The question of when to report—or self-report—the conduct of a CPA or candidate to CPABC remains one of the most common questions we receive. Accordingly, we’ve prepared this refresher article1 to remind registrants2 of the appropriate actions that should be taken when dealing with various ethical issues.
Reporting the conduct of others
Rule 211 of the CPABC Code of Professional Conduct (CPA Code) requires you to report “any information concerning an apparent breach of the CPA Code or any information raising doubt as to the competence, integrity or capacity to practise of another registrant.” You must report the facts as you know them to CPABC, along with any relevant supporting documentation.3 You are not required to investigate or determine whether the registrant has indeed violated the CPA Code.
While this might sound straightforward, we recognize that some ethical dilemmas are complex and nuanced, which can make it challenging for registrants to determine their next steps. Scenario #1 offers a case in point.
Scenario #1 – Employment non-disclosure agreements
Suppose you enter into an employment contract that includes an obligation to keep all matters confidential. You later discover that another CPA at your organization appears to have acted dishonestly in a financial transaction, which causes you to question their integrity.
Under the CPA Code, the exceptions related to privilege or confidentiality (discussed later in this article) do not include contractual non-disclosure agreements, such as those found in many employment contracts. In this situation—even if you have entered into an employment agreement that mandates confidentiality—you are still required to report any suspected breaches of the CPA Code by registrants to CPABC, regardless of the agreement’s terms.
This situation may create an ethical dilemma, as your employer might expect you to keep information confidential. Therefore, we advise that you thoroughly review the terms of any employment agreement—and discuss any potential issues with your prospective employer—before signing.
Similarly, in client situations, you should inform your client that your duty to protect the public and the profession takes precedence over their right to confidentiality, and that, while you will notify them before reporting information to CPABC, you will report the information even if they refuse their consent. We recommend that you consider seeking legal advice in such situations.
Self-reporting
The obligation to report your own conduct arises from both the CPA Code and the CPABC Bylaws. The key reporting requirements are outlined in two main rules of the CPA Code—Rule 101 (Compliance with governing legislation, bylaws, regulations and the Code) and Rule 102 (Matters to be reported to CPABC)—and in the CPABC Bylaws.4 These are discussed in more detail below.
The fundamental principle
The preamble to the CPA Code stipulates that registrants should always conduct themselves “in a manner which will maintain the good reputation of the profession and serve the public interest. In doing so, registrants are expected to avoid any action that would discredit the profession.”5 The preamble also states: “Registrants have a fundamental responsibility to act in the public interest. The public’s trust and reliance on sound and fair financial and management reporting and competent advice on business affairs—and the economic importance of that reporting and advice—impose these special obligations on the profession.”6
Recognizing that it is difficult to make a rule that covers every circumstance, the guidance to Rule 101 emphasizes that when a breach is such that it “diminishes the reputation of the profession or fails to serve the public interest, registrants are also required to notify CPABC of the breach.”
If you identify that you have breached the CPA Code, you must:
- As soon as possible, take whatever action might be appropriate to satisfactorily address the consequences of the breach; and
- Evaluate whether the breach should be reported to CPABC. If so, you must report it promptly.7
Specific matters relevant to registrants
Criminal matters
You are required to self-report all criminal convictions,8 including guilty pleas, to CPABC, regardless of the nature of the offence or its location. This requirement applies even if you receive an absolute or conditional discharge from the court. You do not need to self-report that you have been charged with a criminal offence.
Securities offences
You must self-report all convictions for securities offences, whether by a court or by a securities commission administrative tribunal, as well as any settlement agreements with securities regulators.9 You do not need to self-report any charges or allegations against you, or any administrative matters such as cease trade orders or late filing penalties.
Tax offences
You must self-report if you are found guilty of violating any tax legislation that involves dishonesty on your part, or if you enter into a settlement with tax authorities in this regard.10 You are not required to self-report any administrative matters such as penalties for late filing or tax reassessments.
Money laundering
You must self-report if you are convicted of violating Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act.11
Other laws
There are, of course, many other legal findings that could affect the public’s confidence in the profession and that you should self-report.12 These include:
- Convictions under customs or immigration laws;
- Convictions regarding controlled substances;
- Involvement in the improper financial operations of a corporation;
- Misconduct in insolvency matters; and
- Any other legal finding related to financial or ethical misconduct.
Bankruptcy and insolvency13
You must self-report to CPABC when:
- You begin an insolvency proceeding, such as a consumer proposal to creditors; or
- You become bankrupt, including when you make an assignment in bankruptcy or when a bankruptcy order is made against you under the Bankruptcy and Insolvency Act.
