chargeable hours acquired as a result of participating in a recognized capacity in providing public accounting services; and
other hours acquired in designated services.

Chargeable hours

“Chargeable hours” are hours normally chargeable to clients of a public accounting practice, excluding work of a routine clerical nature. Licensees who charge clients on a “value billing” basis should track and report the actual hours that they spend on such engagements even if the hours are not chargeable.

Public accounting services

“Public accounting services” are:

assurance, including auditing or review engagements;

compilations 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, whether or not the compilations or associated materials are accompanied by the prescribed Notice to Reader.

Hours acquired in the following designated services may be recorded as public accounting services if they were acquired while participating in a recognized capacity in providing public accounting services for the practice or firm:

research on the interpretation or application of either or both of Canadian Generally Accepted Accounting Principles (“GAAP”) and Canadian Generally Accepted Assurance Standards (“GAAS”), or on professional standards;
research conducted for, or advice given to, assurance clients on matters related to assurance engagements.

If recorded as public accounting services hours, such hours may not also be counted as designated services hours within the total 2500 eligible hours requirement.

Also see below, Recognition of hours acquired as part of the work for determining tax matters.

A minimum of 1,250 eligible hours in public accounting services is required over the five-year period.

Designated services

“Designated services” are:

taxation services related to assessing the appropriateness of taxation provisions and related financial reporting (also see below, Recognition of hours acquired as part of the work for determining tax matters);
performance measurement relating to the evaluation, development and interpretation of an entity’s financial and non-financial information that measures and enhances an entity’s organizational performance;
forensic accounting;
research on the interpretation or application of either or both of Canadian Generally Accepted Accounting Principles (“GAAP”) and Canadian Generally Accepted Assurance Standards (“GAAS”), or on professional standards;
financial reporting involving the review of accounting principles and financial statement disclosure and the appropriateness of internal controls for the purpose of presenting fairly the financial statements of an entity;
corporate finance services related to assisting a client in obtaining financing by explaining the financial statements to a financial institution, and assisting a client in analyzing the accounting effects of certain transactions;
research conducted for, or advice given to, assurance clients on matters related to assurance engagements;
training of other accountants or staff of the practice or firm in respect of the performance of assurance services where such training is an ongoing responsibility of the member.

Up to 1,250 other hours in one or more designated services obtained within the five-year period may be claimed for recognition.

Recognition of hours acquired as part of the work for determining tax matters

The following hours spent as part of the work being done for determining a tax provision in the performance of an assurance or compilation engagement are most appropriately reported as “designated services” under “taxation services related to assessing the appropriateness of taxation provisions and related financial statements”:

making and documenting the judgement as to the treatment of tax issues; and
providing advice and/or researching tax case law etc. to assess the deductibility of an amount for accounting and tax purposes, i.e. for the calculation of future income taxes

The hours are not reportable as “public accounting services” hours.

Participating in a recognized capacity in providing public accounting services

“Participating in a recognized capacity in providing public accounting services” means the eligible hours must have been obtained while being a sole practitioner, partner or employee* of a CA public accounting practice (a sole proprietorship, firm or professional corporation) that is registered as a public accounting practice with the Institute pursuant to Bylaw 307. For licence renewal purposes, “practising office” includes the national or head office of a public accounting firm that has been accepted by the Canadian Public Accountability Board as a participating audit firm in its oversight program, whether or not the office has been the subject of a practice inspection. The eligible hours must have been obtained while participating in a recognized capacity, as follows:

having directly participated in a public accounting engagement, including any related subsidiary engagement, as a member of the engagement team; or
having responsibility for the entire public accounting engagement; or
having been in a position to directly influence the outcome of a public accounting engagement, such as providing:
direct supervision, management or other oversight of the leadership of the engagement team(s);
consultation regarding professional standards;
consultation or opinions regarding taxation provisions or other technical or industry-specific issues, transactions or events;
quality control reviews.

