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Frequently Asked Questions
Find answers to common questions about the Public Accounting Licence
What is CPA Ontario's role in issuing licences?
CPA Ontario has been granted authorization by the Public Accountants Council (“PAC”) to license members who have fulfilled the requirements established by the Public Accounting Act, 2004 and the PAC Standards. Accordingly, we are the licensing body responsible for regulating CPA Ontario licensees, for granting and renewing licences as well as for suspending and revoking licences.
When is a Public Accounting Licence required?
When is a PAL required to be held by a member?
A PAL is required when you are engaging in the practice of public accounting and you are the lead engagement person responsible for signing the report or statement issued related to:
- any assurance engagement (including an audit or review engagement), or
- any compilation engagement where services may be relied upon or used by a third party and the prescribed wording for the Notice to Reader is not used; and
- the report is issued in Ontario or the work for the engagement is primarily performed in Ontario.
A PAL is not required if you:
- are not the lead engagement person responsible for signing the report or statement. Members of the engagement team who are not the lead engagement person, including the quality control review partner, are not required to be licensed;
- do not provide any assurance services (including audit or review engagements) but do provide other services including: compilations in which the services may be relied upon or used by a third party and the prescribed wording for the Notice to Reader is used, taxation, accounting, internal audit, controllership, insolvency services, or business advisory services.
I provide accounting, taxation or compilation services but do not do any assurance engagements. Do I need to be licensed?
A public accounting licence is not required if you do not provide any assurance engagements (including auditing or review engagements) and restrict your practice to providing accounting, taxation or compilations in respect of which it can reasonably be expected that the services will be relied upon or used by a third party and the prescribed notice to reader is used.
Please be reminded that pursuant to Regulation 4-6, Section 9, a firm engaged in the practice of public accounting, providing accounting services to the public or carrying on a related business or practice must be registered and be in good standing with CPA Ontario. Furthermore, a firm must maintain professional liability insurance coverage and provide CPA Ontario with satisfactory proof of such insurance on an annual basis. In addition, the practitioner is subject to payment of the Annual Practitioner Fee. Practitioners who provide compilation engagements with the prescribed notice to reader are also subject to practice inspection by CPA Ontario, even though a public accounting licence is not required. See Bylaw 1.1.31 for the definition of “providing accounting services to the public”.
What individuals within a professional corporation need to be licensed in order to provide public accounting services?
If the professional corporation is established for the purposes of providing public accounting services, at minimum one shareholder is required to hold an active licence.
A professional corporation is required to hold an active certificate of authorization if that corporation intends to practise public accounting. To apply for a certification of authorization, Form 4-6D must be completed.
Within a professional corporation structure, the lead engagement persons on public accounting engagements performed are required to be licensed.
If a professional corporation is a partner of a firm, the shareholders of the professional corporation would not be required to maintain a PAL in their capacity as shareholders. However, if the professional corporation is responsible for an assurance engagement and the engagement opinion, statement or report is signed by the professional corporation, then the professional corporation has taken the role of the lead engagement person. In that case, a shareholder of the professional corporation would need to individually hold a PAL.
For further details, please refer to the Professional Corporation FAQs.
What individuals within a firm need to be licensed in order to provide public accounting services?
Guideline No. 2007-2 enacted by the Public Accountants Council under the provisions of the Public Accounting Act, 2004 and Regulation 9-1, section 15 of the Member's Handbook require that only the lead engagement partner responsible for signing a statement or report for a public accounting engagement must be licensed as a public accountant. Other members of the engagement team, including the quality control reviewer or other experts may be, but are not required to be, licensed as public accountants in Ontario.
Is the engagement quality control review partner required to be licensed by CPA Ontario as a public accountant?
The engagement quality control reviewer is not required to be licensed as a public accountant in Ontario by CPA Ontario.
Applying for a new Public Accounting Licence
How do I apply for a Public Accounting Licence (PAL)?
- complete Form 9-1A and pay the non-refundable application fee (plus HST)
- satisfy the Public Accounting Licensing Board of good character;
- complete the Continuing Professional Development Requirement;
- complete the Practice Inspection Requirement; and
- complete either the Professional Experience Requirement or the Current Competency Requirement;
- complete the Qualifying Experience Requirement if admitted to membership after October 31, 2006; and
- fulfill the qualifications to be licensed as set out in the Public Accounting Act, 2004, the regulations and PAC Standards made under that Act and in the bylaws or regulations of CPA Ontario.
Who can apply for a new PAL?
A member in good standing of CPA Ontario who has met the eligibility requirements and who has never held a PAL, or who has previously held a PAL that has lapsed or expired, is eligible to apply for a new PAL.
I am a CPA, CGA or a CPA, CMA. Can I apply for a PAL?
Any member in good standing of CPA Ontario who has never held a PAL will be able to apply for one once they have met the educational, study, practical experience, examination and other requirements. Discussions are ongoing between CPA Ontario and the PAC about new pathways to becoming eligible for licensure in cases where approved legacy pathways are no longer available. Members will be provided with an update once more information is available.
