Public Practice Policies

4.01 ENTRY INTO PUBLIC PRACTICE P POLICY

4.01 (1) REGISTRATION

All members intending to engage in the practice of public accounting are required to register with CGA Nova Scotia before starting in public practice and then to re-register annually.

4.01 (2) DEFINITION OF PUBLIC PRACTICE

For the purpose of the registration requirement, the practice of public accounting includes offering to perform or performing for a client one or more types of professional services involving the use of accounting or auditing skills (this includes any preparation of financial statements); one or more types of financial, accounting or tax management advisory or consulting services; and includes the preparation of corporate tax returns, personal tax returns, trust returns, charity tax returns and the furnishing of advice on tax matters for a fee or as a volunteer.

4.01 (3) TAX PREPARATION SERVICES

A member who is exclusively providing any tax preparation services for a fee must register with CGA Nova Scotia and purchase professional liability insurance.

A member who is solely providing personal income tax preparation services for a fee is subject to a limited registration process which requires only payment of a reduced registration fee, if applicable, and professional liability insurance. Limited registration is for T1 tax preparation only, (no balance sheet and annual fees under $2,000).

4.01 (4) VOLUNTEERS

All CGAs providing public accounting services as volunteers are subject to a limited registration process, but are not subject to a peer review.

4.01 (5) EXCLUSIONS

A member will not be considered to be engaged in public practice if the member is:

(a) employed in public practice by a public practice firm,

(b) solely providing bookkeeping services that do not extend to the preparation of financial statements,

(c) solely providing personal income tax preparation services without a fee,

(d) solely providing tax services as a Barrister or Solicitor.

4.01 (6) ENTRY REQUIREMENTS

To register in public practice the member is required to:

• Forward the completed Registration Form for New Public Practitioners (Form R-1) to the CGA Nova Scotia office.
• Purchase professional liability insurance. (Every public practitioner must have the basic minimum liability insurance coverage ($1,000,000) and evidence of such insurance must be filed with the Association when requested. A fine may be levied for failure to maintain professional liability insurance. Practitioners must submit an application for professional liability insurance with the insurance broker. There is a reduced insurance premium rate for part-time practitioners (fees $15,000 and under) and no fee for volunteers.)
• Acquire and maintain CGA Canada‘s Public Practice Manual and the CICA Handbooks
• Fulfill all Education requirements within twelve months of registration.²
  • Complete the two-day Orientation to Public Practice Seminar.
  • Complete the CICA Handbook GAAP and GAAS Review seminar in person.
  • Completion of the CGA Taxation 2 course assignments within the past 2 years or within twelve months of registration. Proof of successful completion of the course will be evidenced by submission of a transcript of assignment marks from CGA or other acceptable document.
  • Completion of the CGA Auditing 2 course assignments within the past 2 years or within twelve months of registration. Proof of completion of the course will be evidenced by submission of a transcript of assignment marks from CGA or other acceptable document.
• Have a minimum of two years experience at a senior level in a professional accounting firm (CGA, CA, CMA) as an employee (member or student) within the previous five years from the date of application. ³

Members who do not meet this experience requirement are required to engage a mentor, who has been approved by CGA Nova Scotia, to review the first ten audit or review files and the first five compilation files and related corporate tax work before the release of the said files. However, the practitioner‘s first three audit or review engagement files have to be mentored at any stage in the member‘s career.or review engagement files have to be mentored at any stage in the member‘s career.

4 .02 CONTINUANCE IN PUBLIC PRACTICE POLICY

Every member engaged in the practice of public accounting is required to register with CGA Nova Scotia annually January 1.

Any member who ceases to be engaged in public practice shall notify the CGA Nova Scotia Association Public Practice Committee in writing within sixty days of the discontinuation of the practice activities.

Every public practitioner is required to carry the basic minimum professional liability insurance coverage ($1,000,000) and provide proof of coverage if requested. There is a reduced insurance premium rate for part-time practitioners (fees $15,000 and under) and no fee for volunteers.

The CGA Association offers a group insurance program for professional liability errors and omissions insurance for members. Special reduced rates are available for part-time practitioners. The policy also covers defense costs, subject to the limit of liability (basic minimum $1,000,000 with a $3,000,000 aggregate which can be increased to $3,000,000 with a $6,000,000 aggregate per CGA, subject to the deductible for each loss). There is also an optional office insurance package through the Association‘s broker.

