Investigation Committee Determinations and Recommendations

The Member

• prepared and filed for a client Canadian income tax returns for 2 consecutive tax years which attributed self-employment income to the incorrect provincial jurisdiction. 
• failed to advise the client of the necessity to file Quebec income tax returns for certain years related to the client’s self-employment income.  

As a result, the client incurred penalties and interest on amounts owing to Quebec.  The Member’s billings to the client regarding the resolution of the client’s tax liabilities to Quebec were not reasonable as a result of the errors.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

• 201.1 - Maintenance of the good reputation of the profession
• 202.1 - Integrity and due care
• 203 - Professional competence
• 205 - False or misleading documents and oral representations
• 214 - Fee quotations and billings

The Committee recommended the Member:

1. Accept a reprimand;
2. Pay a fine of $1000;
3. Pay expenses of $3,813; and
4. attend a professional development course on income taxation relevant to practitioners, which is acceptable to the Director, Professional Conduct.

An employee of the Firm accessed a former client’s private tax information with the Canada Revenue Agency online account. The employee provided this information to the former client’s estranged spouse (a current client of the Firm).  The Firm represents that it was unaware that the spouses were estranged and that the breach of confidentiality of the former client was unintended.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

• 201.1 - Maintenance of the good reputation of the profession
• 208 - Confidentiality of information

The Committee recommended the Firm:

1. Accept a reprimand; and
2. Pay expenses of $1,525.

The Member reported Continuing Professional Development during a particular year. After CPABC attempted to verify the time claimed, the Member admitted that while they had registered for the courses, they did not attend them.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

• 201.1 - Maintenance of the good reputation of the profession
• 203 - Professional competence
• 205 - False or misleading documents and oral representations

The Committee took into account unique personal circumstances which affected the Member. The Committee recommended the Member:

1. Accept a reprimand; and
2. Pay expenses of $1100.

The Member is a self-employed insurance broker who also prepared personal tax returns for friends and associates.  The Member did not hold a public practice licensure from CPABC.  The Member did not ensure that a related website and a distributed pamphlet contained the appropriate descriptive style of their accounting designation.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

• 101.1 - Compliance with governing legislation, bylaws, regulations and the Code
• 201.1 - Maintenance of the good reputation of the profession
• 202.1 - Integrity and due care
• 205 - False or misleading documents and oral representations
• 402.1 - Use of descriptive style
• Bylaw 700 - Public Practice by CPA Members
• 506(1) & (9) - Legacy designations

The Committee recommended the Member:

1. Accept a reprimand; and
2. Pay expenses of $2,227.

The Member

• signed Notice to Reader reports on behalf of clients,
• prepared an application for the Scientific Research and Experimental Development Tax Incentive Program on behalf of a client. The Member charged a contingent fee for the work without agreement on the basis for the fee in writing with the client; and
• prepared corporate tax returns on behalf of several clients.

At the time of this conduct, the Member did not hold current public practice licensure from CPABC. The Member represents that they were unaware of the relevant requirements of the Code and Bylaws.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

• 101.1 - Compliance with governing legislation, bylaws, regulations and the Code
• 201.1 - Maintenance of the good reputation of the profession
• 202.1 - Integrity and due care
• 205 - False or misleading documents and oral representations
• 215.1&2 - Contingent fees
• Bylaw 700 - Public Practice by CPA Members

The Committee recommended the Member:

1. Accept a reprimand; and
2. Pay expenses of $1687.

The CPA Candidate was convicted of an offence under section 271 of the Criminal Code of Canada (sexual assault).  As a result, the Candidate received a conditional discharge and was placed on probation for two years. If the Candidate satisfactorily completes their probation, the Candidate will receive an absolute discharge by the Court.  Their guilty plea will not be recorded as a conviction under the Criminal Code and the Candidate would not have a criminal record. 

The Investigation Committee determined the Candidate contravened the CPABC Code of Professional Conduct as follows,

• 102.1 - Matters to be reported to CPABC
• 201.1 - Maintenance of the good reputation of the profession
• 213 - Unlawful activity

The Committee recommended the Candidate:

1. Accept a reprimand;
2. Take a relevant course that is satisfactory to the Director, Professional Conduct; and
3. At the conclusion of probation, provide the Director, Professional Conduct with written confirmation that they complied with the conditions of the probation order.