* Employee for this purpose includes full-time and part-time employment or providing services on a contract or per diem basis.

CPAB and Institute practice inspectors

For licence renewal purposes, “participating in a recognized capacity in providing public accounting services” also includes a practice inspector appointed by the Institute or by the Canadian Public Accountability Board to conduct practice inspections of licensees, firms and practising offices.

OTHER INFORMATION ON LICENSING AND RENEWAL OF LICENCES

Services for which a public accounting licence is required

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 which the prescribed Notice to Reader does not appear in the compiled financial statements or associated materials; and
the report is issued in Ontario or the work for the engagement is primarily performed in Ontario.

Services for which a public accounting is not required

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 taxation, accounting, internal audit, controllership, insolvency services, or business advisory services;
prepare compilations 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, provided that the compilations or associated materials are accompanied by the prescribed Notice to Reader;
prepare compilations in respect of which it cannot be reasonably expected that all or any portion of the compilation or associated materials will be relied upon or used by a third party.

Exclusions from the requirement to be licensed listed in the Public Accounting Act, 2004 for which a licence may be required under another act

The Public Accounting Act, 2004 excludes from the requirement to be licensed as a public accountant when providing public accounting services in respect of the following :

any public authority or any commission, committee or emanation of a public authority, including a Crown corporation;
any bank, loan or trust company;
any transportation company incorporated by an Act of the Parliament of Canada; or
any other publicly-owned or publicly-controlled public utility organization.

However, members are reminded that in some instances there are separate acts or regulations that specify licensing requirements for these entities (e.g. bank, loan or trust companies).

Compilation engagements: is a licence required?

Under the provisions of the Public Accounting Act, 2004, a public accounting licence is not required in order to perform compilations, provided that, when 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, the compilations or associated materials are accompanied by the prescribed Notice to Reader. A public accounting licence must be held if a compilation engagement is performed without the prescribed Notice to Reader appearing in the compilations or associated materials and 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.

MANDATORY CONTINUING PROFESSIONAL DEVELOPMENT REQUIREMENT

A licensee must fulfil the three-year mandatory Continuing Professional Development requirement consisting of a minimum of 20 hours annually of which at least 10 hours must be verifiable and 120 hours in the last three-year reporting period (for the years 2004 to 2006, inclusive), of which at least 60 hours must be verifiable, in an activity directly related to the competencies needed to provide public accounting services.

Verifiable continuing professional development means that the learning can be objectively verified by a competent source, and may include:

participation in courses, conferences and seminars;
organized employer-based in-house training sessions;
research or study projects in areas that expand the professional knowledge of the member and that result in presentations, reports or similar documentation;
research, including reading professional literature or journals for specific application in a professional role;
participation and work on technical committees;
published professional writing or academic work;
writing technical articles, papers or books;
teaching a course or a continuing professional development session in an area that is relevant to a professional role;
participation as a speaker in conferences, briefing sessions or discussion groups;
formal study such as leading to a degree or diploma;
pre-professional re-examination or formal testing;
self-study involving successful completion of an examination or leading to a designation.

Unverifiable continuing professional development means independent and informal learning activities and may include:

on-the-job training for new software, systems, procedures or techniques for application in a professional role;
self-study that does not involve an examination or other objective certification of completion, such as conference reference material or self-study CDs;
casual reading of professional journals or magazines that is not part of research for a specific application in a professional role.

PRACTICE INSPECTION REQUIREMENT

The practising office in or for which the licensee provided public accounting services has been the subject of a successful practice inspection within the three-year period immediately prior to November 1.

Exception for new practices: If the licensee is an employee, partner or sole proprietor of a newly established or soon-to-be established practising office that has not been the subject of a practice inspection, the licensee will be eligible to renew the licence on the condition that the firm or practising office is the subject of a practice inspection not later than 12 months following November 1, and the inspection results in a determination that the practice’s quality control system, current engagement files, and related financial statements adhere to professional standards contained within the CICA Handbook and other professional standards established by the Institute.