FAQs - Public Accounting Licensing
Questions about the public accounting licensing system
Q 1: What is the role of the Public Accountants Council (PAC)?
A:Under the terms of the Public Accounting Act, 2004, the PAC is now an oversight body. It does not issue licences or revoke them. The PAC has adopted Standards that must be met to qualify for a licence and for the regulating of licensees. The Attorney General approved the Standards and they took effect as of June 20, 2006. The PAC Standards are of equal rigour to the standards that CAs were required to meet under the former Public Accountancy Act.
The PAC has developed criteria and processes for comprehensively reviewing and assessing the qualification and regulatory standards of the accounting bodies designated under the Act (the Institute, CGA Ontario and CMA Ontario). The PAC’s granting of authorization to license and govern members in the practice of public accounting requires that a designated body demonstrate that it meets the Standards that the PAC has adopted. The Institute has been granted authorization by the PAC to license and govern members in the practice of public accounting effective from November 1, 2006. [close]
Q 2: What is the Institute’s role in issuing licences?
A:The Institute has been granted authorization by the PAC to license members who have fulfilled the requirements established by the Public Accounting Act, 2004 and the PAC Standards. Accordingly, the Institute is the licensing body responsible for granting, renewing and revoking public accounting licences to CAs and for regulating CA licensees. [close]
Q 3: What is the Institute’s role in issuing certificates of authorization for professional corporations practising public accounting?
A:The Institute is responsible for issuing certificates of authorization to CA professional corporations that have fulfilled the requirements established by the Public Accounting Act, 2004 and PAC Standards. Accordingly, the Institute is responsible for granting, renewing and revoking certificates of authorization for CA professional corporations and for regulating CA professional corporations. In order for a certificate of authorization to practice public accounting to be issued to a professional corporation, it must be registered with the Institute as a professional corporation. The articles of incorporation must specify that the practice of public accounting is one of the objects. The certificate of authorization is valid until the Institute is notified in writing of changes to the professional corporation. Changes, such as practice closure, merger or changes to shareholders, must be submitted in writing to the Institute within 30 days of the change. Note that the lead engagement partner must be licensed as a public accountant when the statement or report issued by the professional corporation is in respect of any assurance engagement or a compilation engagement for which it can reasonably be expected that all or any portion of the compilation or associated material prepared by the Member providing the service will be relied upon or used by a third party and (1) the report for the engagement is issued in Ontario, or (2) the work for the engagement is primarily performed in Ontario. [close]
Q 4: When did the public accounting Standards set by the PAC come into effect?
A:The public accounting Standards adopted by the PAC and approved by the Attorney General took effect on June 20, 2006. The Standards are of equal rigour to the internationally recognized standards of qualification and regulation that existed under the provisions of the old Public Accountancy Act and which were the standards of the Institute.
The PAC’s Standards meet the requirement of s. 19(4) of the Public Accounting Act, 2004, that the standards for public accounting licensing “shall be no less rigorous than the internationally recognized standards under the [former] Public Accountancy Act as they existed on June 9, 2004” [the date on which the new Act was adopted by the Legislature]. The internationally recognized standards that existed under the former legislation were the CA standards of qualification and regulation. The Standards that are now in effect include:
- rigorous education, examination and practical experience requirements that are substantially equivalent to the requirements that the Institute has established;
- the enforcement of exacting rules of professional conduct related to the practice of public accounting;
- mandatory, cyclical practice inspection of licensees;
- professional liability insurance programs for public accounting work;
- continuing professional development requirements; and
- comprehensive discipline mechanisms. [close]
Q 5: What services require that a public accounting licence be held?
A: A public accounting licence is required when
- you are the lead engagement person responsible for signing the report or statement issued in respect of any:
- assurance engagement (including an audit or review engagement), or
- any compilation engagement in respect of which it can be reasonably expected that the services will be relied upon or used by a third party and the prescribed wording for the notice to reader is not used; and
- the report is issued in Ontario or the work for the engagement is primarily performed in Ontario.
A public accounting licence is not required if you
- are not the lead engagement person responsible for signing the report or statement . Members of the engagement team or who are otherwise involved with or may directly influence the outcome of the engagement, including the quality control review partner, are not required to be licensed;
- do not provide any assurance services (including audit or review engagements) but do provide such other services that may include: compilations in respect of which it can be reasonably expected that the services will be relied upon or used by a third party and the prescribed wording for the notice to reader is used, taxation, accounting, internal audit, controllership, insolvency services, or business advisory services.
Updated Guidance Regarding Services that Require You to have a Public Accounting Licence
( revised May 2009) that lists various sections of the CICA Handbook -Assurance and states for each whether or not the practitioner or lead engagement partner must be licensed in order to perform such engagements. [close]
Q 6: Compilation engagements: is a licence required?
A: A public accounting licence is not required in order to perform compilation engagements provided that the compilation and associated materials contain a notice to reader with the wording prescribed by Section 9200 of the CICA Handbook - Assurance (which is also the notice prescribed by the Public Accounting Act, 2004 and Ontario Regulation 238/05). However, a public accounting licence must be held if a compilation engagement is performed without the prescribed notice to reader wording and it is a compilation engagement in respect of which it can be reasonably expected that all or any portion of the compilation or associated materials will be relied upon or used by a third party.