While employed, the Member maintained a copy of a previous employer’s budgetary financial information on their current employer’s laptop computer. The current employer was able to access this confidential information.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

• 201.1 - Maintenance of the good reputation of the profession
• 208.3(a) - Confidentiality of information

The Committee recommended the Member:

1. Accept a reprimand; and
2. Pay expenses of $2,350.

The Member:

1. Failed to provide professional services to a client in a timely way or at all;
2. Failed to assist the client in its transition to a new accountant, and withheld documents belonging to the client; and
3. Was unprofessional when communicating with the client and the successor accountant.

During the investigation by CPABC, it became apparent that the Member:

1. issued a report for the client without doing sufficient work and could not produce working papers; and
2. did not ensure the sign on their office door complied with CPABC bylaws, as it still referred to their legacy designation only.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

• 201.1 - Maintenance of the good reputation of the profession
• 202.1 - Integrity and due care
• 203 - Professional competence
• 205 - False or misleading documents and oral representations
• 206.1 - Compliance with professional standards
• 218 - Retention of documents and working papers
• 303.1&.2 - Co-operation with successor

Bylaws:

• 506(1) and 506(9) - Legacy designations 

The Committee recommended the Member:

1. Accept a reprimand;
2. Pay a fine of $1,500; and
3. Pay expenses of $4,206.

The Member and the Firm (the Respondents) were engaged by a client to perform accounting and taxation services. In connection with making payroll withholding remittances and statutory filings, the Respondents possessed blank cheques signed by the client.  When the Respondents’ engagement ended with the client, the Member used one of the client’s blank cheques to pay outstanding billing without the client’s consent.

The Investigation Committee determined the Respondents contravened the CPABC Code of Professional Conduct as follows,

• 201.1 - Maintenance of the good reputation of the profession
• 202.1 -Due care
• 206 -Compliance with professional standards
• 207- Unauthorized benefits

The Committee recommended the Respondents:

1. Accept a reprimand; and
2. Pay partial expenses of $1,200

The Member:

1. filed with the Law Society of British Columbia a client’s Trust Report.  The Member asserted to the Law Society that they were licensed by CPABC to perform the engagement.  However, at the time the report was filed, the Member was not licensed to perform that type of service.
2. filed a questionnaire with CPABC’s Public Practice department that failed to disclose the unauthorized engagement.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct and the Bylaws as follows,

201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
205 - False or misleading documents and oral representations
Bylaw 700 - Public practice by CPA members 

The Committee recommended the Member:

1. Accept a reprimand;
2. Pay expenses of $800.

The Member filed with the Law Society of British Columbia a client’s Trust Report.  They asserted to the Law Society that they were licensed by CPABC to perform the engagement.  However, at the time the report was filed, the Member was not licensed to perform that type of service.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct and the Bylaws as follows,

Rule 205 – False or misleading documents and oral representations; and
Bylaw 700(2) – Public practice by CPA members

The Committee recommended the Member:

1. Accept a reprimand;
2. Pay partial expenses of $500; and
3. Provide evidence to the Director, Professional Conduct, that the Member’s Juricert certification is cancelled.

The Member was the engagement partner for the audit of a client.  The Member:

1. Signed an unqualified audit report on the client’s financial statements that included subsidiaries that had not been audited. The financial statements for the subject year were therefore false and misleading;
2. Did not document or perform sufficient work on the valuation of material investments in the subject period; and
3. Did not retain sufficient documentation to reasonably evidence the nature and extent of the audit work and testing done, including sufficient evidence of communication with those charged with client governance and internal controls.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

201.1 - Maintenance of the good reputation of the profession
202.1 - Objectivity
203 - Professional competence
205 - False or misleading documents and oral representations
206.1 - Compliance with professional standards 

The Committee recommended the Member:

1. Accept a reprimand;
2. Pay partial expenses of $5000; and
3. Attend and successfully complete the CPABC course, Quality Management – Overview of CSQM 1 and 2 for Providers of Assurance Services (New Standards).

The Member issued a T5 information return (Statement of Investment Income) to the ex-spouse of a divorcing client regarding a loan (the “Loan”) the ex-spouse had made to a company controlled by the Respondent’s client (the “Individual”).  The Member did not sufficiently advise their client concerning the accounting and tax treatment of accrued interest on the Loan, including drawing the client’s attention to required statutory filing deadlines.  The Member did not appropriately agree to their role and responsibilities and scope of work with the client through an engagement letter.            

