to it; and
- The quality of work will not be impaired and that due care will be applied to comply
with all applicable professional standards, guidelines and quality control procedures
in the performance of those services
b) Nothing in this sub-rule is intended to discourage members from providing
pro bono professional services, where appropriate.
R510
Name of
Firm
All members
engaged in a professional practice or the practice of public accounting and
pursuant to Rule R510.1 shall practise under the member’s name(s). A member
shall, if engaged in a professional practice or the practice of public
accounting in partnership, practise under at least one of the partners’ names.
Partners’ names are of those who are or have been associated with the firm.
Where the firm consists of more than one partner, the firm name may consist of
any combination of partners, former partners or predecessors, voting
shareholders or former voting shareholders. The firm name may also be in the
form of the initials drawn from the first letter of the partners’ last names.
All members so
engaged must ensure the firm name clearly identifies the style of practice and
complies with Rule R509.1 as follows:
(a)
If practising as a professional corporation make it clearly
understood to the public that the member is practising as a professional
corporation and ensure that the firm name consists of a name that is allowed
under this rule and the appropriate legislation.
(b)
If practising as a corporation, where the firm consists of
one or more practitioners, make it clearly understood to the public that the
firm is incorporated and ensure that the firm name consists of a name that is
allowed under this rule and the appropriate legislation.
(c)
If practising as a limited liability partnership, make it
clearly understood to the public that the firm is a limited liability
partnership and ensure that the firm name consists of a name that is allowed
under this rule and the appropriate legislation.
(d)
The addition of “& Co. ” or other similar term is permitted
only where the member employs staff or where the number of partners exceeds that
named in the firm name.
(e)
If a member is practising with one or more professional
colleagues who are not partners or employees, reference to the associate(s) by
the addition of “& Associate(s)” to the firm name is permitted.
(f)
If a member is practising in partnership with a professional
colleague who is a non-member, make it clearly understood to the public that the
firm is a partnership and ensure that the firm name consists of a name that is
allowed under this rule and a descriptive style permitted under Rule 510.1.
Members engaged in
a professional practice or the practice of public accounting shall practice
under the descriptive style “Certified General Accountant(s)”, unless the
descriptive style forms part of the firm name.
(a)
The plural use of the descriptive style Certified General
Accountants shall only be used in a partnership of members or a corporation of
members or professional corporation of members.
(b)
Notwithstanding R510.1 (a), if a member is engaged in the
practice of public accounting with a professional colleague who is a non-member,
the firm shall not use the descriptive style “Certified General Accountants(s)”
if:
i) the
non-member’s name forms a part of the firm name; or
ii) the partners who are members exercise less than 50% legal control of the
firm.
On the withdrawal,
retirement or expulsion of an active partner from a firm, or the death of an
active partner, the member(s) shall be granted a period of one year from that
time within which to comply with the requirements of Rule R510.
A firm engaged in a
professional practice or the practice of public accounting as of September 30,
1996, and whose name at that date included the phrase "& Co" or other similar
wording as permitted by the rules then in effect, may continue to use such name
for as long as the firm is engaged in a professional practice or the practice of
public accounting under that name.
A member whose name
is legally changed may continue to use the former name in the name of firm
without being considered in breach of this rule.
(a) Sole Member Professional Corporation
(i) A member shall, if practising the profession of accounting as a
professional corporation, ensure that the firm name consists of the member's own
name or the name of a predecessor who had practised as a Certified General
Accountant, with or without the addition of "& Co." or a similar term after the
name. In addition, the professional corporation shall practice under the
descriptive style "Certified General Accountant".
(ii) A member shall, if practising as a professional corporation, make it
clearly understood to the public that the member is practising as a professional
corporation.
(iii) A member shall, if practising as a professional corporation, ensure that
the corporate name consists of a name allowed for the member's firm name under
subsection (a)(i) of the rule and the Business Corporations Act.