A licence is also not required in respect of:
- a compilation report on pro forma financial statements as contemplated in Section 7115.13 of the CICA Handbook - Assurance; or
- a compilation of a financial forecast or projection in respect of future-oriented financial information, as contemplated in AuG-16 of the CICA Handbook – Assurance.
Please note that the compilation report wording prescribed in the CICA Handbook – Assurance for compilations on pro forma financial statements and financial forecasts or projections differs from that prescribed in Public Accounting Act, 2004 and Ontario Regulation 238/05.[close]
Q 7: What if I only provide accounting, taxation or compilation services but do not do any assurance engagements. Do I need to be licensed?
A:No. A public accounting licence is not required if you do not provide any assurance engagements (including auditing or review engagements) and restrict your practice to providing accounting, taxation or compilations in respect of which it can reasonably be expected that the services will not be relied upon or used by a third party or compilations in respect of which it can reasonably be expected that the services will be relied upon or used by a third party and the prescribed notice to reader is used.
However, the provision of these non-assurance services is considered to be providing accounting services to the public for the purposes of the Institute’s bylaws and rules of professional conduct. A practice providing these services must be registered with the Institute and is subject to regulation as a public accounting practice. This also means that minimum professional liability insurance coverage must be maintained and that the practice is subject to payment of the Annual Practitioner Fee. Practitioners who provide compilation engagements are also subject to practice inspection by the Institute, even though a public accounting licence is not required to provide such services. See Institute Bylaw 1.1.21 for the definition of “practice of public accounting”. [close]
Q 8: What individuals within a firm need to be licensed in order to provide public accounting services?
A: Council Guideline No. 2007-2, enacted by Public Accountants Council under the provisions of the Public Accounting Act, 2004, and Institute Regulation 9-1 s14 require that only the lead engagement person responsible for signing a statement or report for a public accounting engagement must be licensed as a public accountant. Other members of the engagement team, including the quality control reviewer or other experts may be, but are not required to be, licensed as public accountants in Ontario. The Institute's former Bylaw 913, requiring all partners to be licensed, has been repealed. [close]
Q 9: What individuals with a professional corporation need to be licensed in order to provide public accounting services?
A: Only the lead engagement partners on public accounting engagements performed by the professional corporation are required to be licensed. It is no longer required that every shareholder be licensed, just as it is no longer required that every partner of a partnership be licensed. The shareholder(s) of a professional corporation that is a partner of a firm (partnership) do not need to be licensed. The professional corporation can be a partner of the firm without any of the shareholders of the professional corporation being licensees. [close]
Q 10: Is it required that other members of the engagement team, including those from practices such as tax or information systems, be licensed by the Institute as public accountants?
A:No, a public accounting licence is not required if you are not the lead engagement person responsible for signing the report or statement. Members of the engagement team or those who are otherwise involved with or may directly influence the outcome of the engagement (including the quality control review partner) are not required to be licensed. [close]
Q 11: Is it required that the engagement quality control review partner must be licensed by the Institute as a public accountant in Ontario? An engagement quality control reviewer may be located outside Ontario or, in some cases, outside of Canada because of their experience and industry knowledge.
A: It is not a requirement that the engagement quality control reviewer be licensed as a public accountant in Ontario. [close]
Q 12: Will other partners of a firm be eligible to obtain a licence if such eligibility is dependent upon obtaining a minimum number of chargeable hours in the performance of assurance and/ or compilation engagements? These other partners may include those in the “chain of command” on assurance engagements and partners in national or operational roles with their firms.
A: The definition of 'chargeable hours' includes hours capable of being charged to a client of a public accounting firm because the hours relate to the performance of a public accounting engagement (assurance and/or compilations in respect of which it can be reasonably expected that the services will be relied upon or used by a third party). All such partners will be eligible to obtain a licence even if they are not required to have a licence. [close]
Q 13: Is there a requirement for a lead engagement partner located outside Ontario to be licensed if providing assurance services for an Ontario entity?
A:A lead engagment partner located outside Ontario must be licensed in Ontario 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, or reporting on the results of applying specified auditing procedures to financial information, 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.
In circumstances where the lead engagement partner needs to be licensed in Ontario, he or she must first become a member in Ontario. Since income would then be earned from the public accounting in Ontario, a practising office (part-time or full-time) of the firm must also be registered with the Institute and will be subject to all requirements and regulations applicable to public accounting practices in Ontario. [close]
Questions about licensing – public accounting licence currently held
Q 14: I currently hold a public accounting licence and am engaged in the practice of public accounting by providing assurance services. What do I need to do?
A:You will be required to renew your licence annually with the Institute. The Institute has established a licensing period commencing November 1st in each year and ending on October 31st of the following year.