Where can I find the application form to apply for a new public accounting licence?
Please complete Form 9-1A Public Accounting Licence – New Application Package.
Are there any other CPA Ontario fees associated with having a PAL?
The Annual Practitioner Fee (APF) applies to each practitioner within a firm that is engaged in the practice of public accounting or in providing accounting services to the public. The practitioner fee must be paid for each member residing or practising in Ontario who is a proprietor, partner, shareholder or employee of the firm; or provides public accounting or accounting services for or on behalf of the firm on any basis, or otherwise receives any income, excluding pension or retirement investment income, from the firm.
Am I able to submit the same CPD information I submitted for my annual CPD declaration?
Only CPD taken in activities directly related to the competencies necessary to provide public accounting services are able to be submitted for consideration for meeting the CPD requirement for licensure. If CPD obtained for purposes of meeting your membership obligation is not in activities directly related to the competencies necessary to provide public accounting services, you will be required to obtain additional CPD in order to meet your CPD obligation for licensure.
My practice is newly registered but has not been inspected, can I still practice?
Yes. Please indicate on your PAL application that your practice is new and has not yet been inspected. You are eligible to be granted a licence if you have satisfied the PALB that you have successfully completed all other requirements to obtain a PAL and on the condition that the firm or practice receives a successful practice inspection within 12 months following the date of firm registration.
What is the reporting period for the Professional Experience Requirement for a new PAL application?
The reporting period for the Professional Experience Requirement (submitted in Form 9-1A Schedule A – New PAL Experience Certification Report) is for the past five years immediately proceeding the date of application and may include calendar years. Please be reminded that you are required to track and keep record of hours charged to clients.
What can I do if I do not meet the PAL requirements as outlined in section 2 of Regulation 9-1?
The PALB has been given the authority to grant and deny applications for PALs, however, the PALB cannot issue a licence unless all requirements are met under section 2. There are limited circumstances in which the PALB has the ability to excerise discretion. Please refer to Section 6 of Regulation 9-1 and Form 9-1A Section D4. Professional Experience Requirement – Special Consideration for further details.
What is the Practising Public Accounting Declaration?
This Declaration is satisfied by registering a firm and/or professional corporation with CPA Ontario or being employed on the roster of a firm/professional corporation registered with CPA Ontario and providing public accounting services as a member of the engagement team or as the member of the firm who is responsible for the engagements (the lead engagement partner).
Renewing my Public Accounting Licence
I currently hold an active PAL. Am I eligible to renew it?
Your licence must be renewed annually. An application to renew your licence must be filed not later than 30 days prior to the date of the expiry of your active licence. Failure to renew will result in the expiry of your existing PAL. The PAL reporting period runs from November 1 to October 31 of the following year.
In order to be eligible to apply to renew your PAL, you must be a member in good standing of CPA Ontario, hold an active PAL, and have successfully completed the following:
- the application for licence renewal and paying the non-refundable renewal application fee (plus HST)
- Practising Public Accounting Declaration
- the Continuing Professional Development Requirement
- the Practice Inspection Requirement
- the Professional Experience Requirement.
I am a managing partner, which limits the time spent on assurance engagements. Am I eligible to renew my licence?
The PALB may be able to exercise discretion when deciding on applications to renew a PAL if the member has met all other requirements and is only deficient with regard to meeting the Professional Experience Requirement. To have the PALB consider your renewal application under discretion, you must submit a separate memorandum detailing your specific situation. It is advised that you familiarize yourself with section 6 and section 7 of Regulation 9-1.
Please be reminded that a licensed member who is renewing his or her licence may be able to, as part of fulfilling the Professional Experience Requirement, obtain a portion or all of the Professional Experience Requirement through “documented hours”. Documented hours are hours acquired in a public accounting practice through the provision of public accounting services described in clauses 1.10.1, 1.10.2 or 1.10.4 of Regulation 9-1 and which have not been charged to clients.
Professional Experience Requirement FAQs
Does time spent preparing tax returns, on corporate tax returns or on GST / HST qualify as "eligible hours"?No. Only hours in "taxation services related to assessing the appropriateness of taxation provisions and related financial reporting," as defined in Regulation 9-1 (1.5.1), are considered eligible hours that can be claimed as part of the required Professional Experience Requirement of obtaining a minimum of 2,500 hours. More specifically, hours obtained in "taxation services related to assessing the appropriateness of taxation provisions and related financial reporting" are eligible to count towards obtaining the 1,250 hours in designated services.
Does time spent providing tax consulting, tax planning, expert tax advice, etc. qualify as "eligible hours"?No. Only hours in "taxation services related to assessing the appropriateness of taxation provisions and related financial reporting" as defined in Regulation 9-1(1.5.1) are considered eligible hours that can be claimed as part of the required Professional Experience Requirement.