(b) Multiple Member Professional Corporation
(i) A member shall, if practising the profession as Certified General
Accountants in a multiple member professional corporation, ensure that the firm
name consists of one or more names of the voting shareholders, former voting
shareholders or predecessors who had practised as Certified General Accountants,
or an acronym drawn from the first letter of these surnames, with or without the
addition of "& Co.". In addition, the firm shall practise under the descriptive
style "Certified General Accountants".
(ii) A member shall, if practising in a multiple member professional
corporation clearly make it understood to the public that the firm is
incorporated.
(iii) A member shall, when practising in a multiple member professional
corporation, ensure that the corporate name consists of a name allowed in
subsection (b)(i) of this rule, Article 14 of By-Law Four and the Business
Corporations Act.
(a)
A
member engaged in a professional practice or the practice of public accounting
personally shall undertake or delegate to a certificated member of the
Association or a professional colleague, the management of each office
maintained by the member or the member’s firm. Such member(s) or professional
colleague(s) shall normally be in attendance at such office(s).
(b)
A
member or licensee engaged in a professional practice or the practice of public
accounting who is associated with non-members, or non-licensees, as applicable,
in such practice, shall be responsible to the Association for any failure of
such associates to abide by the Code of Ethical Principles and Rules of Conduct.
A member shall not
associate in a professional practice with a professional colleague who is a
non-member and a licensee shall not associate in a public accounting practice
with a professional colleague who is a non-licensee unless:
(a) such business
or practice maintains the good reputation of the profession and its ability to
serve the public interest and adheres to the Code of Ethical Principles and
Rules of Conduct;
(b) such business
or practice establishes and maintains policies, procedures and arrangements
suitable for ensuring:
(i) that
every such non-member professional colleague is knowledgeable of and complies
with:
1) the Act, regulation, By-Law Four and
Code of Ethical Principles and Rules of Conduct; and
2) the
ethical and other regulations applicable to members of a recognized professional
organization or regulated body of which the non-member professional colleague is
a member; and
(ii) that
no style or presentation or communication is used which implies that the
non-member professional colleague is a member.
(c) such business
or practice fully recognizes that the member who is associated with a non-member
or licensee associated with a non-licensee, shall be responsible to the
Association for any failure of the non-member, or non-licensee as applicable, to
abide by the Code of Ethical Principles and Rules of Conduct
R513
Marketing of Goods and Services
A member engaged
in a professional practice or the public practice of public accounting shall not
market goods and services at a profit, other than professional services, through
the member’s professional practice or public accounting firm.
R514
Registration
A member shall,
if engaged in a professional practice or the practice of public accounting
part-time or full-time, register in accordance with the requirements prescribed
by the Association. This rule also shall apply to members who own, operate or
control a professional corporation engaged in a professional practice or the
practice of public accounting.
R515
Practice Inspection Requirements
A member shall
comply with, and adhere to, the practice inspection requirements of the
Association and the standards contained therein.
R516
Professional Liability Insurance
A member engaged
in a professional practice or the practice of public accounting shall maintain
professional liability insurance as specified, and provide evidence as required,
by the Association.
A member shall
not permit an employee to perform professional services that the member is not
permitted to render, unless the employee has been granted a license to perform
such professional services.
R518
Relations with Clients or Employers
A member shall
not, when acting on behalf of a client or employer, bargain for the member’s own
use any fee, remuneration or benefit from a third party without the client’s or
employer’s written consent.
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Members shall always act in accordance with the duties and
responsibilities associated with being members of the profession and shall carry
on work in a manner that will enhance the image of the profession and the
Association.
R601
Compliance
A member shall
comply with By-Law Four and the Code of Ethical Principles and Rules of
Conduct of the Association as amended from time to time, and with any order
or resolution of the board of governors or its committees under the By-Law.
A member shall
be subject to disciplinary action for any offence that constitutes a breach of
professional conduct.
A member shall be subject to disciplinary action only through
the Association. In circumstances where the Association has no jurisdiction, the
member shall be subject to disciplinary action by CGA Canada’s board of
directors.
(a) A member shall not obtain admission to membership by means of fraud or
other irregularity.