In order to be eligible for an automatic renewal of your public accounting licence, you must meet the following basic requirements as set out in Regulation 9-1 s3:
A Member who holds a public accounting licence is eligible to renew that licence, upon:
-completing the renewal application for licence and paying the renewal fee of $214.70 (includes HST of $24.70)
-completing the Continuing Professional Development Requirement;
-completing the Practice Inspection Requirement; and
-completing the Professional Experience Requirement.
A Member who holds a public accounting licence shall not be eligible to renew a licence if:
-the Member fails to apply to renew the licence prior to expiry;
-the rights and privileges of the Member are suspended;
-the public accounting licence is suspended or has been revoked; or
-the Member held a licence issued by another authorized designated body under the Public Accounting Act, 2004, and such licence was suspended or revoked and has not been reinstated by the other authorized designated body. [close]
Q 15: I currently hold a public accountants licence but do not provide any assurance services. What do I need to do?
A:Licensees are required to track and report hours spent in providing "public accounting services" and "designated services". If the Professional Experience Requirements cannot be met within the immediate past five years, the licence will not be renewed. In order to obtain a licence, either the professional experience must be completed, or the current competency requirement for new licensees as defined in Regulation 9-1 s2.7 must be met. In exceptional circumstances, when the professional experience requirement cannot be met, there is some discretion permitted to the Public Accounting Licensing Board. The Licensing Board must be satisfied that the exceptional circumstances of the Member will not continue beyond a period of two years from the date of the application or renewal. [close]
Q 16: Can I request that my name be removed from the roll of active public accountants?
A:Yes. To request that your name be removed from the roll of active public accountants, complete the following form and return it, with our licence, to the Institute.
Request to Remove Name From The Roll of Active Public Accountants in Ontario [close]
Questions about the licensing certification report
Q 17: What is the reporting period for the experience certification report?
A:The reporting five year experience period is November 1 to October 31 each year. Given that there was no requirement to track and report eligible hours prior to the licensing renewal period that began on November 1, 2008, licensees who may not have been tracking their hours or may not have been tracking all of the hours prior to that date that would qualify as eligible hours may provide a reasonable estimate of the hours obtained in each year of the four-year period that ended on October 31, 2008. However, the actual number of hours acquired in the 12-month period that will end on October 31, 2009 must be reported, including a reasonable estimate of the number of hours that are likely to be obtained in the period from the date subsequent to November 1, 2008 to which hours have been recorded and October 31, 2009. Licensees are reminded that they must track and keep a record of the actual number of hours obtained in the 12-month period ending October 31 st in each year and to provide a copy of the record of the actual hours to the Institute for review as part of the next practice inspection of the practising office . [close]
Q 18: Can the reporting period for CPD for licence renewals be the same as the reporting period for the annual membership renewal, ie. end December 31st?
A:Hours to verify compliance with the mandatory continuing professional development requirement of 120 hours in the last three-year period (including 60 verifiable hours) can be tracked on a calendar year basis, to coincide with the CPD compliance reporting that is done as part of the annual membership renewal. (For licence renewals as of November 1, 2010, the CPD requirement up to December 31, 2009 must be completed). [close]
Q 19: What kind of engagements qualify as "assurance" engagements in Part A of the licensing certification report?
A:If chargeable hours were incurred in the preparation of a form of reporting covered by the CICA Handbook - Assurance, these hours may be classifed as "assurance" under the Part A category (even though a licence may not be required to perform this type of engagement). For instance, this would include chargeable hours on the following types of engagements:
- Section 5925: An audit of internal control over financial reporting that is integrated with an audit of financial statements; and similarly, reports issued under PCAOB Audit Standard No. 5;
- Section 5970: Auditor's reports on controls at a service organization; and similarily SAS 70 Service Auditor Reports;
- Section 7000- 7500: Auditors involvement with: interim statements and other public documents, offering documents, underwriters, etc.
- Section 7600: Reports on the application of accounting principles;
- Section 9100 or 9110 : Reports on results of applying the application of agreed upon specified auditing procedures (to financial information other than financial statements, on internal controls over financial reporting, etc.)
For further guidance on licensing requirements, refer to
Updated Guidance Regarding Services that Require You to have a Public Accounting Licence
(revised May 2009) [close]
Q 20: What is the difference between "assurance, including auditing or review engagements" that qualify as "public accounting services" and some of the other "designated services" such as "research conducted for, or advice given to, assurance clients on matters related to assurance engagements"?
A:If the designated service hours are billed as part of the public accounting engagement ie. performed by a member of the engagement team, then they can be shown in Part A. If designated service hours are not billed as part of the engagement but were acquired in a practising office or firm in a consulting or advisory role, as stand alone consulting engagements, or in a capacity in which the member is not independent of the entity (e.g. CFO) then they should be reported under Part B. [close]
Q 21: Can the 2,500 hours of profession experience be comprised entirely of services categorized under Part A “Public Accounting Services”?
A:Yes, eligible hours can be comprised entirely of 2,500 chargeable hours of public accounting services in the form of assurance and/or compilations in respect of which it can reasonably be expected that the services will be relied upon or used by a third party recorded in Part A. The minimum requirement in this category otherwise is 1,250 hours, with up to 1,250 hours required in Part B "Designated Services". [close]
Q 22: Does time spent preparing tax returns qualify as "eligible hours"?
