Statements, opinions or reports
Q1: What is the prescribed disclosure wording that must be used in statements, opinions or reports?
A: Licensees, firms and professional corporations must disclose that a licence is held, or that the professional corporation or firm is authorized to practise public accounting using prescribed wording when providing any accounting or assurance services in respect of a financial statement, or any part of a financial statement or any statement attached to a financial statement. Information on the prescribed disclosure wording, including a French language version, may be accessed at Prescribed Disclosure for Public Accountants.[close]
Q2: Please clarify what constitutes "statements, opinions and reports" for the purpose of requiring this disclosure statement. In the broadest sense, any written communication with a client or potential client may be construed to be a "statement, opinion or report".
A: It is only those "statements, opinions or reports" that are provided in respect of a financial statement, or any part of a financial statement, or any statement attached to a financial statement, or reporting on the results of applying specified auditing procedures to financial information, that must contain the disclosure wording. The requirement does not extend to other communications with or on behalf of a client or to a potential client.
The disclosure must be made in any statement, opinion or report for an assurance or compilation engagement in respect of which it can be reasonably expected that the services will be relied upon or used by a third party, when
(a) the engagement is datelined (the report is issued) in Ontario, or
(b) the work or procedures for the engagement is or are primarily performed in Ontario.
For clarification regarding what types of services require that a public accounting license must be held in order to provide them, refer to the document prepared by the Institute,
Updated Guidance Regarding Services that Require You to have a Public Accounting Licence that lists each of the CICA Handbook sections and states for each whether or not the practitioner or lead engagement partner must be licensed in order to perform such engagements. [close ]
Q3: If we are licensed public accountants, must the disclosure wording appear on all statements, including those for which a licence is not required?
A: The disclosure wording must be used by a licensee (or a professional corporation) when providing any accounting service, even if a public accounting license is not required in order to perform the service. Accordingly, the disclosure wording must be used for such services as compilation engagements (notice to readers) that are provided by a licensee, including Notice to Readers prepared for financial statements attached to personal tax returns. [close]
Q4: When must the disclosure wording be used by a partner of a firm who is located outside of Ontario?
A: A lead engagement partner located outside Ontario must use the “Licensed Public Accountant” disclosure in the statement, opinion or report for any assurance or compilation engagement in respect of which is can be reasonably expected that the services will be relied upon or used by a third party, when
(a) the engagement is datelined (the report is issued) in Ontario, or
(b) the work or procedures for the engagement is or are primarily performed in Ontario. [close]
Q5: Should a two-partner firm, where one partner is a licensed assurance partner and the other partner is a non-licensed tax partner use the prescribed disclosure wording of "licensed public accountants" in the plural form or "licensed public accountant" in the singular form when signing a report?
A: Since only the lead engagement person responsible for signing a report must be licensed as a public accountant, the disclosure wording of "licensed public accountant" in singular form is appropriate. In addition, it should be noted that since there is more than one partner in the firm, the report should refer to "we" instead of "I". [close]
Disclosure requirement for tax engagements
Q6: When a CA compiles a financial statement (for tax purposes or otherwise) but does not attach a report or if the report is not in the format prescribed by the Public Accounting Act, 2004 (which is currently the same as the standard wording prescribed in section 9200 “Compilation Engagements”), does he/she need to include the "Licensed Public Accountant" disclosure for that statement?
A: The disclosure wording must be used if the work is performed by a licensee (or a professional corporation). The disclosure would have to be in the covering letter if there is no report attached, or in the report that is not in the prescribed form.
Note that some firms use software packages, such as Caseware, or internally developed packages that include Notice to Reader wording for filing with the tax returns. The disclosure wording must still be used, irrespective of whether the report is produced electronically or on firm letterhead. [close]
Q7: Is a firm required to use the “licensed public accountant” disclosure when the firm provides tax services in respect of which the lead engagement partner is not licensed and the services include a “notice to reader” compilation engagement attached to a tax return. The partner signs the tax return, not the firm. However, the tax return is part of a broader non-assurance engagement in respect of which the firm signs the statement or report. Is the firm required to use the “licensed public accountants” disclosure wording?
A: The firm is not required to use to the disclosure wording in this case on the compiled statements accompanying the tax return as the compilation has been prepared and signed by the unlicensed partner. However, the firm may use the disclosure wording in the firm’s statement, opinion or report issued in respect of the broader engagement, if it wishes to do so. [close]
Q8: Is it required that the “licensed public accountant” disclosure must be used on the schedules of a tax return (often filed electronically) when the schedules are embedded in the return and the schedules are completed by a licensee?
A: The disclosure wording is not required for tax returns for which there are no compiled financial statements attached to the return. However, if compiled financial statements are attached to the tax return and the statements are prepared and signed by a licensee, then the disclosure wording must be used. [close]
Letterhead and business cards
Q9: Do we need to change our letterhead and business cards?
A: The wording "Licensed Public Accountant" is not required to be used in your letterhead or business card. However, you may use that wording in letterhead and business cards if you wish to do so, in reference to you personally, provided that "Licensed Public Accountant" follows your name and CA designation.
In respect of the letterhead of a professional corporation, such as John Doe Professional Corporation, any reference to the fact that the professional corporation is authorized to practise public accounting would have to use the wording "Authorized to practise public accounting by The Institute of Chartered Accountants of Ontario" after the name of the professional corporation. [close]