When can a practitioner reasonably expect third parties to rely on or use compilation or associated materials?
Third party reliance is a matter of professional judgment. Practitioners should discuss with their clients whether third parties could be reasonably expected to use or rely upon any portion of the compilation or associated materials, and document this discussion. Questions to consider in this discussion may include:
- Is there any external financing that does or could require reliance on financial statements?
- Do suppliers ask for financial statements as part of the negotiation for credit terms?
- Are there prospects regarding the sale of the business that could result in reliance upon these materials?
A tax return electronically filed with CRA (not considered a third party) with a Notice to Reader embedded in the software will likely not qualify unless a third party also receives this filing.
Can I claim the hours I spend preparing compilations for specific users when renewing my licence?No. Compilation services only qualify under public accounting services in Part A of the Professional Experience Requirement if it can reasonably be expected that all or any portion of the compilations or associated materials prepared by the person providing the services will be relied upon or used by a third party. If the financial information is only being prepared for a specific user such as CRA, it is not considered to be a third party.
Do I have to log the hours I spend engaging with a client if I am charging them a fixed amount?In order to ensure consistency and reliability of the hours reported to CPA Ontario, members who provide services for which the clients are charged on a value billing (or fixed amount) basis must track and report the actual hours they spend on such engagements.
Do quality control services (engagement file quality reviews and monitoring services) qualify as assurance services?For quality control services to qualify as assurance services for the purpose of meeting the public accounting licensing Professional Experience Requirement such services must have been provided in a recognized capacity with a public accounting practice. Note, however, that a public accounting licence is not required in order to provide these services.
Can a firm be licensed?In Ontario, firms are not licensed. If a member wishes to practise public accounting or provide accounting services to the public through a firm, that firm must be registered with CPA Ontario. A member who is engaged in the practice of public accounting is required to hold a public accounting licence. Under the firm structure, the firm is able to practise public accounting, as long as the lead engagement partner holds an active PAL.
Why was I billed the Annual Practitioner Fee when I let my licence lapse?If you are a member, residing or practising in Ontario, as a sole proprietor, partner, shareholder or employee of a firm that is engaged in the practice of public accounting or in providing accounting services to the public, you are required to pay an annual practitioner fee.
If you are a member who provides public accounting or accounting services for or on behalf of the firm on any basis, or otherwise receives any income, excluding pension or retirement investment income, from the firm, including through the engagement by or employment with a related business or practice you are required to pay an annual practitioner fee.
What does a professional corporation need to obtain in order to practise public accounting in Ontario?A professional corporation must first be registered with CPA Ontario and obtain a valid certificate of registration before it may carry on any business or practice in Ontario. A professional corporation is also required to obtain a certificate of authorization in order to practise public accounting. The articles of incorporation must specify that the practice of public accounting is one of the objectives.
In order for a certificate of authorization to be issued or renewed, there must be at least one shareholder of the professional corporation that holds an active PAL.
Can I apply for a certificate of authorization for my professional corporation?If you have a PAL and you have a currently registered professional corporation and you intend to practise public accounting through the professional corporation, you can apply for a certificate of authorization.
FAQs from Non-Members
I am licenced in another province. What do I need to do to obtain my licence in Ontario?
Anyone who files an application to be licensed in Ontario on the basis of their entitlement to practise public accounting in another province or territory must provide satisfactory proof of ALL of the following:
- that you are a current member, in good standing with the CPA provincial accounting body or other authorized licensing body in Canada
- that you hold, or are part of a firm that holds, a licence, certificate or other form of authorization to practise public accounting in the province/territory of the CPA provincial accounting body or other authorized licensing body in Canada with which you hold membership
- that said licence, certificate or other form of authorization is free of limitations, restrictions or condition, is not under suspension or the subject of revocation and is not the subject of a complaint, investigation, disciplinary proceeding, disciplinary finding, order or settlement in respect of a disciplinary matter.
This information must be confirmed directly from your CPA Provincial Accounting Body or Other Authorized Licensing Body in Canada and can be provided by submitting Schedule B of Form 9-1A.
Firm Registration Requirement
Before a public accounting licence can be granted and if you intend to provide public accounting services in Ontario with a firm that is located outside of Ontario, the firm is required to be registered as a public accounting practice with CPA Ontario and must therefore remit the firm registration form.
Mandatory disclosure requirement for licensed public accountants
Licensees and firms must meet the disclosure requirements for reports issued to clients for whom they are providing any accounting or assurance services in Ontario. For more information, please refer to the disclosure requirements.
I am located outside of Ontario offering services to clients in Ontario. Do I need to be licensed in Ontario?
Yes, the lead engagement partner is required to hold an active licence in Ontario if they are providing assurance services for an Ontario entity and the statement or report is issued in Ontario or the work or procedures for the engagement is or are primarily performed in Ontario.
In circumstances where the lead engagement partner needs to be licensed in Ontario, he or she must first become a member in Ontario.