A:Tax hours that do not qualify as per the definition of taxation in Part B of the certification form are not eligible hours and cannot be claimed as part of the 2500 eligible hours needed. Time spent in the preparation of tax returns do not qualify as eligible hours. [close]
Q 23: My practice has not previously been “practice inspected”, although it is subject to practice inspection. As a result, I cannot provide a date of an inspection report – what should I indicate on the public accounting experience certification report?
A:Indicate that the office has not been inspected on the public accounting experience certification report. If all of the other criteria for being licensed (i.e. recognized capacity, eligible hours, CPD) are met, a licence will be granted on the condition that the office receives a successful practice inspection within 12 months following the date of issuance or renewal of the licence. Your practice will then be scheduled for an inspection. [close]
Q 24: There are various services referred to in the Updated Guidance Regarding Services that Require You to have a Public Accounting Licence (updated May 2009) even though licensing may not be a requirement, such as value for money audits. Would time spent on these services qualify as assurance hours in Part A of the public accounting experience certification report?
A:Yes, time spent on these services would qualify as assurance hours in Part A of the public accounting experience certification report, if the time was acquired in a recognized capacity in a public accounting practice. [close]
Q 25: It is not uncommon as part of the assurance and compilation engagements to prepare the corporate tax return as part of the work being done to put together the tax provision. Does the time spent on corporate tax returns [or GST returns] qualify as a necessary part of “assessing the appropriateness of taxation provisions and related financial reporting”?
A:No, this time would not qualify under pubic accounting (assurance or compilations) in part A or designated services in part B of the public accounting experience certification report as it needs to link to the application of standards as described in the CICA Handbook - Assurance. However, time spent completing audit or review checklists relating to tax provisions could be included under Part A as assurance or compilations, as applicable, if obtained while participating in a recognized capacity with a public accounting practice. [close]
Q 26: When performing compilation engagements, may the time spent making and documenting the judgment as to the treatment of a tax issue, if tracked separately from the hours spent on tax services, be claimed for recognition as public accounting hours in Part A rather than as designated services (“taxation services related to assessing the appropriateness of taxation provisions and related financial statements”) in Part B of the public accounting experience certification report?
A:The time spent making and documenting the judgment as to the treatment of tax issues is most appropriately reported as “designated services” under “taxation services related to assessing the appropriateness of taxation provisions and related financial statements” in Part B. The hours would not be recognized under public accounting services in Part A. [close]
Q 27: Does time spent providing tax consulting, tax planning, expert tax advice, etc qualify under Part A or Part B of the public accounting experience certification report?
A:No, this time would not qualify under either public accounting services in Part A or designated services in Part B of the public accounting experience certification report. [close]
Q 28: Would time spent assembling a financial statement for personal income tax returns (e.g statement of business activities, statement of real estate rentals) qualify as eligible “compilation” hours under Part A of the public accounting experience certification report? Note that these schedules may be part of a “GIFI” filing; the disclosure wording may be embedded in the software?
A:No, this type of work is considered tax return work, and therefore should not be included under public accounting services in Part A or designated services in part B of the public accounting experience certification report. In order for the hours to qualify under Part A, the compilation should relate to a full set of financial statements, and there should be a reasonable expectation that all or any portion of the compilation or associated materials will be relied upon or used by a third party. In this case the financial information is only being prepared for a specific user (CRA). CRA is not considered to be a third party in this situation per the Public Accounting Act, 2004. [close]
Q 29: I prepare several compilations for specific users (eg CRA). Would these hours qualify under public accounting services in Part A of the public accounting experience certification report?
A:No, only compilation engagements in respect of which it can be reasonably expected that all or any portion of the compilations or associated materials will be relied upon or used by a third party would qualify under Part A. [close]
Q 30: I provide assurance services for or in support of engagement teams by working out of the national office of my firm. The national office is not currently practice inspected, although the office is registered as public accounting office with the Institute. The partners in the national office may not be selected for practice inspection as they are not the “lead” engagement partners for any clients. Do the hours I spend providing these services qualify for recognition as public accounting services in Part A or designated services in Part B of the public accounting experience certification report?
A:The national office of the firm is considered to be a practising office for the purpose of members of the office being licensed as public accountants if the firm is also registered with the Canadian Public Accountability Board (CPAB) as a participating audit firm. CPAB conducts an annual inspection of each participating audit firm and the Institute recognizes such inspection as being applicable to each practising office of the firm. [close]
Q 31: I (or my firm) charge clients on a “value billing” basis and do not specifically track chargeable hours for any clients for which such services are provided. I can theoretically estimate how many hours I work during the year, and the proportion of the time that was spent providing assurance type service and can provide the Institute with an estimate of such hours. Will this be acceptable?
