As an Alberta CPA, you may not realize what services can only be provided through either a registered Professional Accounting Firm (PAF) or a registered Professional Services Provider (PSP). Understanding which services Alberta CPAs are required to perform through a PAF or by a PSP is important as it ensures regulatory compliance and protection of the public.
Alberta CPAs must adhere to all of the requirements of the Chartered Professional Accountants Act (CPA Act) and the related governing documents, including the CPA Rules of Professional Conduct.
Professional Accounting Firms (PAFs)
The CPA Act is clear that the provision of the following services to the public by a CPA Alberta registrant can only be provided through a registered PAF:
- an assurance engagement;
- a compilation engagement;
- a specified auditing procedures engagement;
- accounting services;
- forensic accounting, financial investigation or financial litigation support services;
- advice about or interpretation of taxation matters;
- preparation of a tax return or other statutory information filing, if the return or filing is prepared in conjunction with any service referred to in points (i) to (vi) noted above.
Professional Service Providers (PSPs)
If you are a CPA member who is providing or offering to provide only the following services, you must do so through a PSP unless you are providing these services through a registered PAF:
- acting as a trustee in bankruptcy, a liquidator, a receiver, a receiver-manager or acting in any other aspect of insolvency practice; or
- public practice as a business valuator.
Any CPA Alberta member must register a PSP if they provide any of the following services on behalf of a corporation whose primary business is not accounting (for example: a bank, a trust company, a financial planning firm or a wealth management firm):
- accounting services;
- forensic accounting, financial investigation or financial litigation support services;
- advice about or interpretation of taxation matters;
- preparation of a tax return or other statutory information filing, if the return or filing is prepared in conjunction with any service referred to in subclauses (i) to (iii).
Understanding of the scope of work is more straightforward for some of the services listed above than others. For instance, both the “accounting services” and “advice about or interpretation of taxation matters” are commonly misunderstood. The below is meant to clarify these terms.
“Accounting services” is defined in the CPA Act as:
summarization, analysis, advice or counsel about or interpretation of accounting matters, but does not include (i) bookkeeping, or (ii) any accounting service that is performed incidentally by a provider whose primary occupation is not accounting.
CPA Alberta defines bookkeeping as managing a bank account, without additional journal entries for the period. It is the posting and management of accounts payable and receivable and expenditures and sales transactions, with no production of financial statements and no accruals are done. Bookkeeping is printing statements from an accounting software system, but not a full and complete set of financial statements. For example, no cash flow statement and no statement of retained earnings is completed.
This shows that the “bookkeeping” services that can be done by a registrant of CPA Alberta outside of a PAF or a PSP is quite limited.
Moving to taxation, “advice about or interpretation of taxation matters” requires either PAF or PSP registration. This means that a CPA Alberta member can only offer simple, straight forward personal tax returns (with no accounting services, additional financial statements, financial information, or advice provided) to the public without being registered. It is expected that these returns would only include T4s and/or a few T5s. As soon as any advice is provided (such as inquiries on their eligibility to claim certain deductions), this goes beyond the allowable scope of work.
Fractional controllership is becoming more common within the profession. As a general rule, CPA members are permitted to hold one or two contracts in which they provide Controller/CFO type of services at any one time. So long as you maintain this number of contracts in place at any one time and you don’t offer your services to the public (for example, creating a website or advertisement that offers your services), you would be permitted to provide these services. Should you at any point have three contracts in place or start advertising your services, you would be deemed to be offside with the CPA Act and the CPA Rules of Professional Conduct unless these services are offered through a registered PAF.
CPA Alberta developed a decision tree that may be useful in identifying which services that Alberta CPAs may be performing require registration. The PAF Frequently Asked Questions and the PSP Frequently Asked Questions documents are also helpful in understanding the specifics of the rules. More information regarding public practice registration information can be found on our website.
It is important that services provided to the public by Alberta CPAs are performed through a properly registered PAF or PSP so that the public is protected. PAFs and PSPs are required to have appropriate insurance and be monitored by the profession via Practice Review. If are considering providing services to the public (or currently are providing services), review the resources linked above or contact PAF@cpaalberta.ca for additional guidance.
