Staying Current: A CPA's Duty

From CPABC’s Professional Conduct Department

All CPAs have an ethical obligation to stay up to date with knowledge that pertains to their professional responsibilities. The COVID-19 pandemic has only brought this obligation into sharper focus, as every day seems to bring the announcement of a new government program or strategy that affects our economy and the way we do business.

Some members have asked us whether CPD requirements should be relaxed because of the pandemic. It’s understandable. However, times of uncertainty actually underscore the need to stay current, especially for those professionals who find themselves busier than usual. Professionals need to have the knowledge to deal with new challenges as they emerge. If we don’t keep current with economic events and regulatory standards, we risk damaging our reputation and our business relationships, losing client trust, and incurring legal liabilities and regulatory sanctions.

What gets CPAs into trouble

Rule 203 (Professional competence) of the CPABC Code of Professional Conduct (CPA Code) requires that every CPA¹ must:“… sustain professional competence by keeping informed of, and complying with, developments in professional standards in all functions in which the member provides professional services or is relied upon because of the member’s calling.”

Since 2016, CPABC’s Investigation Committee has handled eight matters where CPAs were determined to have breached Rule 203 by failing to stay current with professional standards. In each of these cases, the CPA was sanctioned for being offside. These cases involved:

• Law Society trust reports: There were four cases involving CPAs who completed accountant’s reports for clients without first taking care to update themselves on the Law Society’s detailed reporting requirements.
• Election campaign reports: In one case, an auditor was unaware of the extensive reporting requirements accountants must meet when they’re retained to audit election expenses.
• GAAP failures: In another case, an auditor issued an audit report on an entity’s financial statements, even though these statements contained material errors and were not in compliance with generally accepted accounting principles.
• Tax issues: In two cases, practitioners prepared clients’ income tax returns for jurisdictions outside BC without being aware of the unique requirements of the external jurisdictions’ respective tax laws.

In some of the above examples, the Investigation Committee also found that CPAs had breached Rule 201.1 (Maintenance of the good reputation of the profession), Rule 202.1 (Integrity and due care), and Bylaw 700 (Licensing).

CPAs can also get into trouble by biting off more than they can chew. Given the vast body of knowledge that exists in our profession today, no one CPA can provide expert advice on every facet of a business. Add to this the fact that accounting is a global profession with international standards, where change is a constant. Accordingly, members must be careful to limit their services to areas in which they’re certain they’ve maintained professional competence. This includes CPAs who act as advocates (for example, for a client or employer), as the guidance to the CPA Code emphasizes that CPAs must take particular care to ensure that they maintain professional competence in their areas of advocacy.

Members must also be careful to avoid “dabbling” in areas where they don’t have much experience. As described in the July/August 2016 issue of CPABC in Focus,² when CPAs are between jobs or in need of extra work, they may be tempted to offer services in areas where they lack sufficient knowledge and/or experience, or where they lack appropriate licensing. Members who dabble in this way place themselves at great risk of being offside Rule 203.

What helps CPAs stay current and relevant

Taking continuing professional development (CPD) courses is a great way to ensure that you stay current in your areas of focus and expertise. CPABC provides regular PD updates in areas such as assurance, taxation, and information technology, and its extensive offerings are easily accessible at pd.bccpa.ca. CPA Canada also offers numerous resources, including public company updates, commentary on economic and fiscal matters, and information on specialized areas such as corporate reporting and climate change. Visit the Career and Professional Development section of cpacanada.ca for details.

Note: Another reason to stay current with CPD is that CPABC will consider your PD and experience record if you apply for a public practice licence. You will not be given a practice licence if you don’t have the requisite PD and/or experience to ensure that you can provide professional services competently.

In addition to taking professional development courses, members can also maintain their professional competence by joining CPABC’s member forums and local chapters. CPABC co-ordinates member forums in diverse areas of the profession—from academia to mining to young professionals—and CPABC’s 16 regional chapters provide CPA members, candidates, and students across BC with local networking opportunities and professional development activities. To find the forum(s) most relevant to you or to access your local chapter, visit bccpa.ca and click the Member Services tab > Volunteer Resource Centre > CPA Volunteer Opportunities.

Do you need guidance?

CPABC has professional standards advisors who are here to help you understand the CPA Code. All discussions are confidential, non-binding, and unofficial. Contact the advisors by email at professionaladvisory@bccpa.ca.

In complex situations, you may also want to consider obtaining independent legal counsel. The Chartered Professional Accountants Act, CPABC Bylaws, CPABC Bylaw Regulations, and CPABC Code of Professional Conduct can be accessed online at bccpa.ca/regulatory/act-bylaws-rules.

Comments or questions about this article?

Contact the professional conduct department at professionalconduct@bccpa.ca.

Footnotes

1. Rule 203 of the CPA Code does not apply to candidates in CPA PEP or students taking CPA preparatory courses. However, candidates and students who don’t stay current may not succeed in their educational program or in their training.
2. See “Dabbling in Public Practice without a Licence: It Can Cost You,” CPABC in Focus, July/August 2016 (32-33).