A:No. To ensure consistency and reliability of the hours reported to the Institute, members who provide services for which the clients are charged on a value billing basis must track and report the actual hours that they spend on such engagements even if the hours are not chargeable. [close]
Q 32: I am a managing partner in the regional (or national) office of my firm, which limits the time spent on assurance engagements. Will I be able to renew my licence?
A:The Public Accounting Licensing Board (PALB) has discretion to recognize time spent in respect of public accounting engagements by members in senior leadership positions with firms. The hours spent in supervision, management or oversight of the leadership of the engagment team(s) qualify as chargeable hours even if these hours are not billed to clients, provided that the responsibilities carried out were significantly more than strictly administrative in nature and included such functions as reviewing assurance files of major clients or high-risk clients, interpretation or application of GAAP and GAAS or professional standards, or advice given to assurance clients on matters related to assurance engagements. The hours should be reported in Part A of the experience certification report. You will need to track the hours and complete the declaration each year. Members who are in head or national offices of firms that are registered with CPAB as participating audit firms will meet the practice inspection requirement through the CPAB annual inspection of the firm. [close]
Questions about licensing – public accounting licence not currently held
Q33: Do quality control services (engagement file quality reviews and monitoring services) qualify as providing assurance services for the purpose of meeting public accounting experience requirements?
Quality control services conducted in accordance with assurance standards as outlined in the CICA Handbook-Assurance do qualify as assurance services for the purpose of meeting public accounting experience requirements. (Note that a public accounting license is not required in order to provide these services). [close]
Q34: Please provide clarification regarding when a practitioner can reasonably expect that third parties will rely on or use the compilation or associated materials, for the purposes of qualifying this experience as meeting public accounting experience requirements.
Third party reliance is a matter of professional judgment. Practitioners should discuss with their clients whether third parties could be reasonably expected to use or rely upon any portion of the compilation or associated materials, and they should document this discussion. Factors to consider in this discussion could include:
- Is there any form of external financing that does or could require reliance on financial statements?
- Do suppliers ask for financial statements as part of the negotiation for credit terms?
- Are there prospects regarding the sale of the business that could result in reliance upon these materials?
Please remember that CRA is not considered to be a third party. A tax return electronically filed with CRA with a Notice to Reader embedded in the software will likely not qualify in this respect, unless a third party also receives this filing. [close]
Q35: Where can members, who need to submit a letter to the Institute's Public Accounting Licensing Board (PALB) for approval of the renewal of their public accounting licence, find resources to assist them in explaining how they meet the public accounting licensing requirements?
The PALB has the discretion to renew a licence of a member who meets all of the Additional Requirements prescribed in Bylaw 902(5), which cover the requirements for "participating in a recognized capacity in public accounting services", and also meets the requirements listed below, but does not meet all of the "practising public accounting in a substantive way" requirements. The practising in a substantive way requirements consist of having obtained a minimum of 2,500 hours consisting of a minimum of 1,250 eligible hours in public accounting services and up to 1,250 of eligible hours in designated services within the immediate past five years. The PALB must be satisfied that the member otherwise has the required capabilities, competence and current skills to provide public accounting services. The member must have:
1. Met the practice inspection requirements outlined in Bylaw 902(5)(a); and
2. Met the continuing professional development requirement outlined in Bylaw 902(5)(c); and
3. As a member of a firm or practising office, "participated in a recognized capacity in public accounting services (assurance and/or compilations relied upon or used by a third party)", within the immediate past five years of the date of the Institute’s receipt of the application for a new licence or the licence renewal date, as applicable. [close]
Q 36: Can I apply for a public accounting licence?
A:Yes. The application form for applying for a public accounting licence if a licence is not currently held may be accessed at Public Accounting Licence.
A Member who has never held a public accounting licence or whose licence has lapsed or expired is eligible to be issued a public accounting licence, pursuant to bylaw 9.3, upon:
-completing the application for licence and paying the non-refundable application fee of $214.70 (includes HST of $24.70)
-satisfying the Public Accounting Licensing Board of good character;
-completing the Continuing Professional Development Requirement;
-completing the Practice Inspection Requirement; and
-completing either the Professional Experience Requirement or the Current Competency Requirement.
-if the Member became a Member of the Institute after October 31, 2006, completing, or having completed while a Student, the Qualifying Experience Requirement which consists of a minimum of two years of prescribed public accounting experience;
-if the Member became a Member of the Institute pursuant to Regulation 6-2 or its predecessor, successfully completing, or having successfully completed prior to admission, the CA Reciprocity Examination, Part II; [close]
Q 37: I’m a newly qualified CA. Can I apply for a public accounting licence?
A:Yes. The application form for applying for a public accounting licence if a licence is not currently held may be accessed at Public Accounting Licence.
A newly qualified CA who, within the immediate past five years of the date of applying for a public accounting licence, completed the 2500 chargeable hours in public accounting, including 1250 chargeable hours in assurance (of which at least 625 chargeable hours were in financial statement auditing) as a CA student registered with the Institute will have fulfilled the professional experience requirement and need not obtain additional hours in order to qualify for a licence.[close]
Q 38: I am a newly qualified CA and would like to apply for a licence. Do hours accumulated from attending the School of Accountancy and/or the Staff Training Program qualify towards my mandatory three-year Continuing Professional Development requirement?