Every member engaged in the practice of public accounting shall have met, and continue to meet registered practitioner educational and practical experience standards established by the Board.

Every member engaged in the practice of public accounting offering reviewable services from an office in Nova Scotia shall be peer reviewed at least once every three years. Every new practitioner shall be peer reviewed within six to twelve months of initial registration or within six to twelve months after completion of the mentor program.

Every member engaged in the practice of public accounting is required to obtain and maintain up-to-date copies of both the CGA-Canada Public Practice manual and the CICA Handbook publications. This shall be monitored through the required practice inspection peer review process.

For practitioners moving permanently from one province to another province, The provincial CGA Associations, through the Affiliation Agreement, provide for the transfer of members and each agree to accept a member in good standing into the provincial CGA Association from an affiliated association. The Interprovincial Barrier Reduction paper for CGA practitioners approved by CGA Canada June 12, 1996 and by CGA Nova Scotia January 18, 1997, ensures that for mobility purposes, practitioners satisfying the entry requirements in one province should be satisfactory for all provinces.

Practitioners who provide services to clients residing in other provinces are required to register with the appropriate provincial affiliate association on their annual registration date. Two forms of registration apply to interprovincial activities:

1) Short Form Registration—Practitioners complete this form in every province where one or more of a practitioner‘s clients reside or have significant business operations.

2) Long Form Registration—Practitioners complete this form in every province where the practitioner/firm has a permanent office and/or holds themselves out as public practitioners in that province.

Practitioners are required to contact the provincial CGA Association offices, in the provinces in which they offer services, for the appropriate form.

4.03 MENTOR PROGRAM POLICY

Under the Public Practice Requirements, members offering professional accounting or related service to the public must meet relevant practical experience requirements. Members wishing to enter into public practice who do not meet the practical experience requirements must obtain the services under a mentor, in accordance with the Public Practice Mentor Program. A Mentor Referral List is available upon request from the CGA Nova Scotia Association office.

The mentor is to be engaged by the member and the member is responsible for selecting and negotiating the financial arrangement with the mentor independently from the Association.

The Member is required to engage a Mentor, who has been approved by CGA Nova Scotia.

The mentor agreement must be in place and the mentor must acknowledge his/her appointment as mentor to the Association in order to meet the mentor requirement in the member's application for public accounting or the existing members peer review process. (Refer to sample confirmation of appointment letter.)

The first ten audit or review files and the first five compilation files, and related corporate tax work are to be reviewed by the mentor. A member may apply to shorten the mentor engagement period if, under the recommendation of the mentor, the member successfully meets the requirements for audit or review or compilation engagements under the peer review program before the required ten (10) files have been completed.

If the first ten files do not include three audit or review engagement files, then the practitioner‘s first three audit or review engagement files and related tax work have to be mentored at any stage in the member‘s career. The mentor agrees to review the required financial statement files and related corporate tax work before the release of the said files. It is the responsibility of the member practitioner to ensure files are provided to the mentor in sufficient time to meet this timeline.

Members already in public practice who are encountering problems in their practice may also be required to engage a mentor.

A Mentor Review Checklist and Mentor Log Report of the files reviewed with a summary of findings is to maintained by the mentor and provided to the Association as part of the peer review process (Samples are available from the CGA Association). Mentors are also required to submit a copy of their Mentor Log Report to the Association annually at January 1. If no files have been reviewed since the last requested date a ―nil‖ report should be filed. Mentors may also be requested to provide copies of file checklists upon request, by the Association.

If the mentor is not satisfied with the progress of the new practitioner, the practitioner may be required to:

(a) Attend the CICA Handbook GAAP and GAAS Review seminar for a second time,

(b) Attend the Orientation to Public Practice in person Seminar for a second time,

(c) Take the CGA Auditing course including the Audit Practice Set (no exam required),

(d) Attend other related practice seminars/courses for file preparation and financial statement presentation.

(e) Extend the mentor program.