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

201.1 - Maintenance of the good reputation of the profession
202.1 - Due care

The Committee recommended the Member:

1. accept a reprimand,
2. pay expenses of $2,807; and
3. attend and successfully complete the CPABC course Income Tax – Everyday Issues for General Practitioners

The Member copied verbatim, in all material respects, the website of another Chartered Professional Accountant.  When doing so, the Member

1. Misrepresented the attributes of their public practice;
2. Advertised on their website a practice name that was not authorized by CPABC; and
3. Adopted a website domain name that implied the same unapproved practice name.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

201.- Maintenance of the good reputation of the profession
202. - Integrity and due care
205. - False or misleading documents and oral representations
217.1 - Advertising
401 - Practice names

The Committee recommended the Member:

1. accept a reprimand;
2. pay a fine of $2,000; and
3. pay expenses of $1,485.

A falsified letter was presented to a potential lender in support of a mortgage application for which the Member was one of the proposed mortgagees. During the investigation, the Member represented that they played no part in the letter’s preparation, and states that their spouse handled all aspects of the mortgage application. When the Member became aware of the existence of the falsified letter, they failed to take sufficient action to correct the false information in it.

The Investigation Committee determined the Member contravened Rule 201.1 (Maintenance of the good reputation of the profession) of the CPABC Code of Professional Conduct.

The Committee recommended the Member:

1. accepts a reprimand; and
2. pays partial expenses of $2,500.

The Member was retained by a client to complete Canadian and US tax returns. The Member did not complete the returns on a timely basis and did not adequately communicate with the client. The client also understood that the estimated fee would be in Canadian dollars, while the Member rendered a bill in US dollars at a significantly higher amount.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

201.1 Maintenance of the good reputation of the profession
202.1 Integrity and due care
214(b) Fee quotations and billings

The Committee recommended the Member:

1. accept a reprimand;
2. pay a fine of $1,500;
3. pay expenses of $2,565; and
4. attend and successfully complete by the next available date the CPABC course Communicating effectively under pressure.

The Member was employed by a non-profit organization to be an accountant, and subsequently became Director of Finance; a senior financial role with the organization. The Member misled the employer concerning the status of work and failed to perform critical financial functions, such as reconciling the organization’s bank account, preparing financial statements, and filing tax returns and other information on a timely basis.  This resulted in financial penalties to the organization and caused a significant delay in the preparation of the annual audit.  The Member’s employment was terminated by the organization.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
205(b) - False or misleading documents and oral representations
206.1 - Compliance with professional standards

The Committee recommended the Member:

1. accept a reprimand;
2. pay a fine of $1,500;
3. pay costs of $2,592 plus GST; and
4. attend and successfully complete by the CPABC courses:
   a. Controllership Operational Skills Program; and
   b. PD Nexus – Public Practice Insights.

The Member was the accountant for a businessperson and their elderly father. The Member had access to some of their bank accounts and made transactions in them, without ensuring that such an arrangement was properly documented. When the businessperson made a complaint to CPABC concerning an amount of money the Member had received, the Member initially refused to return the funds unless the complainant withdrew the complaint to CPABC.  Subsequently the Member returned the funds to the complainant.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

105 - Hindrance, inappropriate influence and intimidation
201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
203 - Professional competence
212.1 - Handling of trust funds and other property

The Committee recommended the Member accept a reprimand.  In making this recommendation, the Committee took into account evidence presented concerning the personal health situation of the Member.

During the course of a separate investigation, it was discovered that the Member:

1. Issued compilation financial statements when not licensed to do so;
2. Did not use the services of a mentor which was a term of the practice license,
3. Operated a sole proprietorship using a firm name contrary to written direction from CPABC staff; and
4. Did not accurately reflect the proprietorship’s status and age on the firm website.

The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,

101.1 - Compliance with governing legislation, bylaws, regulations and the Code
104.1 - Requirement to co-operate
202.1 - Integrity and due care
203 - Professional competence
205 - False or misleading documents and oral representations
206 - Compliance with professional standards
217.1 - Advertising
401 - Practice names

Bylaw:

700 - Public Practice by CPA Members             

The Committee recommended the Member:

1. Accept a reprimand;
2. Pay expenses of $3,000 plus GST;
3. Pay a fine of $2,000;
4. Agree to not perform compilation engagements for one year from the date of this Determination and Recommendation, during which time their public practice licence would be “Other Regulated Services”.  After one year, the Respondent may apply to the Public Practice Committee for a different category of public practice licence; and
5. Attend and successfully completes by September 30, 2021 the CPABC Professional Development live webinar Compilation Engagements – Application of the New CSRS 4200.

The Member was engaged by an individual to amend their personal tax return with the Canada Revenue Agency.  The Member did not reply to numerous messages from the individual sent over a period of several months.

The Investigation Committee determined the Respondent contravened CPABC Code of Professional Conduct Rule 201.1 (Maintenance of the good reputation of the profession).