A:These hours do qualify as verifiable continuing professional development. [close]
Questions about licensing and other fees
Q 39: What is the fee that must be paid to obtain a licence?
A:The fee to apply for a public accounting licence for the period ended ended October 31, 2012, if a licence is not currently held, is $214.70 (includes HST of $24.70). [close]
Q 40: What is the public accounting licensing renewal fee?
A:The renewal fees for the period November 1, 2011 through to October 31, 2012 are as follows:.
$214.70 (includes HST of $24.70). A late fee of $45.00 may be applicable. Final payment is due not later than October 31. [close]
Q 41: Are there any other fees that are associated with having a licence?
A: The annual practitioner fee (APF) applies to each firm engaged in the practice of public accounting or in providing accounting services to the public. The fee is payable on an annual basis in respect of each Member residing or practising in Ontario who is a proprietor, partner, shareholder or employee of the firm; or provides public accounting or accounting services for or on behalf of the firm on any basis, or otherwise receives any income, excluding pension or retirement investment income, from the firm, including through the engagement by or employment with a related business or practice.
A billing notice for the Annual Practitioner Fee is sent each year, together with the public accounting licensing fee, if applicable, to sole proprietors (including part-time practitioners), firms and professional corporations. The fee must be paid by or on behalf of each proprietor, partner, shareholder or employee of the practice who earns income from the practice of public accounting. If you are not practising public accounting or if you derive no income from a practice of public accounting, you may claim an exemption from payment of the Annual Practitioner Fee. [close]
Q 42: I do not hold a public accounting licence because I only provide assurance services for a charity (or a church, temple, mosque, or synagogue) for which I do not receive any fee or other reward. How am I affected by the new licensing standards?
A:Members who provide public accounting services without reward, under certain conditions, are exempted by Ontario Regulation 402/08 from the requirement to be licensed. Members who provide these services, however, are required, effective January 1, 2009, to have professional liability insurance coverage.
Public accounting services for this purpose includes one or more of the following:
· assurance including auditing or review engagements;
· compilations not accompanied by the prescribed Notice to Reader if it can reasonably be expected that all or any portion of the compilations or associated materials will be relied upon or used by a third party.
The additional requirements that must be met are that the assurance engagement must be done:
(a) by a person who is a member of a professional accounting body that administers a process for addressing public complaints against its members and who is insured against professional liability; and
(b) on a basis that is independent of the person for whom the services are being provided.
Insurance requirement for members providing public accounting services without reward
To assist members who provide assurance services without reward for small charitable and not-for-profit organizations, the Council has approved the establishment of a policy to provide insurance coverage at no cost to such members, providing that they register with the Institute and meet certain prescribed terms and conditions. One of the conditions is that each organization for which assurance services are provided without reward has annual gross revenue from all sources of $100,000 or less.
To obtain details on the terms and conditions of qualifying for such coverage under the Institute’s policy and to register for coverage, please complete and submit an application form.
Members who provide assurance services without reward for organizations having annual gross revenue in excess of $100,000 or who otherwise do not meet the prescribed terms and conditions must obtain their own insurance coverage. They are also required to file annually with the Institute a declaration confirming the insurance coverage, pursuant to the Mandatory Professional Liability Insurance Regulation.[close]
Q 43: Why was I billed the Annual Practitioner Fee when I had let my licence lapse?
A:The annual practitioner fee (APF) applies to each member who provides specified services to the public even if a public accounting licence is not required for such services (see definition of “practice of public accounting” in Institute Bylaw l03(25) ). Those services include
- accounting that involves analysis, advice and interpretation in an expert capacity (but excluding record keeping),
- taxation insofar as that involves advice and counseling in an expert capacity (but excluding mechanical processing of returns),
- compilation engagements.
Members who provide such accounting, tax or compilation services are subject to payment of the Institute’s annual practitioner fee and therefore are sent the notice of the APF. [close]
Questions relating to firms, including sole proprietors and professional corporations
Q 44: As a firm, we appear to be registered with the Institute but do not appear to be licensed. Can a firm be licensed?
A:A firm is registered with the Institute as a public accounting practice under Bylaw 307(1). It is the individual partners of the firm who are licensed as public accountants. The firm is deemed to be licensed under Institute bylaws, as a result of the firm being registered and the partners being licensed, and therefore the firm is required to use the “Licensed Public Accountants” disclosure in the statements, opinions or reports issued by the firm in respect of assurance and compilation services. [close]
Q 45: Can a CA who is not a licensee be a partner in public accounting firm?
A:Yes, non-licensed CAs may be partners in a public accounting firm; however, per Council Guideline No. 2007-2 enacted by the PAC, the lead engagement person responsible for signing an assurance report or compilation (see Q6) report must be licensed if the report for the engagement is issued in Ontario, or the work for the engagement is performed primarily in Ontario. [close]
Q 46: Can a partnership be registered as a public accounting firm?