(b) A member shall notify the Association immediately regarding a person who
has obtained membership by means of fraud or other irregularity.
(a)
A member shall report to the Association a fact known to that
member sufficient to affect the admittance of any person whose admission,
readmission, or reinstatement may be detrimental to the Association.
(b)
An individual shall, when applying to become a student or a
member, not sign or be associated with any related letter, report, statement or
representation that the applicant knew or should have known, was false or
misleading.
R605
Responsibility for Firm
A member engaged
in a professional practice or the practice of public accounting who is
associated with a firm or corporation carrying on an accounting or tax
preparation business or practice whether as principal, partner, director,
officer or shareholder; and has a significant influence on the ownership or
management of such firm or corporation, shall be responsible to the Association
for any failure of such firm or corporation, including any non-member or
non-licensee to abide by the Code of Ethical Principles and Rules of Conduct
of the Association; and
A member who is a
principal, partner, director or shareholder of a firm engaged in the practice of
public accounting shall be required to establish, maintain and uphold policies
and procedures to ensure that all public accounting services are performed in
accordance with generally accepted standards of practice of public accounting,
as established by the Association, including the standards set out in the
CICA Handbook – Accounting and the CICA Handbook – Assurance and the
CGA Canada Public Practice Manual.
A firm or corporation carrying on a business or practice as described
in Rule R107.1 may use normal business methods to solicit business for its own functions,
but such methods may not be used or appear to be used, for the solicitation of clients
for the professional practice or the practice of public accounting with which the
member is associated.
R606
Detrimental Actions
(a) A member
shall not participate in any action that is detrimental to the Association or
the profession.
(b) A member shall, subject to Rules R105 and R201 report to the Association any
situation of which the member has sufficient personal knowledge and that the
member thinks may be detrimental to the Association or the profession.
A member who has
been found guilty or granted an absolute or conditional discharge of any
criminal or similar offence, which may cast doubt as to that member’s honesty,
integrity or professional competency, shall promptly inform the Association of
the conviction, finding of guilt or discharge, as the case may be, when the
right of appeal has been exhausted or expired. In such cases, the member may be
charged with professional misconduct by the discipline committee. A certificate
of conviction by any competent court shall be sufficient evidence of the
conviction and the perpetration of the offence.
Criminal or similar offences include, but are not limited to,
the following offences:
(a) fraud, theft, forgery or income tax evasion;
(b) violation of the provisions of any securities
legislation; or
(c) any criminal
or similar offence for conduct in, or related to, the member’s professional
capacity or for conduct in circumstances where there was reliance on their
membership in, or association with, the Association.
A member shall
immediately notify the Association if the member becomes bankrupt.
R609
Public Statements
A member shall
not make public statements or comments that may be interpreted as representing
the Association or its views, except when authorized to act as an ‘official
spokesperson’ for the Association.
R610 Requirement
to Reply in Writing
A member shall
reply promptly in writing to any request from the Association in which a written
reply is specifically required.
R611
Assistance to the Board
A member shall,
when required, comply with the request of the board or its committees in the
exercise of their duties in matters of the Act, By-Law Four or the Code of
Ethical Principles and Rules of Conduct, and when required, produce any
documents in the member’s possession, custody or control, subject to
Rules,R104.2 ,R104.3 and R201.
A member shall,
before knowingly employing a person who has been expelled or who is under
suspension from any accounting body, obtain through the Association the facts
concerning the expulsion or suspension.
R613
Legal Action Against a Member
A member shall,
before entering into a legal action against another member that might discredit
the profession, give the Association as much notice as is possible of such an
intention, outlining the basis of the proposed action.
R614
Use
of CGA Reference by Students
Students shall
not make any reference to the Certified General Accountants of Ontario, its name
or its designation, on stationery, business cards, business announcements,
business directories, office signs or advertising.
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1. ’Associate’ (of a firm)
A member who is
neither a partner, an employee nor a duly registered student.
