Complaints of unprofessional conduct are frequently made regarding registered professional accounting firms that do not comply with some basic requirements of a firm pursuant to the CPA Alberta Rules of Professional Conduct. These include responding promptly to requests from successor accountants and providing clients with their documents and information when they transition to a new accountant. CPA Alberta’s Conduct and Discipline department regularly receives inquiries from members of the public or the profession seeking assistance in obtaining responses when a member or firm fails to reply to emails and phone calls.
Unfortunately, the intersection of members operating professional accounting firms (predominantly sole practitioners) with the Complaints Inquiry Process occurs with increasing frequency due to issues of incapacity[1], such as competence or mental health issues, retirement, or death.
A well-managed practice should include an emergency assistance or transition plan in case a member is unexpectedly unable to provide professional services safely and competently. Sharing this plan with CPA Alberta can help prevent unexpected and undesirable proceedings under the Complaints Inquiry Process.
CPA Alberta voluntarily offers guidance on its website regarding the establishment of a Practitioners Emergency Assistance Plan (PEAP) and encourages practitioners to share it with CPA Alberta to “allow [CPA Alberta] to assist in the administration of [the] firm during the emergency transition period”.
Below are some examples of situations that may have been avoided with a PEAP in place.
- During the pandemic, a sole practitioner who experienced physical and mental health issues, in addition to complications related to the pandemic, was the subject of two separate complaints from clients unable to receive responses to their communications or access their historical accounting records. The matter was ultimately resolved through Sanction Agreements, which included multiple findings of unprofessional conduct against the sole practitioner and their firm.
- A registrant whose mental and physical health was in serious decline did not inform CPA Alberta of the circumstances and faced several complaints from clients regarding their failure to respond and manage taxation matters on a timely basis. This resulted in a Sanction Agreement with numerous findings of unprofessional conduct against the member and their firm followed by a subsequent Disciplinary Hearing, during which the sole practitioner’s health issues were partially revealed, leading to five findings of unprofessional conduct against the member.
- In two recent cases, sole practitioners with significant physical and mental health challenges required family members to attempt to respond to requests for information from clients, successor accountants, and eventually CPA Alberta, after the members were deemed incapacitated. In both instances, the family members were ill-equipped to assist and understandably distressed by the emerging situations, leaving some requests for information unaddressed.
- A registrant who passed away unexpectedly had all their files stored on a computer that no one else could access. The executors and CPA Alberta eventually retrieved the records and appointed an interim practitioner, but this process placed undue stress on the surviving spouse during an already challenging time.
Registrants are urged to establish an emergency assistance or transition plan. Doing so will not only help prevent complaints but will also:
- Facilitate CPA Alberta’s assistance: An emergency assistance or transition plan makes it easier for CPA Alberta to provide support during an emergency transition period and align with the intent of the practitioner.
- Better meet client service needs: Practitioners have dedicated their careers to cultivating relationships with clients and supporting them in their businesses. It seems incongruous to risk leaving clients without a plan for their future accounting services and business needs.
- Ensure timely access to information: Without organized file structures, software user identifications, and passwords, accessing prior work can be difficult or impossible. This can lead to delays, rework, and an increased potential for errors.
- Avoid penalties and additional costs on required filings: Even as a practice winds down, there are reporting responsibilities including GST returns, income tax returns, and CPA Alberta regulatory requirements.
- Enhance the value of the practice: Monetizing the client list may represent a significant asset for the estate, but this value can be compromised in an emergency if potential purchasers or service providers are not identified.
If you have any questions about creating a PEAP or wish to discuss the benefits, please contact advisory@cpaalberta.ca.
[1] CPA Alberta functional definition of incapacity: “suffering from a physical, mental or emotional condition or disorder or an addiction to alcohol or a drug as defined in the Pharmacy and Drug Act or other chemicals that impairs the ability of a registrant to provide professional services in a safe and competent manner”.