A:Yes. The application and information for registering a partnership as a public accounting firm may be accessed Registration Information & Forms. [close]
Q 47How do the public accounting Standards impact my sole proprietorship?
A:There should be no impact on sole proprietorships regarding such matters as standards of practice, rules of professional conduct, practice inspection, professional liability insurance or other regulatory requirements and processes that are set out in the Institute’s bylaws or in the requirements for licensing firm members. Now that the Institute is authorized by the PAC to license members, all matters relating to granting and revoking licences and payment of licensing fees that in the past were carried out by the PAC will in future be carried out directly by the Institute.
In terms of the nature of public accounting services provided by a sole proprietorship, the Public Accounting Act, 2004 specifies that a licence is required for all assurance work, including audit and review. This is the same as was the case under the previous licensing legislation. Reference should also be made to the various sections of the CICA Handbook – Assurance that refer to the preparation of reports. In that regard, the Institute has prepared a document,
Updated Guidance Regarding Services that Require You to have a Public Accounting Licence that lists each of the Handbook sections and states for each whether or not the practitioner or lead engagement partner must be licensed in order to perform such engagements.
However, the Act permits compilation services in respect of which it can reasonably be expected that the services will be relied upon or used by a third party to be provided without being licensed as a public accountant as long as the compilation and associated materials contain a prescribed notice to reader. This exemption provision in the Act means that a member would not be required to hold a public accounting licence if he or she does not provide any assurance services and, in respect of compilation engagements, only prepares compilations and associated materials that are accompanied by the prescribed notice to reader. A regulation adopted by the Ontario government prescribes the same notice to reader as is set out in Section 9200 of the CICA Handbook - Assurance. This is a change from the public accounting licensing requirements that have been in place to date, under which a public accounting licence has been required in order to provide any compilation services.
A licence is also not required in respect of
- a compilation engagement in respect of which it can reasonably be expected that the services will not be relied upon or used by a third party
- a compilation report on pro forma financial statements as contemplated in Section 7115.13 of the CICA Handbook-Assurance; or
- a compilation of a financial forecast or projection in respect of future-oriented financial information, as contemplated in AuG-16 of the CICA Handbook – Assurance.
However, please note that the compilation report wording prescribed in the CICA Handbook – Assurance for compilations on pro forma financial statements and financial forecasts or projections differs from that prescribed in Public Accounting Act, 2004 Reg 238/05. [close]
Q 48: Can I register a sole proprietorship as a public accounting practice that provides assurance engagements?
A:Yes. The application and information for registering a sole proprietorship as a public accounting firm may be accessed Registration Information & Forms. [close]
Q 49: I practise public accounting through a professional corporation. How does the change in the licensing system impact me?
A:There will be no impact on professional corporations that were issued certificates of authorization under the former public accounting legislation. These professional corporations may continue to practise public accounting through the professional corporation. The Institute has issued a certificate of authorization to practise public accounting to all such professional corporations. [close]
Q 50: Can I apply for a certificate of authorization for my professional corporation?
A:Yes. If the professional corporation is registered with the Institute and the Ontario Ministry of Government Services but has not also been issued a certificate of authorization to practice public accounting, a written request to now have the professional corporation be so authorized should be sent to the Institute to the attention of Member and Student Records.
If the professional corporation has not yet been established, the application and information regarding registering a professional corporations and for a professional corporation to be authorized to practice public accounting, together with sample articles of incorporation and information about registering the corporation with the Ontario Ministry of Government Services may be accessed at Registration of Professional Corporation. [close]
Q 51. I am a licensed member with either residence or employment outside of Ontario. How does the Public Accounting Act, 2004, and the Standards adopted by the Public Accountants Council (PAC) impact me?
A:If you and/or your firm are practising public accounting in Ontario (defined in the Act as providing any assurance services, including audit or review engagements, or any compilation services that are not accompanied by the prescribed note set out in Ontario Regulation 238/05 and in Section 9200 of the CICA Handbook) the following information is relevant:
Membership in the Ontario Institute and fulfilment of prescribed licensing requirements
Under the Public Accounting Act, 2004, licensing and authorization to practice are linked to membership in the Institute; this requires that the person providing the services must be a member of the Ontario Institute and must meet the requirements established by the Standards adopted by the PAC and by the Institute for licensing eligibility. There is no longer a provision that allows any person to obtain a temporary licence or a permit to practice for the purpose of providing public accounting services on a short-term or occasional basis in Ontario.