4.03 (1) MENTOR QUALIFICATIONS

The minimum qualifications for members to act as mentors under the program are:

1. Members have completed their public practice entry requirements;

2. Members are currently registered in public practice and meet all of the continuing requirements;

3. For Members to mentor a practitioner to perform audit engagements, the Members must conduct audit engagements in their practice, in addition to providing review and compilation services and related tax work; And

4. The CGA or CGA Firm must have had a minimum of one successful practice review; Or

5. The member is a CGA working in a CGA firm currently registered in public practice, that currently meets the above four conditions, at a senior (manager) level. (If the member is an employee, CGA Nova Scotia will need a satisfactory reference from the CGA employer, as well as permission in writing from the CGA employer for the employee to act as a mentor.)

4.04 (1) REGISTRATION

A member will be exempt from registering and not be considered to be engaged in public practice if the member is solely providing bookkeeping services that do not involve the preparation of financial statements, or if the member if solely providing casual T1 personal tax preparation services without a fee. However, a member providing bookkeeping services who wishes to obtain insurance from the CGA insurance AON Reed Stenhouse must contact the insurance broker for confirmation, register with the Association and submit an insurance application form to Aon Reed Stenhouse.

4.04 (2) ORIENTATION TO PUBLIC PRACTICE

Requests for exemption from attending the Orientation to Public Practice Seminar shall be assessed for those members who can provide proof of attendance within two years prior to date of application for registration.

4.04 (3) GAAP and GAAS Review

Requests for exemption from the CICA GAAP and GAAS Review In Person Seminar shall be assessed for those members who can provide proof of attendance within two years prior to the date of application for registration.

4.04 (4) CGA TAXATION 2 AND/OR CGA AUDITING 2

Requests for exemption form CGA Taxation 2 and/or Auditing 2 assignments shall be assessed by CGA Nova Scotia‘s Public Practice Committee and shall be supported by written confirmation from the member‘s employer describing his/her taxation and/or auditing experience of at least three years duration within the past five years.

Proof of completion of the Advanced Taxation and Advanced Auditing courses within two years prior to the date of application for registration will also be accepted for an exemption

4.04 (5) MENTOR PROGRAM

Requests for exemption from the Mentor Program shall be assessed and granted provided he member can provide written confirmation from his/her public practice employer that he/she was employed for a period of at least two years within the last five years. The employment shall have provided experience at a senior level in the preparation or supervision of compilation and review engagement files; personal and corporate tax planning, and preparation of personal and corporate tax returns.

4.05 (1) REGISTER

The public practice firm register, shall serve as a control record for reviews conducted. The register will include the following information:

1. firm name 

2. type of registration

 3. registration year 

4. entry year requirements completed 

5. number of audits, reviews and compilations conducted by the practice

 6. nature of activities and service codes 

7. preferred practice 

8. branch office/province

9. other provinces in which registered

10. type of firm: sole practitioner (S), partnership (P), corporation (C), professional corporation (PC), partnership involving professional corporations (PPC), limited liability partnerships (LLP) 

11. full time/part time/voluntary

 12. last review date 

13. type of review 

14. last review reviewer 

15. action 

16. insurance

Non-Resident Firms

In addition, a second registry will be maintained for non-resident firms registered as associate members with the Association. Non-resident firms comprise of CGA firms whose home province is not Nova Scotia, however, the firms have client activities within Nova Scotia‘s jurisdiction. Responsibility for conducting periodic practice reviews remain with the home province, with the home province affiliate advising of any deficiencies and/or disciplinary actions. If the non-resident firm maintains an office in Nova Scotia, then the CGA Nova Scotia Association reviews the Nova Scotia office.

4.05 (2) FREQUENCY OF REVIEWS

Practice peer reviews shall be conducted at the following intervals:

a) initial – 6 to 12 months/as soon as completed clients' files are available upon recommendation from the mentor

b) thereafter – every 3 years

c) special - as ordered by the committee or board

4.05 (3) SELECTION OF REVIEWS

The Public Practice Committee shall select practices for review taking into consideration the frequency requirements or any other special need, which may be identified from time to time.

4.05 (4) SELECTION OF REVIEWER(S)

From time to time and under such terms and conditions set by the Public Practice Committee, the Committee shall appoint a member or members in good standing with CGA-Canada to serve as public practice inspectors (―Peer Reviewer‖).

