Proper licensing means proper
insurance
CPABC takes the issue of unlicensed practice
very seriously—both because of its mandate
to protect the public and because of its mandate
to support and educate members. When an
unlicensed, unauthorized member provides
public accounting or other regulated services,
there is significant exposure to the public.
One of the most important public protections
is professional liability insurance coverage,
which is a requirement of proper licensing.
This has a significant bearing if you make a
mistake in your work and are sued for negligence—without insurance, any court awards
against you will have to be borne out of your
own pocket. Court awards can be financially
ruinous for CPAs who don’t have insurance
coverage.
Considering retirement? Your
exposure to claims doesn’t retire
with you
Many CPAs transition into retirement gradually. During that transition process, those who
continue to practice public accounting—operating part-time practices, for example—must
remain licensed.
Insurance is another important factor for
those retiring from public practice (or leaving
public practice to work in another field).
Even if you decide to retire from public practice now, your exposure to civil liabilities will
usually last for several more years. Retiring
from or leaving public practice doesn’t mean
you’re off the hook when it comes to any
claims that may be made against you for prior
work. That’s why CPABC Bylaw Regulation
1301/1 requires that you maintain adequate
coverage for a minimum of six years after
leaving public practice.
The consequences of unlicensed
public practice
Penalties assessed on CPAs vary depending on
the specific circumstances of each case. In three
recent cases, penalties included fines ranging
from $1,000 to $5,000, plus CPABC’s investigation costs (these often exceed the fines).
There’s also the possibility of suspension and expulsion. One particularly serious case has resulted
in a member being suspended for one year, during which they must not use their CPA designation
in any manner.
Think you might be offside?
The good news is that CPABC has professional standards advisers who are here to help. You can
call them for confidential advice to ensure that you stay onside of our licensing requirements,
and for advice on setting up a practice, including how to obtain liability insurance. Stella
Leung, CPA, CA, can be reached at 604-488-2609, and Brigitte Ilk, CPA, CGA, can be reached
at 604-629-8363. Both can also be reached using our toll-free number at 1-800-663-2677.
You can also get detailed information about the licensing process from our website at
bccpa.ca, under Members>Public Practice>CPABC Public Practice Licensing or by calling
Karen Fiorini, CPA, CGA, CPABC’s director of public practice licensing, at 604-730-6231.
In addition, CPA Canada provides valuable resources and advice in its “Practitioner’s Toolkit,”
which is available for download at castore.ca/updates/practool. This toolkit is designed not
only for CPAs who are currently in public practice, but also for those who are contemplating
starting out in this area, as it details what’s involved in setting up a small practice.
Comments or questions about this article?
Contact us at [email protected].
604.708.4200
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CPABC in Focus • July/August 2016 33