The Committee recommended the Member accept a reprimand.  In making this recommendation, the Committee took into account that the Member refunded the individual the professional fees that were charged by the Member.

The Member was engaged to complete a client’s Canadian and US personal tax returns. 

The Member did not:

• Document important terms of the engagement in an engagement letter with the client; including advising the client that another accountant would be sub-contracted to prepare the US tax returns;
• Prepare and complete the returns on a timely basis; and
• Respond to communications from the client promptly.

The Investigation Committee determined the Respondent contravened the CPABC Code of Professional Conduct as follows:

201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
205 - False or misleading documents and oral representations
206.1 - Compliance with professional standards
214 - Fee quotations and billings

The Committee recommended the Member:

1. Accept a reprimand;
2. Pay costs of $1,825 plus GST; and
3. Attend and successfully complete the CPABC course PD Nexus: Public Practice Insights.

The Member completed personal Canadian tax returns for a client. The client made over-contributions to their Registered Retirement Savings Plan and needed to take action and make filings (T1-OVP) with the Canada Revenue Agency (CRA) to correct the over-contributions. The Member:

a) Initially failed to file the T1-OVP, resulting in taxes, penalties and interest being charged to the client;
b) Later filed the T1-OVP which CRA did not receive. The Member did not keep a copy of the T1-OVP which was filed;
c) Failed to advise the client to rectify the over-contributions and the potential tax consequences for not doing so; and
d) Failed to return repeated client communications.

The Investigation Committee determined the Respondent contravened the CPABC Code of Professional Conduct as follows:

201. - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
205 - False or misleading documents and oral representations
218 - Retention of documentation and working papers

The Committee recommended the Member:

1. Accept a reprimand; and
2. Pay expenses of $3,051 plus GST.

The Member provided free accounting and business management services to a family member and a close family friend (the “clients”). The Member did not approach the engagement with sufficient formality and did not ensure that the clients agreed to all the transactions which occurred.

The Investigation Committee determined the Respondent contravened the CPABC Code of Professional Conduct as follows:

201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care

The Committee recommended that the Member accept a reprimand.

The Member shared an office space with a non-CPA who provided bookkeeping services (the “bookkeeper”).  The Member also performed management functions for the bookkeeper which caused some of the bookkeeper’s clients to be unaware of the distinction between the Member’s services as a CPA and the bookkeeper’s services.  The bookkeeper was also providing legal services to clients in apparent contravention of the Legal Profession Act.

The Investigation Committee determined the Respondents contravened the CPABC Code of Professional Conduct as follows:

201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
213 - Unlawful activity
406.1 & 2 - Responsibility for a non-registrant
408.1 - Association with non-registrant in public practice

The Committee recommended the Respondent:

1. Accept a reprimand;
2. Pay a fine of $2500; and
3. Pay expenses of $2659 plus GST.

The Firm and the member (the “Respondents”):

1. Performed assurance services but failed to use the services of a mentor as they were required to do;
2. Issued assurance reports which contained material errors; and
3. Were not truthful and provided inaccurate responses to CPABC during the course of a public practice review and this investigation.

The Committee determined that the Respondents contravened the Rules of the CPABC Code of Professional Conduct as follows:

101.1 - Compliance with governing legislation, bylaws, regulations and the Code
104.1 - Requirement to co-operate
201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
203 - Professional competence
205 - False or misleading documents and oral representations
206.1 - Compliance with professional standards

The Committee recommended that the Respondents:

1. Accept a reprimand;
2. Pay expenses of $7,438 plus GST of $371.90;
3. Attend and successfully complete by September 30, 2021 the CPABC Professional Development live webinars or in-person:
   1. Compilation Engagements – Application of the New CSRS 4200; and
   2. Ethics at Our Core; and
4. Accept the publication of a notice on CPABC’s website or otherwise which identifies the Respondents by name.

A firm issued audit reports on the financial statements of a private mutual fund.  A material investment of the fund was impaired, but the carrying value of investment was not written-down in the financial statements to the fair value as required by generally accepted accounting principles.  The Firm’s audit work to assess the fair value of the investment was insufficient and was not in accordance with generally accepted auditing standards. The firm’s working papers were inadequate and improperly dated.

The Investigation Committee determined that the Firm contravened the CPABC Code of Professional Conduct as follows:

201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
205 - False or misleading documents and oral representations
206.1 - Compliance with professional standards
218 - Retention of documentation and working papers

The Committee recommended that:

1. The Firm accept a reprimand;
2. The Member agrees that their practice licence be permanently cancelled;
3. The Member agrees to not re-apply for a practice licence; and
4. The Firm pay costs of $2,025.