2. ’Association’
The Certified General Accountants Association of Ontario, incorporated by
Act of the Legislative Assembly of Ontario on the twenty-third day of February,
nineteen hundred and eighty-three;
3. ‘Board’
The board of
governors of the Association
4. ’Client’
The person or entity engaging a member as an independent contractor for
the performance of professional services.
5. ‘Communication’
Refers to one of
three reports prepared for the client:
(a) Auditors’
Report:
The report that accompanies financial statements on which the member has
performed an audit, and which expresses an opinion on the fairness of those
financial statements.
(b) Review
Engagement Report:
The report accompanying unaudited financial statements in which the member
provides a limited degree of assurance about those financial statements.
(c) Compilation
Engagement Report:
A disclaimer signed by or identified with the member, clearly stating that
neither an audit nor a review has been performed, and that no other attempts to
verify the accuracy or completeness of the financial statements have been made.
6. ‘Designated Body’
An authorized
designated body that is authorized pursuant to the Public Accountants Act,
2004 to license and govern the activities of its members as public
accountants.
7. ‘Financial Statements or Information’
‘Statements, reports and footnotes related thereto that purport to show
an entity’s financial position, or results of operations, or changes in
financial position. The term includes balance sheets, income statements, cash
flow statements, and statements of retained earnings. The term does not include
incidental financial data included in management advisory or similar reports to
support recommendations to a client.
8. ‘Firm’
A
proprietorship, partnership, limited liability partnership, a professional
corporation or a corporation engaged in a professional practice or the practice
of public accounting.
9‘Licensee’
A member holding
a valid licence to practise as a public accountant.
10. ’Member’
An individual who holds a certified general accountant designation and is
in good standing. Where applicable, the term includes duly registered students
in the CGA program of professional studies.
11. ‘Member Advisor’
A person or
persons appointed by the Association for the specific purpose of providing
professional assistance to members, including members engaged in or entering a
professional practice or the practice of public accounting.
12. Multiple Member Professional Corporation
A professional
corporation comprised of more than one member of the Association.
13. ‘Profession’
The profession
of accountancy.
14. ‘Professional Colleague’
An accountant
recognized by statutory authority.
15. ‘Professional
Practice’
A
proprietorship, partnership, limited liability partnership or professional
corporation that provides professional services.
16. ‘Professional Services’
Any accounting,
assurance, taxation services, management advisory or consulting services or
other related services as may from time-to-time be recognized by the Association
that is performed or offered to be performed by a member for a client or
employer, whether or not the member asserts membership in the Association.
17. ‘Public Accountant’
Unless otherwise
specified by legislation, any person engaged in the practice of public
accounting.
18. ‘Public Accounting’
Providing, on a
basis that is independent of the person for whom the services are being
provided, any of the following services:
(a)
Assurance engagements, including an audit or a review engagement, conducted with
respect to the correctness, fairness, completeness or reasonableness of a
financial statement or any part of a financial statement or any statement
attached to a financial statement, if it can reasonably be expected that the
services will be relied upon or used by a third party. An assurance engagement
may or may not include the rendering of an opinion or other statement by the
person who is providing the services.
(b)
Compilation services, if it can reasonably be expected that all or any portion
of the compilations or associated materials prepared by the person providing the
services will be relied upon or used by a third party.
Exception to
Public Accounting If the compilation or associated materials prepared by the persons
providing compilation services that otherwise fall within paragraph 9b) contain
a notice in a prescribed form that provides that any assurance given by the
person is limited to the accuracy of the computations required in order to
complete the compilation, the provision of the compilation services does not
constitute public accounting as provided by the Public Accounting Act, 2004
A member who is
‘employed’ in the practice of public accounting is not considered to be
‘engaged’ in the practice of public accounting.
19. ‘Staff’
An individual or
entity employed or engaged under contract by the firm to provide services that
might otherwise be provided by a partner or professional employee of a firm and
includes partners.
20. ‘Student’
A person whose
application to undertake the program of professional studies approved by the
Association has been accepted by the Association and who has paid the
appropriate fees and has not withdrawn, or been suspended or expelled.
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