The membership application forms for affiliation from another provincial institute can be printed at www.icao.on.ca/CA/1008page2661.aspx
Lead engagement partner or practitioner must be licensed in Ontario
A public accounting licence is required in Ontario if you are the lead engagement partner (or the sole practitioner) on a public accounting engagement and
- The engagement is datelined (the report is issued) in Ontario; or
- The work or procedures for the engagement is or are primarily performed in Ontario
The application for a public accounting licence form can be printed at www.icao.on.ca/Forms/1008page6867.pdf
Firm or practice must be registered with the Ontario Institute
In addition, if a firm is located outside of Ontario and is providing public accounting services in Ontario for which a licence is required, the firm is required to be registered as a public accounting practice with the Ontario Institute. The firm will be subject to Ontario Institute regulatory processes, such as practice inspection, mandatory professional liability insurance and payment of the annual practitioner fee. The firm registration form can be printed at http://www.icao.on.ca/CAfirms/1008page2662.aspx
Mandatory disclosure requirement for licensed public accountants
Licensees and firms must meet the new disclosure requirements for reports issued for clients for whom they are providing any accounting or assurance services in Ontario. The disclosure does not need to be included in any other reports for use outside of Ontario unless the engagement is datelined (the report is issued) in Ontario or the work or procedures for the engagement is or are primarily performed in Ontario. A licensee is required to use the disclosure wording “Licensed Public Accountant” following his or her name and the designation “Chartered Accountant” or the initials “CA”. In addition, a sole practitioner or a firm must also use the descriptive style of either “Chartered Accountant(s)”, if not part of the firm name, following the practice or firm name (a sole practitioner may use the initials “CA” after his or her name). The disclosure must be used in respect of any financial statement, or any part of a financial statement or any statement attached to a financial statement. For more information on the prescribed disclosure requirement, refer to www.icao.on.ca/CA/PublicAccounting/DisclosureReq/page7007.aspx [close]
Questions about licensing – CA students
Q 52: I am a CA student registered with the Institute. Can I apply for a licence?
A:Only Chartered Accountants in good standing with the Institute who have current public accounting experience, may apply for a public accounting licence. Information about licensing will be provided with the membership admission information. [close]
Q 53: How do licensing changes affect the training of CAs as proposed in the strategic plan for the CA profession?
A:Changes in the strategic plan were based on the Public Accounting Act, 2004 coming into force. In the context of the strategic plan, the new Act enables the Institute to expand training opportunities for students in public practice beyond audit and assurance, and to provide training opportunities for students in taxation or business advisory services within CA firms, and also in business/industry or government where over half of our membership currently work at senior levels. The profession's ability to do this was constrained under the prior public accounting legislation, as it required all CAs to train in public accounting even if they did not go on to practise it. [close]
Question related to members of other accounting bodies
Q 54: Can the CMAs and CGAs in my office apply for a public accounting licence with the Institute?
A:No. The Public Accounting Act, 2004 requires that the accounting body granting the designation (CA, CGA or CMA) must meet the Standards adopted by the PAC in respect of qualification and regulation in order for the accounting body to be authorized by the PAC to license their members. If authorization to license their members is granted to CGA Ontario and CMA Ontario, it would be only those members of the respective accounting body (CGA Ontario or CMA Ontario) who, on or after the date of authorization have met the required standards who would be eligible to be issued a licence. There is no “grandparenting” of CMAs or CGAs into licensure under the Act.CMAs and CGAs also remain eligible to qualify for membership in the Institute and the use of the CA designation by successfully completing the Institute’s longstanding bridging provisions that include writing and passing the Uniform Evaluation (UFE). Once they qualify as CAs and complete the Institute’s requirements for licensing as a public accountant, they would be eligible to be licensed by the Institute. [close]
Q 55: Will allowing CGAs and CMAs to do audit work drive down the costs of that work?
A:Allowing accountants with other designations to do audit work should not change the time-consuming and complex nature of the work that influences costs. As the new legislation and the Standards adopted by the PAC keep the standards for audit work at the high levels that existed under the previous public accounting legislation, there will be no opportunity to cut corners by being less thorough. All professionals who provide audit services will be required to meet the high standards for public accounting that have been exemplified by this province’s Chartered Accountants for the past 128 years. [close]
Q 56: Can a licensee who is a CGA or a CMA be a partner in a CA firm?
A:No. The Chartered Accountants Act, 1956 prohibits any person who is not a member of the Institute from being a partner in a CA firm. [close]
Q 57: Can a licensee who is a CGA or a CMA be a shareholder in a professional corporation in which CAs are also shareholders?
A:No. The Business Corporations Act and the Chartered Accountants Act, 1956 stipulate that all of the issued and outstanding shares of a professional corporation practising as a Chartered Accountant must be owned either directly or indirectly by members of the Institute. [close]
Q 58: I am a Certified Public Accountant (CPA) in the United States. What is required in order to be licensed in Ontario?
A:A U.S. CPA will need to be admitted as a member of the Institute of Chartered Accountants of Ontario, complete the application form for a public accounting licence and meet the standards prescribed by the Institute for qualification for licensing as a public accountant. There is no longer any provision for granting temporary licences or permits by the Public Accountants Council or by the Institute.
Information on how to apply for membership in the Institute on the basis of being a CPA in good standing with a state board of accountancy in the United States with which the Institute has reciprocity is available at http://www.icao.on.ca/Admissions/InternationallyTrainedAccountants/MemberAcctgBodyOutsideCanada/1010page13560.aspx [close]
Questions about the “Licensed Public Accountant” disclosure requirement
Refer to Frequently Asked Questions about Disclosure Requirements for Licensed Public Accountants
