The following discussion is most relevant to public practitioners who perform audit and assurance services. As members of the International Federation of Accountants (“IFAC”) the provincial CPA regulatory bodies must demonstrate compliance with IFAC requirements. One of the more recent requirements is International Education Standard 8 (“IES 8”) Professional Competence for Engagement Partners Responsible for Audits of Financial Statements (Revised).
What is IES 8?
IES 8 requires that professional accountants serving as audit engagement partners develop and maintain the professional competence required of the role by achieving competence in a variety of areas which are outlined in the standard. One of the key ways in which individuals will need to demonstrate compliance with IES 8 is via the subject matter of the various courses they take to meet continuing professional development (“CPD”) requirements. For further information on IES 8 you can access the Final Pronouncement and Basis for Conclusions documents on the IFAC website.
What is the Canadian response to IES 8?
Clearline Consulting has been discussing the eventual Canadian implementation of IES 8 with our clients as well as the CPAs whom we meet when we facilitate professional development courses on behalf of CPABC, CPA Saskatchewan and CPA Manitoba. We regularly have participants comment that they are taking a course in December, that is unrelated to their practice, just to meet their annual or rolling three-year CPD requirements. Depending on the rules in your province taking generic verifiable CPD hours may not be sufficient to maintain your licence to practice public accounting. In anticipation of IES 8 we have been recommending to CPAs that are licensed for public practice to create a personal, or firm-wide, plan for what content should be covered each year as part of meeting the CPA requirements.
The various provincial CPA organizations are implementing compliance programs to meet IES 8 in different ways. For example, CPAs licensed for public practice in Quebec must complete a minimum number of structured continuing education hours related to audit and review engagements and other areas related to public accountancy (i.e. financial reporting). In Saskatchewan, CPAs that are licensed for the practice of professional accounting must complete a minimum number of “licence hours” which are specific to audits, reviews and financial reporting.
Here in British Columbia the details are still a little vague. Earlier this year CPABC announced that, beginning in 2019, practitioners seeking or renewing an audit license will be required to complete an annual self-assessment and declaration that they have undertaken sufficient relevant CPD to develop and maintain professional competence for their role. Based on their announcement it would appear that the requirements in BC will be limited to practitioners licensed for audits and will not apply to those whose license restricts their practice to reviews, compilations and/or tax services. This is interesting as the requirements in Saskatchewan and Quebec appear to be more broad and extent beyond auditors. Furthermore, it is unclear at this point whether CPABC will impose any minimum requirements on specific professional development content, as Saskatchewan and Quebec have, or whether the requirement will be limited to this annual self-assessment and declaration.
What should you do?
All Canadian CPAs licensed for public practice should familiarize themselves with IES 8 and the provincial requirements for each province that they are licensed for the practice of professional accounting. Second, if you haven’t already begun to do so you should create your own CPD plan to ensure that you will have access to the necessary content to meet these CPD requirements.
How Clearline Consulting can help?
We facilitate audit, assurance and accounting courses on behalf of CPABC, CPA Saskatchewan and CPA Manitoba. We also provide customized in-house professional development courses for CPA firms across western Canada. If you would like to discuss course content, organize an in-house course or get feedback on your personal or firm-wide CPD plan contact us.