4.05 (5) ENGAGEMENT ARRANGEMENTS

The practice reviewer contacts the firm to be reviewed and sets up a mutually acceptable time and date. In accordance with the national and CGA Nova Scotia practice review program, when an extension or postponement of a review is made, the time for the next scheduled review is not also extended (ie. It should be based on the cycle date).

The reviewer then advises the office so that an engagement letter may be prepared. The reviewer takes the engagement letter to the firm at the time of the review for signature, leaving one copy for the firm, one copy for the reviewer and one copy for the review file.

4.05 (6) CONDUCT OF THE REVIEW

a) The reviewer will visit the practitioners at their place of business. The reviewer will select the files to be reviewed from a list of all files, supplied by the practitioner. Where distances make personal visits impractical/not cost effective, then the reviewer may request the selected files to be sent to him/her. Selected files may be sent to the reviewer by mail or other secure means. The reviewer will explain that they are not permitted to accept a client whose file has been reviewed as part of a Practice Review engagement, and that they are not permitted to disclose any information or documents without the practitioner's written consent except to the Practice Review Committee.

b) The reviewer will select client files for review on a random basis, but will only review those files that have been completed since the last review of that practice. As a minimum, one client file of each type of engagement (audit; review; non-review) will be reviewed. If there is no client file of any type of engagement, the reviewer is to indicate this on the information page (first page of the working papers). There is no maximum number of files that may be reviewed.

c) In the case of multiple partner offices, internal control shall be evaluated to determine the extent of file review necessary. Where common firm standards exist, practice reviews may be conducted on an office or firm basis, ensuring that the sample of files selected include some files of each partner. If common standards are not followed by the firm, then a review is conducted on each partner.

d) The reviewer will score each question of the review working papers using and the following criteria:

Score

o No - no evidence that the procedure was carried out

o Yes - evidence of full compliance with standards

o N/A - not applicable

o The reviewer will add comments as applicable.

e) The Public Practice Committee will tabulate the review results on the summary page.

The reviewer will send the completed review working papers together with the review submission form, under confidential label, to the attention of the Practice Committee at the CGA Association office.

The Public Practice Committee will review the results and the peer reviewer‘s comments, without disclosing the identity of the member being reviewed. The committee will tabulate the score and assess the score of each file reviewed to determine compliance with standards.

Each practice or branch office reviewed will be informed in writing of compliance/non-compliance with minimum standards and further requirements as necessary in the circumstances. Non-compliance with the requirements of practice, including current annual registration, current subscriptions to the Public Practice Manual, the CICA Handbook and maintenance of professional liability insurance may result in remedial action.

4.05 (8) NON-COMPLIANCE AND INADEQUATE REVIEW SCORES

If any member fails to comply with the requirements of the Public Practice Policies or demonstrates a persistent inability to pass a practice review, this represents a breach of the CGA Code of Ethical Principles and Rules of Conduct. The Public Practice Committee will report persistent breaches to the Discipline Committee.

The Public Practice Committee has powers to require remedial steps when necessary. Such remedial powers shall include, but are not limited to, follow-up reviews, assignment of a mentor and/or requirements for practitioners to attend instructional courses/seminars.

4.05 (9) A member may require that the committee reconsider its determination by notifying the chair within fifteen (15) days of notification of the determination.

4.05 (10)REVIEW COSTS

The member/firm is billed at the hourly rate for the peer reviewer plus disbursements and applicable taxes.

4.05 (11) SELECTION OF PUBLIC PRACTICE INSPECTORS (PEER REVIEWERS)

Peer Reviewers may be retained as independent contractors or employed for this purpose. In selecting persons to act as Peer Reviewers, the Public Practice Committee shall have regard to and take into consideration the following:

 experience conducting compilations and/or assurance engagements

 public accounting practice experience

 training received to act, or experience acting as, a peer reviewer

 professional and ethical conduct

 such other factors that the Committee, in its discretion, may deem appropriate

4.05 (12) PEER REVIEW FEE

The Public Practice Peer Review (Inspection) fees to practitioners is 100% of the peer reviewer‘s fee plus 100% of all disbursements for each peer review and follow-up review except for new practitioners 1st review during their first year of practice.

For new practitioner‘s, there is no charge for their 1st review during the 1st year in practice.