Matters with other regulators
Conduct that violates the standards of another regulatory body may harm the reputation of the CPA profession. Therefore, if you are found guilty of a failure to comply with the requirements of another regulatory body, such as another Canadian CPA organization, you must inform CPABC.14 Note: This rule also applies to regulatory bodies outside the practice of accounting, such as bodies that regulate competition, elections, gaming, human rights, environmental protection, anti-money laundering, and health and occupational safety.15
In addition, you are required to report any settlement agreement reached with another regulatory body and notify CPABC if you voluntarily deregister or resign from another professional body’s membership to resolve a disciplinary matter.
Scenario #2 – Trouble with an accounting oversight body
If your firm is inspected by an accounting oversight body, such as the Canadian Public Accountability Board, you would need to self-report any matter that is subsequently published in a file inspection or enforcement action.16 Non-published file inspections do not need to be self-reported.
Civil disputes and other negative events
Other negative events may still need to be reported to CPABC, even if these events are not specifically listed in the CPA Code or the CPABC Bylaws. Once again, the determining factor is whether an event would diminish the reputation of the profession or signify a failure to serve the public interest.
While your mere involvement in a legal dispute is unlikely to meet this test, it is possible that the ultimate resolution of the dispute may diminish the reputation of the profession. In such cases, you would need to self-report, as scenario #3 illustrates.
Scenario #3 – Criticism by a judge
Most civil case pleadings are in the public domain, and most court proceedings are open to the public. Civil cases, especially pleadings filed by an opposing party, may include unsupported allegations that are not subsequently proven during legal proceedings. Therefore, the mere filing of a negative statement of claim against you is unlikely to require self-reporting to CPABC. However, if the judge in a civil case criticizes your competence, honesty, or integrity in their judgment, you would need to self-report this to CPABC.
Exceptions to reporting
Rule 211 outlines exceptions to reporting to CPABC if:
- Reporting would cause the loss of solicitor-client privilege;
- The matter has already been reported to CPABC;
- You have a statutory duty of confidentiality, such as under the Income Tax Act, the Securities Act, or the Financial Institutions Act; and
- You are involved in litigation support engagements of a civil or criminal nature. In such cases, you do not need to report to CPABC until:
- Your client or employer consents to release the information;
- You learn that third parties (excluding legal advisors) are aware of the information; or
- It is clear that the information will not become known to third parties, other than legal advisors.
Trivial matters and minor perceived faults
Although Rule 211 requires you to report or self-report all apparent breaches of the CPA Code, some personal mistakes are trivial matters that do not breach the CPA Code and, therefore, do not warrant further investigation. Rule 211 and its accompanying guidance clarify that registrants are not required to report trivial matters or minor perceived faults. Ultimately, when deciding whether to report to CPABC, you should do so when you believe the matter raises concerns about the “competence, integrity or capacity to practise”17 of the registrant(s) involved.
How to report to CPABC
If you need to report or self-report an event or breach of the CPA Code or CPABC Bylaws to CPABC, email your disclosure to the attention of the Registrar c/o Professional Conduct. We will confirm receipt of your report and contact you for further details.
What to do when you’re not sure
We appreciate that some situations are not straightforward. The following CPABC resources are designed to provide clarity:
- The guidance in the CPA Code describes how the rules should be applied; and
- CPABC’s professional standards advisors are here to help. You can consult them for confidential guidance to ensure that you stay compliant with the CPA Code and the CPABC Bylaws when navigating difficult situations. Contact our advisors by email.
This article was originally published in the March/April 2025 issue of CPABC in Focus.
Footnotes
1 Past articles on conduct include: “Your Duty to Report Conduct to CPABC – Including Your Own,” CPABC In Focus, March/April 2017 (32-35) and “Your Duty to Report Conduct Matters and Other Events to CPABC,” CPABC In Focus, Nov/Dec 2022 (28-30).
2 This article is intended for CPAs and candidates in the CPA Professional Education Program—collectively referred to as “registrants.” Registrants do not include students taking CPA preparatory courses.
3 Guidance to Rule 211.
4 Bylaw 511 (Obligation to Report) outlines some of the matters that members must report to CPABC. Bylaw 408 (Obligation to Report) describes some of the matters that CPA candidates must report to CPABC.
5 CPABC Code of Professional Conduct (CPA Code).
6 Ibid.
7 Rule 101.2 of the CPA Code.
8 Rule 102.1(a) of the CPA Code.
9 Rule 102.1(b) of the CPA Code.
10 Rule 102.1(c) of the CPA Code.
11 Guidance to Rule 102, section 2.
12 See further discussion in the Guidance to Rule 102.
13 Bylaw 511 (Obligation to Report) for CPABC members; Bylaw 408 (Obligation to Report) for CPA candidates.
14 Rule 102.2, 102.3, 102.4.
15 Guidance to Rule 102, paragraph 7.
16 Depending on the circumstances of the matter, this would need to be reported by the firm, not an individual.
17 Rule 211 of the Code.
